FreshBooks vs Xero

Two cloud accounting platforms built for small businesses. FreshBooks is simpler and better for freelancers and solo operators. Xero is more full-featured and grows better with your business. Neither replaces a real accountant, but both make their job easier.

Updated 2026-09 · 2026

FreshBooks

Accounting for people who hate accounting

$21/moLite plan (5 billable clients)

Strengths

+Invoicing is the best in class - fast, clean, professional
+Time tracking built in and tied to billing
+Interface is simple enough that non-accountants can use it

Weaknesses

-Client limits on lower tiers force upgrades
-Double-entry accounting was added later, not native
-Inventory management is basic at best

Best for

Freelancers, solopreneurs, and service-based businesses that need great invoicing and simple expense tracking

Xero

Beautiful accounting software for growing businesses

$20/moIgnite plan (20 invoices/quotes per month)

Strengths

+Full double-entry accounting from the ground up
+Bank reconciliation is fast and well-designed
+Scales from freelancer to 50+ employee company

Weaknesses

-Steeper learning curve than FreshBooks
-Invoice limits on the entry-level plan are restrictive
-US payroll requires a third-party add-on

Best for

Small businesses with employees that need proper accounting, bank reconciliation, and room to grow

Feature Comparison

Feature	FreshBooks	Xero
Starting price	$21/mo (5 clients)	$20/mo (20 invoices)
Invoicing	Excellent - the core strength	Good, with invoice limits on entry plan
Bank reconciliation	Basic matching	Powerful, AI-assisted matching
Time tracking	Built in, tied to invoicing	Via integrations (Harvest, etc.)
Expense tracking	Receipt scanning included	Receipt capture with Hubdoc
Payroll	Gusto integration	Built-in (AU/NZ/UK), third-party (US)
Inventory	Very basic	Decent for small businesses
Multi-currency	Available on higher plans	Available on higher-tier plans only
Reporting	Basic P&L and tax reports	Comprehensive financial reporting
Accountant access	Can invite accountant	Accountant-friendly with advisor tools

The Verdict

If you are a freelancer or solo consultant, FreshBooks is probably the right call. Its invoicing is the best in the category, time tracking is built in, and you do not need an accounting background to use it. If you are running a business with employees, inventory, or plans to grow beyond a handful of people, Xero is the stronger foundation. Its double-entry accounting, bank reconciliation, and scalability make it the better long-term choice. Both are solid - the question is whether you need simplicity today or capability tomorrow.

How to switch from FreshBooks to Xero

Full FreshBooks export guide →

1Export your data from FreshBooks: go to Invoices, Expenses, and Time Tracking and use each section's CSV export option; for a full historical export including the general ledger, contact FreshBooks support and request a complete data export.
2Import your client list and invoices into Xero: use Xero's Import feature under Contacts and under Invoices to upload the CSV files, matching column headers to Xero's required import template.
3Reconnect your bank and credit card feeds directly in Xero, since FreshBooks reconciliation history does not transfer and you'll need to set up bank rules from scratch.
4Recreate recurring invoices, invoice templates, and retainer arrangements manually in Xero, since these do not come over in a CSV import.
5Replace FreshBooks' built-in time tracking with a Xero-compatible tool like Harvest or Xero Projects if your team bills hourly.
6Invite your team and accountant to the new Xero organization, run both systems in parallel for one billing cycle to confirm invoices and balances match, then cancel your FreshBooks subscription.

FreshBooks vs Xero: common questions

How do I export my data from FreshBooks before switching to Xero?+

FreshBooks doesn't have one single full-backup button. You export invoices, expenses, time entries, and clients separately as CSV files from the Reports and Invoices sections, or request a fuller export by contacting FreshBooks support directly. Do this before canceling your subscription, since access to historical data disappears once the account is closed.

What do I lose moving from FreshBooks to Xero?+

You lose FreshBooks' built-in time tracking tied directly to invoices, its simpler proposal and retainer features, and its more streamlined client portal. Xero can replicate some of this through integrations like Harvest or Xero Projects, but it's an extra setup step, not a built-in feature.

Is Xero's cheapest plan enough for a small team?+

The Ignite plan caps you at 20 invoices/quotes per month, which is tight if more than one person is billing clients. Most small teams end up needing the Grow plan for unlimited invoicing, so budget for that tier rather than the entry price when planning the switch.

Does Xero integrate with the same tools FreshBooks does, like Gusto or Zapier?+

Yes, Xero supports Gusto, Stripe, PayPal, and Zapier through its app marketplace, and it has more total integrations than FreshBooks (1000+ vs a few dozen). The catch is that FreshBooks' native time tracking and invoicing tie-in don't have a direct one-to-one replacement, so you'll be connecting a third-party app instead of using something built in.

How does the total cost compare over a year after switching from FreshBooks to Xero?+

FreshBooks Lite runs about $252/year. Xero's Ignite plan is similar at roughly $240/year, but if you need unlimited invoicing you're looking at the Grow plan at about $564/year. Run the numbers based on your actual invoice volume before assuming Xero is cheaper.