freshbooks on computer with man working

FreshBooks vs. QuickBooks vs. Xero [A Review of Which Is the Best]

There’s nothing like the freedom of running your own business. But delivering a product or service is only part of the job. Proper financial administration and bookkeeping can make or break your business.

So how do you keep track of your financial records? Do you know who to bill and can you track your profits?

The right accounting software can do all of this and more. Keep reading to find out the hits and misses with some of the most popular accounting software for freelancers.

Get Started with Freshbooks

FreshBooks Review

FreshBooks gives you a fresh look at complicated accounting software. Valued for its simplistic interface, FreshBooks has everything a small business needs to organize those pesky financial details.

Features

Why would you choose FreshBooks over any other accounting software? The helpful features can be a life- and time-saver for anyone who doesn’t have an entire department to take care of such things. Check out some of FreshBooks’ convenient features.

Personalization and Customization

You may not have thought about personalization and customization when it comes to accounting software. But FreshBooks offers a fresh and simple look to financial software. And it’s easy to adjust settings to make it work best for your individual needs.

  • Customizable Thank You emails
  • Automated reminders with adjustable settings
  • Log receipts by uploading images to cloud
  • Simple tax-friendly expense categories
  • 2 Customizable templates with easy-fill fields

Invoicing and Billing

Billing and invoicing is the mainstay of the self-employed. And this may be why you’re looking at software options. FreshBooks makes it easy to take care of financial details without needing an accountant to see to this essential part of business.

invoice example in freshbooks

  • Online credit card payment processing
  • Instant updates for invoices that are viewed and paid
  • Automatic updates on expenditures
  • Add billable expenses and mark up client’s invoice automatically
  • Convert estimates to invoices with a click
  • Transparent money deposits with no hidden fees
  • Deposit requests
  • Payment scheduling
  • Use Stripe to accept international currencies
  • Accept MasterCard, Visa, AMEX, and Apple Pay
  • Processing fees imported as expenses automatically

Project Management

Do you have multiple projects going at once? FreshBooks makes it simple to track billable time, expenses, and due dates. Keep on top of project details and export billable information directly into a client’s invoice.

freshbooks on multiple devices

  • Track spending on individual projects
  • Assign recurring expenses
  • Track billable start and stop times with a click
  • View work productivity with billable hour summaries
  • Use popular apps like Asana, Trello, Basecamp, and Teamwork to track time
  • Add detailed notes to time entries
  • Weekly and monthly summary views of trackable time
  • Manage and track time for specific projects
  • Assign project due dates
  • Manage deliverables and projects

Optional Client Project Interface

Client interaction can make you stand out in the crowd. And as a freelancer, you may work closely with your clients to collaborate on projects.

Why use a separate program to get client input? Instead, try the optional invitation feature on FreshBooks. Inviting clients into your virtual workroom keeps them in the loop, and makes communication more efficient.

  • Send invites to clients, employees, and contractors for easy collaboration
  • Receive instant feedback from invited clients
  • Chat with clients in real time
  • Optional instant approval for project details from clients

Pricing

FreshBooks Cloud Accounting is free to try for 30 days. And you don’t need to give your credit card info to give it a spin.

If you find this software is perfect for you? Sign up for one of the 3 plans:

Lite

The Lite plan is a good option if you only have a handful of clients at a time. It’s only $15 a month and includes the following perks:

  • 5 clients
  • Time and expense tracking
  • Unlimited estimates and invoices
  • Accept online payments
  • Import expenses from your bank account automatically

Plus

If you have a medium-sized client base, then the Plus plan may be the one for you. At only $25 a month it features the same perks as Lite with these extra features:

  • 50 clients
  • Late fee charge capabilities for overdue invoices
  • Payment reminders sent automatically
  • Reports: General Ledger, Chart of Accounts, Trial Balance
  • Proposals
  • Recurring invoices

Premium

Are you a freelancing powerhouse? Then you may like the Premium plan from FreshBooks. It offers the same perks as both the Lite and Plus plans, but you also receive support for up to 500 clients. At $50 a month, this FreshBooks plan gives you everything you need to grow your business.

Add-Ons

Do you need to give your employees access to FreshBooks? For an extra $10 per person per month, you can do that. Add on more team members as you need them to track projects, time, and expenses.

FreshBooks Select

Do you make more than 150K a year or have more than 500 clients? You may need FreshBooks Select instead. This plan’s features may be perfect for your growing business, including a dedicated account manager, advanced accounting integrations, lower transaction fee rates, and payment fee reports. Though if you have more than 500 clients it might make sense to look at Quickbooks.

Get started with Quickbooks

QuickBooks Review

If you’re looking into accounting software, it’s hard to get away from Intuit’s QuickBooks. It’s a mainstay on the market and has been for years. But is it the right one for you?

Features

What do you need from your accounting software? QuickBooks has been an industry leader for years. Check out the features that they’re famous for and see if it’s a good fit for your business:

  • Connect to your credit cards, PayPal, bank, Square, and other accounts
  • Automatic transactions import
  • Automatic calculations, transactions and data organization
  • Keep records in accordance with FASB (Financial Accounting Standards Board) for tax time
  • Access and automate reports and financial statements
  • Summaries for profitable customers, delinquent invoices, spending habits, and cost savings
  • Online bill pay for clients
  • Track and schedule automatic bill pay
  • Snap and upload photos of business receipts
  • 24/7 chat support

quickbooks on ipad

Pricing

Interested in trying QuickBooks for yourself? They offer a 30-day free trial, but after that, you can choose from one of 3 plans for small businesses. Or one special-priced plan for anyone self-employed.

Self-Employed

For $10 a month, freelancers can have access to some of QuickBooks’ signature features like:

  • Mileage tracking
  • Income & expense tracking
  • Receipt uploads and organization
  • Quarterly tax estimates
  • Invoice & accept payments
  • Basic reports

However, this plan is exclusively for sole proprietors who file Schedule C. If you have any other type of business, you may need to check out the other plans. Also, you can’t upgrade from a Self-Employed plan to a Small Business plan.

Small Business Plan Options

According to QuickBooks, you qualify for one of their small business plan options if you are one of the following:

  • Sole proprietor
  • LLC
  • Partnership
  • Non-profit
  • Corporation

All small business plans are upgradable. But you can’t go from Self-Employed to a Small Business Plan.

quickbooks on laptop

Simple Start

This basic plan gives you all the basic accounting features you may need to organize your financial records. For $20 a month, you receive the following QuickBooks perks:

  • Organize and upload receipts
  • Sales and sales tax tracking
  • Income & expense tracking
  • Basic reports
  • Sending estimates
  • Tax deduction maximizations

Essentials

If you need just a little more from your accounting software, the next level is the Essentials plan. This plan is $35 a month and includes everything from the Simple Start plan. It adds bill management and track time capabilities.

And if you have a business that may require multiple users? You can have up to 3 users per account.

Plus

For a small business with a lot of accounting demands, the Plus plan may be the only way to go. At $60 a month, you receive the same basic features as the Simple Start and Essentials plans with a few key differences.

quickbooks on ipad

The Plus plan allows you to run advanced reports instead of just basic ones. You can also allow access for up to 5 users. Additional features for this premium plan include inventory and project tracking and 1099 contractor management.

Add-Ons

If you only need access to a special feature or two, you can also buy add-ons to your existing plan. Potential add-ons include:

  • Enhanced Payroll $39 + $2 per employee/month
  • Full Service Payroll $99 + $2 per employee/month

Get Started with Xero

Xero Review

As you research accounting software, you may come across Xero. Their mission is to supply simple software for small business needs. And they supply all the features that your small business may need for day-to-day operations.

xero on macbook

Features

  • Online payment options
  • Track inventory and manage stock
  • Payroll operations: paychecks, pay stubs, reports
  • Connect to your bank for easy transactions
  • Daily updates and easy bank reconciliation
  • Convenient customizable Xero dashboard
  • Pay bills
  • Record and manage receipts and expenses
  • Track projects
  • Professional quotes
  • Financial reports and budgets
  • Online payment services like Stripe and PayPal
  • Purchase orders
  • Supports multi-currencies
  • Sales tax computation
  • Manage fixed assets
  • 24/7 online support

Pricing

Does Xero offer exactly what you need for your business? If you think they do, you can try their free trial. You don’t need a credit card to sign up. And you have unlimited user access for the first 30 days.

If you think that Xero is exactly what you need to manage your financial details, you may want to check out the following available plans. Xero last increased their pricing in  November of 2018.

xero on tablet

Early

Do you need a simple software to handle a handful of transactions a month? This plan may be a good option. For $9 a month, receive the following Xero features:

  • 5 bill entries
  • 5 invoices and quotes
  • 20 bank transaction reconciliations

Growing

If you’re growing your business, however, you may want to invest in the Growing plan instead. This plan features unlimited invoicing and quotes, bill entry, and bank transactions for $30 a month.

Established

For those of you who have advanced financial needs, the Established plan may be the way to go. For $60 a month, you receive pro features like expenses and projects and multi-currency capabilities.

Payroll Service Add-On

Need an efficient way to process your payroll? Xero offers a full-service payroll upgrade and add-on to take care of it. This service is available across all 50 states in the US. It starts at $39 per month with an added $6 per person per month.

The Comparisons

You may be tempted to go with the first financial software you come across. But how does one stack up against the other? Check out these quick comparisons.

FreshBooks vs. QuickBooks

Winner FreshBooks. Not all accounting software packages are created equal. And there are some glaring differences between FreshBooks and QuickBooks that may be deal-breakers for either one.

One of the major differences is the price plans. QuickBooks offers their price plans based on the number of users who may need access to the software. On the other hand, FreshBooks uses your client base number to determine the best plan for you.

Another difference is the ease of set-up, or the lack thereof. FreshBooks set-up is simple and the interface is very beginner user-friendly. But QuickBooks requires a lot of calibration to get it to where it needs to be. The learning curve may be a bit steep for some users.

Next, invoicing for FreshBooks is simple and streamlined. It is relatively straightforward, but it doesn’t have as many options as QuickBooks. Quickbooks is built for small businesses.

In addition, FreshBooks makes it very easy to pay expenses. Simply fill in the required fields and you’re done. QuickBooks operates in a similar way when logging expenses. But they also need a linked bank account for paying these expenses. FreshBooks doesn’t require this.

What about tax time? Which is easier? That depends on how you file your taxes. As you may imagine, you can link QuickBooks with Intuit’s tax software Turbo Tax. Or you can give access to your accountant with FreshBooks.

FreshBooks vs. Xero

FreshBooks and Xero have a lot of similarities. It may be difficult for a self-employed person to tell which is right for them. They are both strong options for freelancers and small teams. There are a couple of obvious differences, though, that may make this decision easier.

First, it’s the pricing. To receive the bulk of Xero’s signature features you may have to purchase mid-level or premium plans. However, the pricing is based on the number of people under your employ.

So, what happens to the freelancer who simply wants to make professional invoices? Well, you can pay for upgraded plans on Xero to have access to more features even if you don’t have employees. Or you can opt to go with FreshBooks.

FreshBooks bases its plans on the number of clients you intend to invoice, not the number of employees you may or may not have. So, FreshBooks is very price-friendly to freelancers and the self-employed who don’t plan on growing their business to include numerous employees.

Next, setting up Xero is a bit more complicated than setting up FreshBooks. Because of the numerous customizing and importing options, you may not get up and go as quickly. But if you plan on importing a lot of data to the new accounting program, Xero lets you do this with ease.

In addition, invoicing for both FreshBooks and Xero is simple. But you get more customization options for Xero. Maybe too many options. FreshBooks offers two simple and professional templates to choose from. And they are color-coded for easy data input.

Finally, when it comes to tax time, Xero may make it a little easier to file because it already has Avalara integrated. But if you use an outside accountant, this option may be useless.

Xero is a better platform if you do not have clients and run a physical business like a restaurant or farm.

QuickBooks vs. Xero

Both QuickBooks and Xero excel at helping small businesses keep track of financial details. And their pricing works similarly, too. But if you are a freelancer, neither plan may make financial sense because they are based on the number of users or people under your employ. If you have neither, you may be paying more for perks you don’t need.

In addition, both the set-ups for QuickBooks and Xero take a bit of time. And there is a little learning curve to either one because they are both very customizable. Though they have set-up wizards to help beginners, it may still be a little too much to get up and running as soon as possible.

Furthermore, as mentioned before, both QuickBooks and Xero offer similar capabilities when logging expenses, filing taxes, and invoicing. But both of them are geared towards small business with employees. And if you are self-employed, you may find these extra perks unnecessary.

Final Thoughts

Get Started with Freshbooks

If you are a freelancer or self-employed, the clear winner is FreshBooks. It’s feature-light and user-friendly design make it appealing for those who simply want a basic accounting software. With FreshBooks, you pay for what you actually need based on how many clients you have instead of paying more for employees you don’t actually have.

In addition, the client chatting and sharing capabilities make FreshBooks an appealing and personable software solution for freelancers who depend on relationships with their clients. With a fee, you can also allow your clients to pay with credit cards through FreshBooks’ online payment processing.

Lastly, Xero and QuickBooks also have their own appeal. But unless you are a small business with plans for immediate growth, it may not make fiscal sense to invest in either. FreshBooks, on the other hand, provides just the right combination of simplicity and professionalism that is perfect for maintaining your freelancer freedom.

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