Xero vs FreshBooks: which should you choose?
Quick answer: Xero is built for unlimited users, while FreshBooks suits freelancers. For most users FreshBooks is the stronger default, but Xero can be the better fit depending on your budget and use case. FreshBooks has the lower entry price.
Xero and FreshBooks look similar on the surface; the differences show up in practice. Below we compare them on pricing, strengths and the use cases each one fits, then give a clear verdict.
Side-by-side
| Xero | FreshBooks | |
|---|---|---|
| Category | Accounting | Invoicing & Accounting |
| What it's known for | Cloud accounting with unlimited users on every plan, strong bank reconciliation and a huge app marketplace; popular with accountants outside the US. | Invoicing-first accounting built for freelancers and service businesses; very easy time tracking, proposals and client billing. |
| Pricing | From ~$20/mo (Early) up to ~$80/mo (Established); regional pricing varies. | From ~$19/mo (Lite) up to ~$60/mo (Premium); Select tier custom. |
| Best audience | Non-US SMBs and accountants who want unlimited seats and a huge app ecosystem. | Freelancers and small service businesses focused on invoicing and time billing. |
| Best for | Unlimited users, Accountants, Non-US businesses | Freelancers, Service businesses, Invoicing |
| Entry price | ~$25/mo | ~$23/mo |
| Biggest strength | Flat per-organization pricing with unlimited users. | Very easy to use for freelancers and service businesses. |
| Main caveat | Cheapest Early plan caps invoices (20) and bills (5) per month. | Lite plan caps billable clients at 5; Plus at 50. |
Features compared
The feature sets only partly overlap. Here is what each one actually gives you:
Xero key features
- Unlimited users on every plan with no per-seat fee
- Core accounting: bank reconciliation, invoicing, bills, sales tax
- Hubdoc document capture included
- Multi-currency, project tracking and analytics on the Established plan
FreshBooks key features
- Invoicing-first workflow with recurring invoices and payment reminders
- Built-in time tracking and project/proposal tools
- Expense tracking and double-entry accounting on higher tiers
- Client portal for billing and approvals
Pricing tiers side by side
Xero plans
| Plan | Price | What's included |
|---|---|---|
| Early | ~$25/mo | Capped 20 invoices / 5 bills |
| Growing | ~$55/mo | Unlimited invoices and bills |
| Established | ~$90/mo | Multi-currency, projects, expenses, analytics |
FreshBooks plans
| Plan | Price | What's included |
|---|---|---|
| Lite | ~$23/mo | Up to 5 billable clients |
| Plus | ~$43/mo | Up to 50 clients, double-entry |
| Premium | ~$70/mo | Unlimited clients |
| Select | custom | Dedicated account manager |
Tiers compiled from the vendors' published plans and independent reviews; prices are approximate and change often, so confirm current figures (and your region's taxes) on each vendor's site.
Strengths compared
Where Xero wins
Unlimited users at a flat price makes it the value pick for teams and accountant collaboration.
- Flat per-organization pricing with unlimited users.
- One of the highest integration counts among accounting tools.
That makes it the stronger pick for non-US SMBs and accountants who want unlimited seats and a huge app ecosystem.
Where FreshBooks wins
Built around getting invoices out and paid, ideal for service-based solopreneurs.
- Very easy to use for freelancers and service businesses.
- Strong time-tracking-to-invoice flow.
That makes it the stronger pick for freelancers and small service businesses focused on invoicing and time billing.
Verdict: choose by fit
There is no single winner; it depends on where you sit.
- Choose Xero if you fit its core audience — non-US SMBs and accountants who want unlimited seats and a huge app ecosystem.
- Choose FreshBooks if you fit its core audience — freelancers and small service businesses focused on invoicing and time billing.
FAQ
Is Xero better than FreshBooks?
FreshBooks is the stronger default for most users, but Xero can be the better fit depending on your budget and use case.
What is the main difference between Xero and FreshBooks?
Xero is unlimited users at a flat price makes it the value pick for teams and accountant collaboration. FreshBooks is built around getting invoices out and paid, ideal for service-based solopreneurs.
Which is cheaper, Xero or FreshBooks?
Entry pricing differs: Xero starts at ~$25/mo, while FreshBooks starts at ~$23/mo. Compare the tiers above against your usage.
Sources
Facts above are drawn from these independent reviews and the vendors' own pages for Xero and FreshBooks: