Xero and FreshBooks are each among our top picks for the best accounting software. But compared head-to-head, Xero pulls through as the more scalable solution. It has stronger accounting features across all its plans, as well as unlimited users. You can also access more than 1,000 third-party integrations.
FreshBooks still has its strengths. It stands out in particular for its unlimited time tracking and streamlined invoicing. These tools are most useful to freelancers, independent contractors and other self-employed professionals.
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FreshBooks pros and cons at a glance
Pros
Stay in touch with clients through the FreshBooks mobile app and get notified when invoices have been viewed or become overdue.
Intuitive, customizable invoicing capabilities compete with those of more robust accounting solutions.
Track time and add billable hours to invoices in all plans.
Weekday phone support in all plans.
Cons
Highest-tier Select plan only comes with two users (additional users add $11 per month) and lower-tier plans put limits on billable clients.
Least expensive plan lacks double-entry accounting reports, bank reconciliation and accountant access.
Xero pros and cons at a glance
Pros
Unlimited users in all pricing plans.
Integrates with more than 1,000 third-party apps.
Automated bill and receipt capture through Hubdoc.
Simple layout and easy to use.
Cons
No inbound phone customer support (callbacks are available, though).
Entry-level plan limits bills and invoices to five and 20 per month, respectively.
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FreshBooks vs. Xero at a glance
FreshBooks | Xero | |
|---|---|---|
Key features | Has a strong invoicing feature; app lets users send invoices on the go, scan receipts and track mileage; basic inventory tracking for billable items; least expensive plan lacks double-entry accounting reports. | Has robust reporting tools and report customization options, basic inventory tracking in all plans and a capable mobile app; Early plan limits the number of invoices and bills. |
Ease of use | Auto-categorizes transactions for you, but you can’t set up your own bank rules; least expensive plan lacks bank reconciliation tools. | Includes tools that help automate the reconciliation process; has a simple layout and a customizable dashboard. |
Scalability | Can support freelancers, contractors and small businesses with a handful of employees; highest-tier plan includes two users (additional users can be added for a fee). | Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users. |
Ease of sharing with accountants | Least expensive plan doesn’t allow accountant access. | Includes audit trails and easy accountant access; although the product is gaining popularity in the U.S., it’s less popular than some competitors like QuickBooks. |
Integrations | Integrates with more than 100 third-party apps; limited choices for direct payroll and point-of-sale integrations. | Integrates with more than 1,000 apps. |
Customer support | Includes phone support in all plans from 8 a.m. to 7 p.m. ET from Monday to Friday; offers email and live chat support. | Does not provide a phone number to customers but a representative will call you if necessary; no live chat support. |
Cost |
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Advanced features | Project tracking tools in higher-tier plans; lacks industry-specific reports and transaction tracking tags; users with multiple businesses must pay for separate subscriptions. | Includes project tracking tools in most expensive plan; transaction tracking categories; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions. |
Why Xero wins
Scalability
If you want to add multiple users to your accounting software, Xero is a better choice than FreshBooks. The former accommodates unlimited users in all plans. You can add new users via email and assign them one of several different user roles. You can give users additional permissions to particular features too. Those include reports, projects and new expenses.
All FreshBooks plans, except for the custom Select plan, come with one user. Additional team members cost $11 each per month.
Reporting
Both FreshBooks and Xero let you track your business's performance. But Xero’s reporting is more robust, thanks to its detailed accounting features.
Xero offers more than 60 reports. And it allows you to add tracking categories. These help you monitor performance in different areas of your business. In comparison, FreshBooks has fairly basic reporting tools. You can generate traditional financial reports, but they aren't available with all plans. For example, you’ll need the Plus plan to access a general ledger, trial balance or chart of accounts. You'll have to upgrade to the Premium plan to create any accounts payable reports.
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When you might choose FreshBooks instead
Customer support
If you prefer phone support, FreshBooks has better options than Xero. FreshBooks offers phone support available 8 a.m. to 7 p.m. ET Monday through Friday. There is also live chat and email support. A representative typically addresses emails within 90 minutes.
Xero doesn’t give you the opportunity to call a representative directly for assistance. Instead, it will call you if you provide a phone number. You can reach support by raising a case (similar to filing an IT ticket) on the Xero website.
Time and mileage tracking
FreshBooks includes unlimited time and mileage tracking with all plans. You can automatically track time using the mobile app, a browser extension or third-party apps like Trello and Asana. You can bill for hours worked and track and manage time for a specific project as well. Your employees can also use FreshBooks to track their time (if you’re using the team members add-on).
Xero only offers time tracking in its Established plan.
FreshBooks and Xero alternatives
Starting at $0Additional pricing tiers (per month): $20, $50, $70, $150, $275. | Starting at $0Additional pricing tiers (per month): $20, $38, $85, $140, $340. |
Promotion 14-day free trialof the Premium plan. | Promotion 50% offfor 3 months or free 30-day trial. |
Zoho Books: Better free plan. Zoho Books stands out for its free accounting software plan. Of all our free accounting software picks, it has the most features. Those include accountant access, recurring invoicing, mileage expense tracking and receipt scanning. Read our full Zoho Books review.
QuickBooks Online: Better accountant familiarity. Though Xero is becoming more popular, QuickBooks is an industry standard in the small-business accounting world. If you're planning to work with a bookkeeper, they will probably be most familiar with QuickBooks Online. That said, there are certainly bookkeeping professionals who prefer QuickBooks alternatives. You might just have to dig a little deeper to find them. Read our QuickBooks Online review.
» MORE: Xero vs. QuickBooks Online
Wave: Better for just the basics. If you're only completing one or two transactions per week, Wave might be worth considering. Though its features are limited, its simplicity makes it easy to work with. Read our full Wave Accounting review.
Methodology
NerdWallet independently reviews accounting software products before determining our top picks. We collect the data for our software ratings from products’ public-facing websites and from company representatives. Our editorial team reviews information on a regular basis for consistency and accuracy.
We also periodically update our scoring system to reflect changing industry norms and business needs. For instance, in 2026, we stopped factoring in whether mobile apps work for both Android and iOS smartphones. If an accounting software product has its own mobile app, it’s almost always available for both operating systems.
NerdWallet’s accounting software ratings favor products that are easy to use, reasonably priced, have a robust feature set and can grow with your business. The best accounting software received top marks when evaluated across 10 categories and more than 30 subcategories. Learn more about how we rate small-business accounting software.
These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most. We encourage you to research and compare multiple accounting software products before choosing one.
NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.
