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Quickbooks vs Xero: Which Is Best for My Freelance Business?

Whether you’re a small solo freelancer or you run your own creative agency, we can all benefit from a good system for our accounts. Quickbooks and Xero are arguably the most popular accounting software platforms. 

In order to help you decide which is best for your type of freelance business and services, let’s take a detailed look at the pros and cons of each. 

Price and subscription:

Xero is slightly more expensive than QuickBooks, but it doesn’t have limitations when it comes to users (although the cheaper plan does have some restrictions). You can also cancel anytime with QuickBooks, whereas Xero requires a month’s notice of cancellation.

Xero only has three price plans compared to QuickBooks’ four. It’s most basic ‘Starter’ plan is for sole traders and startups and offers up to 20 invoices/quotes and 5 bill payments a month. The Standard plan doesn’t have an upper limit on invoices and bills, while the most expensive Premium plan lets you manage accounting in multiple currencies. All three plans have optional add-ons for an extra cost, such as Payroll from an additional £5 a month.

QuickBooks splits its pricing plans into two categories – one for freelancers and sole traders, and another for businesses. If you only have Self Assessment to worry about, you can choose a Self-Employed or Simple Start plan for the very low price of £4-6 a month. Both are limited to just 1 user. If you pay VAT, work with suppliers or are a growing business, you can take your pick from Essentials (up to 3 users) or Plus (up to 5 users). The features list grows with the monthly subscription cost, and you can bolt-on extra services such as Payroll for a small extra monthly fee.

If you’re still unsure as to which platform will work best for you, the good news is that both platforms let you cancel at short to no notice, so you can test each out before making up your mind. We suggest testing both for a couple of weeks at a time in order to find you rhythm and reap the potential benefits. 

Mobile friendly:

Both Xero and Quickbooks are user-friendly, streamlined and cloud-based. They both have an app, and pricing based on a monthly subscription model.

Birth and scale:

Launched in New Zealand in 2006, Xero has become one of the top accounting tools on the market. It has over 2.7 million subscribers¹ across a number of countries, including the UK, Australia and New Zealand.

First launched in 2001³, QuickBooks Online is a cloud-based accounting service from Intuit with a monthly subscription plan. Over 4.5 million small businesses⁴ use the platform.

Its niche:

Xero is particularly popular with startups and younger business owners, and is known for its clean, uncluttered interface.
QuickBooks bills itself as ‘smart, simply accounting software – with no commitment’⁴. It’s particularly good at helping businesses to streamline repetitive tasks, and manage accounting processes from just their smartphone.

Main features:

Xero

  • Payroll, expenses and invoicing all in one place
  • Sync with your bank
  • Automate invoicing and reporting
  • Real-time collaboration with your accountant or employees.
  • Many options for customisation, including integration with 800+ third-party apps
  • Add-ons such as Xero Payroll, Xero Expenses and Xero Projects.

Quickbooks

  • Upload receipts for business expenses
  • Sending professional invoices in moments
  • Run payroll – including time tracking
  • Submit VAT in line with HMRC’s Making Tax Digital rules – including a VAT error checking feature
  • Connect with your accountant
  • Connect all bank accounts in one place
  • Real-time reporting for profit and loss, and cashflow insights.

App features:

In the Xero app, you can also:

  • Monitor spending
  • Convert quotes into invoices in just a few taps
  • Set reminders for bills to pay
  • Access reports on the move.

The QuickBooks app offers instant access to your QuickBooks dashboard, including accounting reports, invoicing and much more. All your data is automatically backed up to the cloud and synced across all your devices, so any changes made on the move will be updated when you next login in your laptop or desktop. This includes snapping pictures of your receipts and uploading them via your phone.

In a post covid world, both Quickbooks and Xero are international payment friendly:

Both Xero and Quickbooks integrated with Wise which means that you can use your Wise multi-currency account to automate international transactions and sync them to your accounting records. Through Wise, you can reduce the hefty fees most banks charge on international transactions – it’s simply one less thing to worry about.

In terms of which platform works best for you and your type of freelance work, the best thing to do would be to test out both platforms for a couple of weeks to a month. Both softwares have plans that are easy to cancel which also helps. Measure the outcomes and weigh up which brings you the best and most organised way of working. 

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