FreshBooks vs. QuickBooks vs. Xero is one of the most commonly debated topics. All three have their pros and cons, so which one is the best for your Shopify business?
This article will compare the three software programs across key categories: features, ease of use, and price.
At the end of this article, you should have a good idea of which Shopify accounting software is the best fit for your needs.
FreshBooks vs. QuickBooks vs. Xero: What Are They?
Before we look at the differences between FreshBooks vs. QuickBooks vs. Xero, let’s quickly find out what they are and what they do.
- QuickBooks: QuickBooks is one of the most popular accounting software programs available. It is an excellent choice for small, medium, and large businesses. You'll also find that it is available in both desktop and cloud-based versions.
- Xero: Xero is a renowned player in the accounting space. It has a modern approach and is easy to use. The software is ideal for small businesses with a low learning curve.
- FreshBooks: FreshBooks is a cloud-based accounting solution that is easy to use and navigate. It offers an array of features that make bookkeeping a breeze. The software is best suited for small businesses and freelancers.
FreshBooks vs. QuickBooks vs. Xero: The Ultimate Comparison
FreshBooks, QuickBooks, and Xero all have the essential accounting features businesses need to manage their finances.
However, they have varied approaches that can make a big difference in how well they work for your company.
In this guide, we'll compare FreshBooks vs. QuickBooks vs. Xero based on five key features:
- Ease of use
- Invoicing and payments
- Reporting and Dashboards
- Bonus Features
Let’s start by comparing how easy they are to use.
Ease Of Use
One of the most important factors to consider when choosing accounting software is how easy it is to use. If you're not comfortable using the software, you're not going to get the most out of it.
FreshBooks: Super-friendly, Easy To Set Up, Comprehensive Walkthroughs
FreshBooks is one of the most user-friendly accounting software options on the market. The interface is clean and straightforward, making it easy to find what you're looking for.
The software is also straightforward to set up. Even if you've never used accounting software before, you should be able to get started with FreshBooks without any problems.
This software has comprehensive walkthroughs that show you exactly how to do everything. If you ever get stuck, you can refer to the walkthrough and figure out what to do.
When it comes to importing data such as invoices and receipts, FreshBooks makes it very easy. You can either import them manually or use one of the many integrations that FreshBooks offers.
QuickBooks: The Middle Ground Between User-Friendliness And Complexity
QuickBooks is not one of the most accessible accounting software, but it's also not the hardest. It falls somewhere in the middle.
The interface is a bit more cluttered than FreshBooks, but it's still easy to find what you're looking for. The software is also reasonably easy to set up, although it may take longer than FreshBooks.
What makes its user interface unique is that you can customize it according to your needs. If you want a simpler interface, you can hide some of the features you don't use.
Xero: The Best For Power Users
Xero is one of the most complex accounting software options on the market. It's designed for power users who need all the accounting software features.
The interface is very cluttered and can be overwhelming for new users. Even if you have experience with accounting software, it will take some time to get used to Xero.
This software has a wide range of Excel import templates, making it easy to import data. Whether you want to import invoices, receipts, or something else, you should be able to find a template that meets your needs.
As far as ease of use is concerned, Xero wants to convert QuickBooks users to their platform.
They offer a free migration service to make the switch easy. They even have a guide on how to convert from QuickBooks to Xero. This is worth checking out if you're considering making the switch.
Check out our guide to why you should link Shopify and Xero to learn more about this powerful platform.
Invoicing And Payments
We cannot talk about FreshBooks vs. QuickBooks vs. Xero and fail to mention their invoicing and payments capabilities.
For many businesses, these two features are the most important when it comes to accounting software.
FreshBooks: Simple And Straightforward
When it comes to FreshBooks, invoicing is straightforward. You can create an invoice in just a few clicks. There are plenty of customization options available to ensure that your invoice looks professional.
FreshBooks also offers a wide range of payment options, so you can choose one that best suits your business. You can accept credit cards, e-checks, and even bank transfers.
QuickBooks: More Invoice Customization Options
QuickBooks also offers a simple invoicing system. However, it gives you more customization options than FreshBooks. You can do as much or as little customization as you want.
If you operate a brick-and-mortar store, QuickBooks offers mobile card readers which allow you to accept payments on the go.
You have to sign up for the QuickBooks' GoPayment service to take advantage of this.
You will get a card reader that accepts Stripe and chip payments. This card reader is compatible with all Android, iOS, and Windows platforms.
QuickBooks invoicing and payments are reliable and efficient. A basic dashboard gives you an overview of your sales and payments.
Xero: Efficient Invoicing And Payments
Xero has a web-based interface that is simple and easy to use. The main dashboard gives you an overview of your business' finances.
You can easily create and send invoices from the software. Whether you need one-time or recurring invoices, Xero can do it.
The extreme customization might be a bit overwhelming for new users. However, as you get used to the software, you will realize how effective and efficient it is. It has over 15 templates in different formats, ensuring your invoices look attractive and professional.
Xero also offers a wide range of payment options. You can accept online payments, credit cards, and even direct debit payments.
Integration with Xero's extensive inventory management system is a feature that makes Xero a step above the rest. This feature is designed to automate the process of creating and sending invoices.
Also, it eliminates the need for manual data entry!
Xero comes with an approval workflow feature for invoices. This feature allows you to set up an approval process for your invoices. You can ensure that all your invoices are accurate and approved before sending them out.
Reporting And Dashboards
Any accounting software worth its salt will come with a suite of reports that give you insights into your business. But which software offers the best reporting features?
FreshBooks: Easy But Basic Reporting
FreshBooks offers a suite of reports, but they're not as comprehensive as QuickBooks or Xero. However, they are much easier to use and interpret.
This software offers five basic graphs: outstanding revenue, revenue streams, spending, total profit, and unbilled time.
You can customize these reports to show data for a specific period. They can also be exported as PDFs or Excel files.
FreshBooks Dashboard shows seven downloadable reports:
- Profit/Loss: This report shows your business's total income and expenses and your net profit or loss.
- Tax summary: This report summarizes the taxes you've collected and paid over a specified time.
- Accounting aging: This report shows how much money you owe your vendors and how much your customers owe you.
- Invoice details: This report shows all the invoices that have been sent out. They include invoices that have been paid and those that are still outstanding.
- Expense report: This report shows all the expenses incurred over a specified period. The information includes both business and personal expenses.
- Time entry details: This report shows all the hours that have been logged and the projects that were worked on.
- Payments collected: This report shows all the payments that have been made and the payment method used.
QuickBooks: Standard Reporting Features
While QuickBooks offers several features for users, one of the most standout features is its reporting.
With over 80 built-in reports, QuickBooks gives users plenty of options to choose from when trying to generate the data they need. QuickBooks also allows users to create custom reports.
Custom reports are an excellent feature for those who need to track their business finances regularly. It provides quick and easy access to the data they need. Some of the reports that QuickBooks offers include:
- Profit and loss statements: This report shows users how much revenue their business generates and the expenses associated with running the business.
- Balance sheets: This report provides users with a snapshot of their business finances, including assets, liabilities, and equity.
- Income statements: This report shows users how much money their business brings in monthly or yearly.
Xero: Basic Reporting With Comprehensive Dashboards
When it comes to reporting, Xero offers a more basic suite of options than QuickBooks. However, it makes up for what it lacks in standard reports in its comprehensive dashboards.
Xero's dashboards give users a real-time view of their financial data and allow them to drill down into the details when needed.
Some of the downloadable reports that Xero offers include:
- Profit and loss: This report gives you an overview of your income and expenses for a specified period.
- Aged receivables: This report shows you how much money is owed to your business by customers, broken down by how long the invoice has been outstanding.
- Expense claims: This report shows you all your employees' expenses.
One of the factors you need to consider when choosing accounting software is pricing. Your budget will determine the features you can afford and the scale at which you can use the software.
One of the significant differences between FreshBooks vs. QuickBooks vs. Xero is price. The pricing of each software is determined based on the features it offers.
FreshBooks: Three Tiers Based On Billable Client Numbers
FreshBooks have Lite, Plus, and Premium plans. The Lite plan is the basic plan packed with features for small businesses. You can have up to five clients on this plan, and it's $15 a month.
The Plus plan gives you more control over your branding with custom FreshBooks-branded invoices and client portals.
This plan is also great for businesses that need to track their time and expenses. It's $25 a month, and you can have up to 50 clients.
Lastly, the Premium plan gives you everything on Plus, with added features like seeing who's working on what and custom role-based permissions.
The monthly price for this is $50, and you can have up to 500 clients. They have an Enterprise solution tailored for you if you need more than that.
Something worth noting is that the Plus and Premium plans have similar features, but the main difference is in the number of clients that you can bill.
The Plus plan (the most popular) allows for billing up to 50 clients, while the Premium plan removes that limit.
QuickBooks: Many Options Based On Number Of Users And Business Size
QuickBooks Online has five different plans: Simple Start, Essentials, Plus, Advanced, and Self-Employed.
The first four QuickBooks Online plans are designed for businesses with employees.
The main differences between these plans are the number of users (the number of people who can access your account) and the included features.
The Self-Employed plan is designed for well, self-employed individuals. This plan includes tracking mileage and expenses, invoicing, and managing your taxes. It's $10 a month.
Xero: Scalable Based On Number of Users
Xero has three plans: Starter, Standard, and Premium.
The Starter plan is designed for businesses just getting started with Xero. It includes invoicing, bank reconciliation, expense claims, and tracking inventory. This plan is $9 a month.
The Standard plan is for small businesses that need more features, like multi-currency invoicing, project tracking, and asset management. This plan is $30 a month.
The Premium plan is for businesses that need even more features, like advanced inventory management and unlimited users. This plan is divided into three categories:
- Premium 10: This plan is $70 a month and includes features like advanced inventory management and 10 users.
- Premium 20: This plan is $90/month. It comes with a plethora of advanced features and can be used by 20 people.
- Premium 100: At $180 a month, this is the most comprehensive plan. It can be used by 100 people and includes all of Xero's features.
Bonus Feature: Integration With Other Software
All three of the accounting software solutions offer integrations with other software.
This is essential because it allows you to connect your accounting software with other tools to run your business.
For example, you can connect your customer relationship management (CRM) system with your accounting software. When a new client is added to your CRM, it will automatically be added to your accounting software.
You can also integrate your Xero or QuickBooks account with Reconcilely, which allows you to reconcile your Shopify orders with accounting software automatically and in real-time. This saves you time and ensures that your accounting records are always accurate!
Conclusion: Which Is Best?
When choosing the right accounting software, it’s important to really consider your business needs and what features you need. Different businesses with unique needs will find some software solutions better than others. There is no one-size-fits-all solution.
To choose the best software, make sure to consider the following factors:
- Your accounting needs
- The size of your business
- Your budget
- Ease of use
After considering these factors, you have a good idea of which software would be suitable for your Shopify business. And then if you need a nifty tool to help reconcile all your Shopify sales, refunds, and fees, be sure to give Reconcilely a try!