Xero vs FreshBooks
Xero or FreshBooks? Here is how they compare on price, free plan, platforms and the jobs each does best, from each vendor's own pages.
| Compared on | Visit | Visit |
|---|---|---|
| What it is | Cloud accounting with three US plans, no per-user fees, Gusto payroll and the JAX AI assistant | Invoicing and accounting for freelancers and service businesses, priced by number of billable clients |
| Free plan | No | No |
| Cheapest paid plan | $27/mo (Early)Xero pricing | $20.70/mo billed annually (Lite)FreshBooks pricing |
| What it covers | Per organization, no per-user licence fees; send quotes and 20 invoices, enter 5 bills; auto-reconcile is a $5/month add-on. Promotion: 90% off ($2.70/month) for the first 6 months for new US customers, until 2 November 2026. | Invoice up to 5 billable clients; extra team members $11/month each; $248.40 billed yearly. Promotion: 80% off ($4.60/month) for the first 4 months. |
| Free trial | One month free on any Xero plan | 30-day free trial, no credit card required |
| Platforms | Web | Web, iOS, Android |
| Integrations (vendor's figure) | Integrate with 1000+ apps | 100+ apps in the FreshBooks AppStore |
| Open source | No | No |
| Made by | Xero Limited | 2NDSITE Inc. |
Choose Xero if…
- The job is small businesses that want several people in the books without per-user fees.
- The job is businesses that work closely with an accountant or bookkeeper.
Choose FreshBooks if…
- Price matters: its cheapest paid plan is $20.70/mo against $27/mo.
- You want a mobile app (iOS and Android).
- The job is freelancers and consultants who bill a small number of clients.
- The job is service businesses that invoice for tracked time and project work.
Still weighing it up?
If neither is quite right, Xero and FreshBooks are also compared with their other rivals: QuickBooks Online vs Xero, QuickBooks Online vs FreshBooks and Xero vs Sage Accounting.
What Xero does
- Bank connections to 21,000+ institutions, with bank reconciliation on every plan
- JAX auto-reconciles transactions when it is highly confident and suggests matches otherwise (Growing and above)
- JAX AI chat answers questions about your financials with charts and tables, researches tax and benchmarks, and drafts invoices from quotes
- Smart Document Capture for bills and receipts on every plan
- Quotes, invoices and online invoice payments, plus free standard ACH bill payments
- Cash flow forecasts of 30, 60 or 180 days, dashboards and scorecards by plan
Watch out for
- Early caps you at 20 invoices and 5 bills, and auto-reconcile costs $5 a month extra
- Multi-currency, projects and expense claims need Established ($97/mo)
- Payroll costs $36 a month plus $6 per person through Gusto
What FreshBooks does
- Invoices that pull in tracked time and expenses, calculate taxes and send payment reminders
- Online payments, with Advanced Payments for card acceptance and recurring billing
- Estimates, proposals and client retainers (proposals and retainers from Plus)
- Expense tracking with bank imports, automatic categorisation and receipt data capture (Plus and above)
- Accounts payable with bill receipt scanning and line items (Premium)
- Double-entry accounting with profit and loss, balance sheet and trial balance reports
Watch out for
- Lite invoices only 5 clients and Plus 50; unlimited clients need Premium ($70/mo)
- Each team member costs $11 a month on top of the plan
- Bank reconciliation, receipt scanning and accountant access are not on Lite
Questions
Is Xero or FreshBooks cheaper?
On published entry prices, FreshBooks is cheaper: $27/mo (Early) for Xero against $20.70/mo billed annually (Lite) for FreshBooks. What each plan includes differs, so compare the limits too.
Do Xero and FreshBooks have free plans?
Neither has a free plan. Xero's trial: one month free on any Xero plan. FreshBooks offers a 30-day free trial, no credit card required.