Xero excels with 500+ third-party integrations and advanced mobile accounting features, while FreshBooks prioritizes streamlined invoicing with superior invoicing-specific mobile tools and simpler setup for service businesses.
Xero vs FreshBooks — Side-by-side comparison on A Versus B
Choose Xero if you need extensive integrations (500+), advanced mobile accounting features, AI-powered document scanning, and serve scaling businesses. Choose FreshBooks if you're a service business prioritizing invoicing excellence, prefer a simpler setup experience, and want specialized mobile invoicing tools.
Cloud-first accounting software optimized for global small businesses and freelancers.
Cloud-based invoicing and accounting platform designed for freelancers and small service businesses.
Structured comparison data for Xero vs FreshBooks with 163 attributes.
Max Client Accounts (Accountant Edition)
Xero vs FreshBooks — Attribute Category Vocabulary
Taxonomy of attribute categories used to classify comparison data for Xero vs FreshBooks.
Is Xero or FreshBooks better for freelancers?
FreshBooks is typically better for freelancers. It's designed around the freelance workflow: create beautiful invoices, track time and bill by the hour, set up recurring invoices for retainer clients, send automatic payment reminders, and accept online payments. The client portal lets clients view and pay invoices professionally. The Lite plan ($19/month for up to 5 clients) covers most freelancers who have a handful of ongoing clients. FreshBooks' mobile app makes it easy to invoice on the go. Xero is more capable for bookkeeping, but its complexity is overkill for most freelancers. The exception: freelancers with an accountant who uses Xero, or those whose business has grown to require payroll and employee management.
Does Xero have better reporting than FreshBooks?
Yes — significantly. Xero's reporting suite is one of its core strengths: full balance sheet, profit & loss, cash flow statement, general ledger, aged receivables/payables, detailed bank reconciliation reports, fixed asset schedule, and custom report builder. Xero is built on true double-entry accounting, which means every transaction has a debit and credit — the reports are always in balance and GAAP-compliant. FreshBooks offers adequate reporting for small service businesses (P&L, expense reports, invoice aging, time entries) but lacks the depth required for complex businesses or accountants who need complete financials. If your accountant or investors need proper financial statements, Xero is the better choice.
Can I switch from FreshBooks to Xero later?
Yes, you can migrate from FreshBooks to Xero, but it requires effort. FreshBooks allows data export (CSV) of clients, invoices, expenses, and time entries. Xero can import some of this data via CSV imports or third-party migration tools (Movemybooks, Xerocon-certified advisors). The challenge: migrating historical transaction data and recreating the chart of accounts requires an accountant or bookkeeper familiar with both platforms. Practical advice: migrate at year-end or the start of a new fiscal year when your historical data is cleanest. Budget for 4–8 hours of setup and data review, or $200–500 for a bookkeeper to handle the migration properly. Most businesses outgrow FreshBooks when they hire employees or need inventory management.
Yes — FreshBooks offers payroll in the US through FreshBooks Payroll, powered by SurePayroll. It's an add-on to your existing FreshBooks subscription, not included in base plans. Features include: unlimited payroll runs, direct deposit, federal and state tax filing, W-2/1099 generation, and new hire reporting. Pricing is separate from FreshBooks — SurePayroll charges a monthly base fee plus per-employee fee. For full-service payroll with direct tax filing, Gusto (which integrates with both FreshBooks and Xero) is often recommended as the better standalone payroll option — it has a more modern interface and broader benefits administration features.
Can I use FreshBooks as my only accounting software for tax filing?
Yes, for most freelancers and sole proprietors. FreshBooks generates profit and loss statements, expense reports, and tax summaries (including 1099 tracking for contractors) sufficient for Schedule C filing. Its double-entry accounting module (added in 2019) produces standard financial reports your accountant can use. For simple service businesses — consultants, designers, photographers — FreshBooks alone covers tax reporting needs. It's less ideal for product-based businesses (limited inventory management), businesses with employees (payroll requires an add-on or separate tool), or businesses with complex multi-entity structures. Growing businesses that need investor-grade financials or complex accounting are better served by Xero or QuickBooks.