If you’re a small business owner, do you use online accounting software to track your invoicing, expenses, and bookkeeping? Because you should!
In fact, a survey conducted by Intuit QuickBooks found that 64% of Canadian small business owners are burdened with cash flow problems. So choosing the right online accounting software can mean the difference between success or failure for your business.
Let’s take a look at QuickBooks, Xero, and Freshbooks, three of the biggest names in the virtual accounting world, to help you make an informed decision about which software will fit your business like a glove.
Pricing and Features
If you decide to use Freshbooks, you will pay for the number of clients you have plus features plus additional users. If you opt to use QuickBooks Online, you will pay for features plus users. If you decide to go with Xero, its pricing structure is similar to QuickBooks.
Quickbooks offers four pricing plans. The first two tiers only allow one user to access the software, the third tier allows three users to have access, and the most expensive plan allows up to five users.
The most basic plan enables you to track income and expenses, estimate quarterly taxes, invoice and accept payments, and track miles. As you go up in price, you can track sales tax, pay bills, and access the time tracking feature. If you opt for the Plus plan, you will also have project tracking, and inventory tracking.
What’s more, if you subscribe with the help of an accountant, it’s possible for them to set you up with a discounted rate for at least one year.
For more information on pricing and plans, visit QuickBooks' pricing page.
Xero online accounting software offers three different plans, which range from $20/month to $40/month. The starter plan includes five invoices and quotes, five bills, and 20 bank transactions. As you go up in price, Xero features several options such as handling multiple currencies and accepting payments. You will also get unlimited invoices, quotes, bills, and bank transactions.
For more information on pricing and plans, visit Xero's pricing page.
Freshbooks offers three pricing tiers, which range from $15/month to $50/month. These plans allow you to go from five clients to up to 500 clients. Features include unlimited invoices and estimates, time tracking, online payments, and expense importing on all plans. When you opt for the more expensive plans, you will have access to features including payment reminders, late fees, recurring invoices, and proposals.
If you opt to pay annually instead of monthly, Freshbooks will give you 10% off any plan, and you can add each team member for an additional $10. Once a team member has access, they can track time, add expenses, and help you work on projects. If you run a business with over 500 clients or bill over $150,000 per year, then FreshBooks Select might be your best option.
For more information on pricing and plans, visit FreshBooks' pricing page.
If you’re looking for the most user-friendly, simple solution, then FreshBooks is probably your best bet. QuickBooks and Xero are a little more complex, as are their setups.
QuickBooks’ setup wizard might take a little more technical know-how than FreshBooks, but it does give you what you need for inputting your business information to the right places. Once you finish answering questions and adding your business’ information, QBO software will customize to your needs.
QuickBooks also provides multiple options for importing Excel sheets, but if you need to import a large amount of data, then it’s best to use Zapier integration.
Xero is a more sophisticated piece of online accounting software than QBO and Freshbooks, so the setup is a little more complex. Thankfully, Xero’s setup wizard is very user-friendly and makes the process as straightforward as possible.
Xero features Excel templates, which allow you to import almost anything, including customer data and invoices. Simply download the templates, enter your data from your previous spreadsheet into the right format, and re-upload it.
As Xero is competing directly with QuickBooks, it comes with instructions to easily convert from QuickBooks to Xero. You’ll need to perform some account maintenance, exporting, and importing, but the process of converting all of your information is relatively easy to do.
FreshBooks provides straightforward walkthroughs that make setup a breeze. They provide everything you need to get started by asking you for relevant information. It even provides helpful tips during the setup process, which takes only a few minutes!
FreshBooks makes it easy to import client data, expenses, items, services, and taxes with their spreadsheet templates. If you're currently using a different accounting service, you'll need to export your data first and make sure that the necessary columns are in place. Once that’s done, you’re ready to go.
QBO provides enough features for you to easily run your business while still giving your accountant and bookkeeper the features they need to keep track of your finances. QBO provides multiple features, with a user-friendly interface. Unfortunately, QBO is very glitchy and support is lacking. What’s more, QBO barely allows for any uploads and has very limited reporting compared to Xero.
Xero is our number one choice of virtual accounting software! It’s a fantastic option for growing businesses, with a focus on making accountants’ lives easier. This will help your business run more efficiently and could even reduce your annual accounting bill. Xero aims to be the future of online accounting by offering the most features, along with a simple pricing plan. Xero’s major advantage is its reporting and upload' capabilities. You can view and share interactive reports and budgets in real time and tailor reports and measure specific KPIs for your business. Xero makes it easy to share information with your advisor, or have them create and publish reports on your behalf.
If you're starting out or run a sole proprietorship in a service-based industry, then Freshbooks is a great option. It's very user-friendly, and the plans are affordable. However, it offers the least amount of features compared to QBO and Xero. If you plan to grow your company and hire employees, then Freshbooks might not be the best choice.
Canadian Cloud Accounting Can Help
If you’re still not sure which software is right for you or would like to ask additional questions about any of these options, don’t hesitate to reach out to us today. We’re more than happy to help with all your bookkeeping and accounting needs.