Xero vs FreshBooks: Which Accounting Software Wins in 2025?

Are you feeling swamped by invoices and expenses?

Keeping track of your business finances could be a real headache.

Looking for an easier way to handle your money and focus on your passion?

That’s where accounting software comes in. 

We’re diving deep into Xero vs FreshBooks to help you make the smart choice and ditch those financial frustrations for good.

Overview

We’ve put both Xero and FreshBooks through their paces.

Exploring their features, pricing, & ease of use. 

Side-by-side comparison to help you decide which accounting software best suits your business needs.

What is Xero?

So, you’re curious about Xero?

It’s a popular online accounting software used by tons of businesses around the world.

Think of it as your financial hub in the cloud.

Also, explore our favorite Xero alternatives…

Key Benefits

• Automatically imports daily bank transactions.
• Send professional invoices and get paid faster.
• Run over 50 types of financial reports.
• Connect with over 1000 other business apps.

Pricing

• Starter: $2.90
• Standard: $4.60
• Premium: $6.90

What is FreshBooks?

Now, let’s chat about FreshBooks.

This software is really popular, especially with freelancers and service-based businesses.

It’s designed to make things like invoicing and time tracking super simple.

Also, explore our favorite FreshBooks alternatives…

Key Benefits

FreshBooks has some really cool things it does well:

• It makes sending professional-looking invoices super easy. You can even set up automatic payment reminders!
• Keeping track of your time is a breeze with its built-in time tracking tools. This is great if you bill clients by the hour.
• You can easily see how much money you’re making and what you’re spending with its clear reports.
• It lets you work with your team and share information easily.
• FreshBooks can connect with over 100 other apps to make your work smoother.

Pricing

FreshBooks has different plans depending on what you need:

• Lite: $10.50/month
• Plus: $19/month
• Premium: $32.50/month
• Select: Talk to a consultant

Feature Comparison

Choosing the right accounting software is a huge decision for any small business.

Both FreshBooks and Xero offer robust features, but they cater to slightly different needs.

Let’s compare each platform’s features in detail to help you choose the best accounting solution for your business.

1. Invoicing and Recurring Invoices

• Xero: Xero offers professional invoice creation with customizable templates. Setting up recurring invoices is straightforward, allowing you to automate billing for regular clients. Xero also includes features like payment reminders to help you get paid faster.
• FreshBooks: FreshBooks makes creating and sending invoices incredibly easy, with a focus on aesthetics and client communication. Recurring invoices are also a strong feature. FreshBooks offers automatic payment reminders and the ability for clients to accept credit card payments directly from the invoice.

2. Bank Reconciliation

• Xero: Xero offers robust bank reconciliation features, allowing for direct bank feeds and automated transaction matching. This double-entry accounting system ensures accuracy and provides a clear view of your cash flow.
• FreshBooks: While FreshBooks connects to your bank accounts, its bank reconciliation is not as comprehensive as Xero’s double-entry accounting system. It’s more focused on expense tracking and categorizing transactions for tax purposes.

3. Reporting and Accounting Reports

• Xero: Xero provides a wide range of detailed accounting reports, including profit & loss statements, balance sheets, and cash flow statements. Its double-entry accounting foundation allows for in-depth financial analysis, which is crucial for making informed business Choices and working with an accountant.
• FreshBooks: FreshBooks offers useful reports like profit and loss, expense reports, and accounts receivable aging. While helpful for understanding your business’s financial health, its reporting capabilities are generally less extensive than Xero’s double-entry accounting reports.

4. Mobile App and Accessibility

• Xero: Xero offers a well-regarded mobile app for iOS and Android. The app allows you to manage key tasks like invoicing, expense claims, and bank reconciliation on the go and provides good functionality for running your business remotely.
• FreshBooks: The FreshBooks mobile app is also highly rated, particularly for its invoicing, time tracking, and expense management features. It is designed for easy use while you’re out and about.

5. Number of Users and Collaboration

• Xero: Xero’s pricing structure allows for unlimited users on most of its plans, making it a scalable option for growing teams. This promotes collaboration and ensures everyone who needs access can have it.
• FreshBooks: FreshBooks’ lower-tier plans limit the number of clients you can bill (e.g., five clients on FreshBooks Lite). While you can add team members, the focus is often on single users or smaller teams managing client relationships. FreshBooks offers good client collaboration features.

6. Ease of Use

• Xero: While powerful, some users find Xero’s interface can be a bit more complex initially, especially if they are new to double-entry accounting. However, it becomes quite efficient once you get the hang of it.
• FreshBooks: FreshBooks is generally praised for its intuitive & easy-to-use interface, making it a popular choice for those who want a straightforward accounting solution without a steep learning curve. FreshBooks makes it simple to manage your finances.

7. Integrations

• Xero: Xero offers a vast marketplace of integrations with other business software, including CRM, e-commerce platforms, and payment processors. This allows you to connect Xero with the other tools you use to run your business efficiently. Xero also integrates with QuickBooks Online.
• FreshBooks: FreshBooks also integrates with various apps, focusing on tools that are particularly useful for service-based businesses, such as payment gateways and project management software. While the integration list is growing, it’s generally smaller than Xero’s. Many businesses that need robust integrations often consider Xero.

What to Look For When Choosing Accounting Software?

• Scalability: Can it grow with your business?
• Industry Specificity: Does it cater to your business type?
• Support Quality: Is help readily available when you need it?
• Security: How well does it protect your financial data?
• Customization: Could you tailor it to your specific workflows?
• Budget: Does the pricing align with your financial constraints?

Final Verdict

So, FreshBooks vs Xero?

For most businesses, Xero comes out on top as the best accounting software.

It’s powerful and can grow with you, plus its accounting features are strong.

Still, FreshBooks is great, especially for freelancers wanting simplicity and client tools.

We’ve tested both, so our Xero comparison is solid.

Trust us, we know what businesses need.

Pick Xero for strong accounting, or FreshBooks if easy client work is key.

More of Xero

• Xero vs Puzzle IO: Puzzle IO excels in project management and job costing for construction.
• Xero vs Dext: Dext specializes in automated data extraction from receipts and invoices.
• Xero vs Synder: Synder focuses on e-commerce integrations, syncing sales data.
• Xero vs Easy Month End: Easy Month End simplifies and automates month-end closing processes.
• Xero vs Docyt: Docyt uses AI to automate bookkeeping and financial document management.
• Xero vs RefreshMe: RefreshMe provides automated financial reporting and analysis.
• Xero vs Sage: Sage offers robust enterprise-level accounting with strong inventory management.
• Xero vs Zoho Books: Zoho Books is known for its affordability and strong CRM integration.
• Xero vs Wave: Wave provides free accounting software, ideal for very small businesses.
• Xero vs Quicken: Quicken focuses on personal finance and basic business accounting.
• Xero vs Hubdoc: Hubdoc automates document collection and data entry.
• Xero vs Expensify: Expensify streamlines expense reporting and management for businesses.
• Xero vs QuickBooks: QuickBooks offers a wide range of accounting features with strong payroll integration.
• Xero vs AutoEntry: AutoEntry automates data entry from invoices, receipts, and bank statements.
• Xero vs NetSuite: NetSuite provides comprehensive enterprise resource planning (ERP) with advanced financials.

More of FreshBooks

• FreshBooks vs Puzzle IO: Puzzle IO excels in project and job costing, better suited for construction than FreshBooks.
• FreshBooks vs Dext: Dext automates data entry from documents, streamlining a process that FreshBooks handles manually.
• FreshBooks vs Synder: Synder specializes in e-commerce integrations, which is a narrower focus than FreshBooks.
• FreshBooks vs Easy Month End: Easy Month End simplifies closing periods, but FreshBooks’ primary focus isn’t month-end closure.
• FreshBooks vs Docyt: Docyt uses AI for bookkeeping tasks, offering more advanced automation than FreshBooks.
• FreshBooks vs RefreshMe: RefreshMe provides detailed financial reporting, an area where FreshBooks has more basic tools.
• FreshBooks vs Sage: Sage has much more powerful enterprise-level accounting compared to FreshBooks’ small business focus.
• FreshBooks vs Zoho Books: Zoho Books provides more comprehensive CRM integration, expanding accounting functions beyond FreshBooks.
• FreshBooks vs Wave: Wave offers free basic accounting, a starting point but not as comprehensive as FreshBooks paid features.
• FreshBooks vs Quicken: Quicken offers personal finance, while FreshBooks is business-focused, with some overlapping features.
• FreshBooks vs Hubdoc: Hubdoc automates document gathering, improving FreshBooks’ invoice workflow, but is a separate tool.
• FreshBooks vs Expensify: Expensify handles expense management, a subset of FreshBooks that FreshBooks handles in a different way.
• FreshBooks vs QuickBooks: QuickBooks offers full accounting features, making it comparable to FreshBooks but with more robust options.
• FreshBooks vs AutoEntry: AutoEntry automates data capture, enhancing data input for FreshBooks.
• FreshBooks vs NetSuite: NetSuite provides complete ERP, well beyond the scope and accounting of FreshBooks which is not as comprehensive.

Frequently Asked Questions