FreshBooks vs Xero
FreshBooks starts from the invoice: time tracking, a client portal and expense capture for people who bill hours. Xero starts from the ledger: unlimited users, the category's best bank reconciliation and a deep app marketplace. Freelancers and agencies pick FreshBooks; businesses where a bookkeeper and an accountant share the books pick Xero.
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Choose FreshBooks ifyour invoice is essentially a timesheet, clients need a portal to view and pay, and the books are kept by you alone or by very few people.
Choose Xero ifseveral people need access to the accounts, reconciling the bank is a daily task, and you want a conventional ledger that your accountant can work in directly.
FreshBooks and Xero side by side
| FreshBooks | Xero | |
|---|---|---|
| Our accounting software rank | #1 of 12 | #7 of 12 |
| Established in | Canada | New Zealand |
| Pricing | Per month by plan, published; Lite from $23 USD, extra users $11 each | Per month by plan, published |
| Free tier | — | — |
| Open source | — | — |
| Self-hostable | — | — |
| Built for | A freelancer or agency that bills time | A business where several people touch the books |
| Not for | A product business with stock | A manufacturer that needs real inventory |
Both are reviewed in full in our accounting software ranking: FreshBooks and Xero.
Where they differ
FreshBooks 1 · Xero 2 · open 1- 01
Billing for time
FreshBooks is built around billing time, with time tracking, simple invoicing, a client portal and well-made expense capture. Xero's project costing is thin, so tracking hours against jobs is not where it shines. For a freelancer or an agency whose revenue is hours multiplied by a rate, FreshBooks fits the way the work is actually sold.
Edge: FreshBooks
- 02
The accounting underneath
Double-entry bookkeeping arrived late in FreshBooks' history and the seams are still visible, because the product was designed around invoices, not journals. Xero is ledger-first, with the best bank reconciliation in the category. Anyone who needs the books to stand up as books, and not only as a record of invoices, is better served by Xero.
Edge: Xero
- 03
Adding people
FreshBooks charges for each additional user, so a growing team sees the price climb faster than expected. Xero includes unlimited users on every plan. Once an owner, a bookkeeper and an outside accountant all need a login, Xero's pricing stays where it was and FreshBooks' does not. For anything beyond a solo operation, this favours Xero.
Edge: Xero
- 04
Businesses that sell products
Neither is strong here. FreshBooks is not meant for a business with stock, and a product company will outgrow it. Xero's inventory is shallow enough that product businesses usually add a second system. Xero leaves more room to grow through its app marketplace, but if stock is central, both involve a compromise.
Depends on the buyer
When neither fits
If inventory is central to the business, neither fits: FreshBooks is not made for stock and Xero's inventory is thin. Zoho Books includes inventory, projects and timesheets at a low price and is the closer match for a small product business.
FreshBooks or Xero: questions
3 answersIs FreshBooks or Xero better for freelancers?
FreshBooks, for a freelancer who bills time. It is built around time tracking, simple invoicing and a client portal. Xero is the stronger accounting system, but its advantages, unlimited users and excellent bank reconciliation, matter more when several people work in the books.
Does FreshBooks charge per user while Xero does not?
Yes. FreshBooks publishes plan prices per month and charges extra for additional users. Xero includes unlimited users on every plan and is the only major package in the category that does so. The gap widens with each person who needs a login.
Can FreshBooks handle full accounting like Xero?
FreshBooks does have double-entry accounting, but it was added late and still shows its origins as an invoicing tool. Xero was built around the ledger and leads the category on bank reconciliation. If your accountant wants to work in journals, Xero will feel more natural.