Top 3 Accounting Software: Comparison of Freshbooks, Xero and Zoho Books

FreshBooks No. 1 Alternative

USER SATISFACTION 99%
OUR SCORE 9.8

With technology developing rapidly and more and more operations shifting to the cloud, companies and sole accountants have no choice but to choose an adequate accounting program that will keep them a step ahead of their competitors.

In 2017 we have again rounded up our list for the top three accounting software solutions. Unsurprisingly, FreshBooks keeps its top spot, but the other two spots are now occupied by new leaders: Xero and Zoho Books. We also added Intacct as an honorable mention entry, given its recommendable features and strong market presence.

In this article you will find out more about the features of each of these solutions and our reasons for why they are our top choices when it comes to managing transactions and keeping your financials neatly organized. Furthermore, if you’re on the hunt for the best accounting software, often, choosing the leading solution is the right decision. In this case, you’ll realize why FreshBooks has maintained its top position when compared with the other leading accounting solutions. The devil is in the details and this article will help you sort those details out.

Our top 3 accounting software choices for 2017:

  1. FreshBooks – Our Score: 9.8 [ Get free trial ]
  2. Xero – Our Score: 9.7/10 [ Get free trial ]
  3. Zoho Books – Our Score: 9.6/10 [ Get free trial ]

Top 3 Accounting Software Solutions of 2017

1. FreshBooks – Our Score: 9.8/10

FreshBooks invoice interface is intuitively designed, showing all essentials on a neat layout.

FreshBooks won our Best Accounting Software Award for 2016

FreshBooks is a top accounting software designed for small business, but medium and larger enterprises are known to use it, too, primarily because of its extensive feature set and integration reach. The software features intuitive core accounting tools, including invoicing, expenses, time tracking, payments and reporting. With this app, a small business owner gets to save time with automation and streamlined processes, and can keep all his financials in one place.

For its usability, scalability and robust features, FreshBooks got the highest total score in our test with a final SmartScore of 9.8/10. It also got a very high user satisfaction rating of 99%. Last year our team also distinguished it with our Best Accounting Software Award and the Supreme Software Award.

Its pricing plans are easily scalable to your growing needs and the vendor provides a comprehensive free trial plan that enables you to see if the features truly match your needs and situation. You can easily sign up for FreshBooks free trial here.

2. Xero – Our Score: 9.7/10

Multiple bills are easy to track with Xero’s streamlined layout.

Xero won our Expert’s Choice award for 2017

Xero is a robust small business accounting solution that goes beyond just core accounting functionalities. It also features inventory, purchasing, expense management, payroll and asset management capabilities. Their software suits well the process requirements of various industries, including retail, high-tech, startups, creatives and e-commerce. The software won our Expert’s Choice Award for 2017.

As it is cloud-hosted, you can easily access the software’s dashboards and tools from its Android or iOS apps. You get a real-time view of your cash flow. You can likewise use the mobile app to send invoices through email and connect the software to your payment gateway to fast track payments. Using Xero’s streamlined and automation can cut short the cash cycle.

Likewise, bank reconciliation is seamless. Xero imports your recent bank, PayPal or credit card transactions and automatically categorizes them. On the other hand, purchase orders can be linked automatically to bills for quick payments. You can also set up alerts for collections or reminders to clients of their late payments. Further boosting its functionalities are the 500+ business apps you an integrate with Xero. These include payment gateways, e-commerce platforms and mailers.

The vendor offers a great free trial that you can use to test all the key features offered by this solution. You can easily sign up for Xero free trial here.

3. Zoho Books – Our Score: 9.6/10

Zoho Books’ dashboard shows the key metrics that matter to you.

Zoho Books is a double-entry accounting software designed for small businesses and mid-sized companies to help them manage their finances with greater visibility and efficiency. The software helps streamline back-office workflows and centralize transactions to keep your collectibles and payments on schedule and your cash flow at healthy levels.

With Zoho Books you can get paid faster online by emailing invoices and linking the app with a payment gateway. You can also spend less time on repetitive tasks by automating recurring bills, payment alerts, auto charges and acknowledgment notes.

Zoho Books got your different transaction processes covered. You can create financial statements, track working hours to a T, generate sales, purchase and tax reports and much more. It also features project management and collaboration sections to help your teams work closely together or help you engage and manage customers from one place.

Furthermore, it is capable of managing multiple timesheets if you’re handling projects for different clients, and connect each timesheet to automatic invoicing to keep your collectibles on time. Other key features notable in this software include: inventory management, expense management and sales order management.

There is also a free trial offered by the vendor. You can easily sign up for Zoho Books free trial here.

Now, let’s discuss the features of each solution in more detail.

Features of FreshBooks

FreshBooks has since grown from being a small business accounting software into a robust, fully featured system that encompasses the many aspects of your transactions. It features time tracking, expense management, reports and analytics and add-ons that extend its functionalities. This makes FreshBooks a preferred app also by large companies that are looking for a scalable, highly intuitive and flexible accounting software with easy pricing terms. Below are the main features we like about FreshBooks, which you’ll likely like, too.

Contacts and Items

One of its better features is its contacts and items. Contacts follow a standard format, but there is also a secondary page that allows you to link additional data relating to the contact. A screen shows important data like logged hours, emails sent, account statements, and invoices that concern the contact. Interestingly, the screen also displays the average number of days the client usually pays, a handy feature to help you manage the cash flow.

FreshBooks also allows for second-tiered users for people who can only access certain sections of the accounting records. However, additional users are billed as an add-on each. For example, you can give contractors access to invoicing and time-tracking for their billing, or limit your accountant to read-only access for journal entries and reports.

Meanwhile, items support both product and service with fields for cost, description, quantity, name, and taxes. Track Inventory automatically subtracts the number of stocks every time you add an item in an invoice, but, conversely, you need to add the number when you replenish stocks. Although it is not a full inventory management, it is what most small and medium businesses need. As with contacts, items feature a secondary page that displays related data, including invoices, sales reports, stock level and estimates.

Invoices 

Another great FreshBooks feature is creating invoices. It’s intuitive and neat, alerting you for missing critical fields like your address and billing type (item vs. time vs. both). You can edit the fields, such as, purchase order number, date, items, etc. Moreover, calculations are automated once you’ve assigned rates like taxes and unit cost; you need only to enter hours or quantity. FreshBooks also lets you set recurring invoices and credit receipts and payment options such as FreshBooks’ own merchant account, Stripe, and PayPal.

Estimates

This module enables you to transform estimates to billing in an instant and shorten payment processing. Projects can easily be started with a quote, then you can keep tab of running expenses, adjust your fee and quickly bill the total to client. Estimates can be customized to your branding to help you appear more professional.

Time-Tracking

FreshBooks is also well liked for its flexible tracking tool for time and expenses, which allows for daily, weekly, and monthly views. The tool fits a simple project record that shows the project name, billing method, client, and estimate hours to finish the project. With time-tracking, you can see a clear breakdown of the working day, view your team’s productive hours, see detailed time entry notes and automatically create invoice for tracked hours.

Expense

Expense records display important information such as vendor, date, category, sales tax (two levels tops), and client. You can set it as recurring and quickly convert the expense claim to an invoice. You can link expense to your bank or credit card account and free you from manual entries and your bank transactions are constantly updated. Receipts are likewise attached as digital file taken from your phone and logged into FreshBooks, so you don’t lose proof for reimbursement. Moreover, you can track project spending easily, giving your team and you an overview of running expenses and better control over cash leakages. The Expense module also supports multi-currency and enables you to view tax-deductible expenses.

Payments

With this module you no longer need to manually record receivables. It links to your credit card account, so all payments are automatically logged in FreshBooks. You can also send automatic reminders for late payments without having to talk to clients. Payment allows the following features also: quick deposits to your bank; single-click setup; and small business credit card processing.

Reporting and analytics

You can quickly see how much profits you’re making or, if in fact, you’re losing money. This module enables you to crunch the numbers with a few clicks using template reports for profit-loss statements, sales tax summaries, expense reports and other financial statements.

Mobile

FreshBooks has one of the most intuitive and rich mobile app for accounting. You can process invoices anywhere you have internet access, snap photos of receipts, keep track of expenses in transit or stay updated with key metrics displayed on the dashboard. Data is synced across all devices that tap into your FreshBooks account.

Navigation and Integration

It’s the accounting software’s signature, the ease of navigating its features and functions. A series of tabs run horizontally at the top, where subtabs show you more related features. For example, under Invoices you see Recurring, Received, Payments, Credits, and Items. The same relational organization can be found in other tabs for estimates, expenses, reports, and time tracking. Navigation is made easier with drop-down menus, buttons and icons, and interactive elements.

On another note, FreshBooks has a wide range of add-ons and integrations that extend your accounting functions. On top of its flexible API–it lest you connect FreshBooks to your applications–FreshBooks integrates with popular and standard business solutions, such as: help desk; e-commerce; payroll; project management; and payment gateways.

FreshBooks’ time tracking can handle multiple projects at once.

Features of Xero

Xero is a powerful small business accounting software that is applicable to a wide range of industries and their vertical requirements, such as, hospitality, high-tech, nonprofit, Amazon sellers, creatives, construction and small business. Below are its top features that we believe deserve an inclusion to our top accounting software list. Xero also features expense management, contacts and smart lists, inventory and estimates and supports multi-currency for global operations, on top of these commendable features:

Online invoicing and payments

You get paid faster by sending online invoices through email and accepting credit or debit card payments. You can also link your PayPal or Apple Pay accounts to give clients more payment options. Similarly, you can create a credit note for different invoices or record a refunds.

Advisor tools

Once you’re set up with the advisor role you can use Xero’s cash coding to reconcile bulk bank statement lines. It’s also easy to search for transactions, fix bugs and recode items on various transaction lines simultaneously. You can also edit tax rates, accounts, contacts and tracking.

Asset management

Use the fixed asset management feature to monitor your assets like machinery, computers, vehicles, office equipment and other big ticket items. Together with your accountant you can manage depreciation  and disposal with greater visibility and tracking efficiency.

Bank reconciliation

Importing and categorizing bank transactions is as easy as clicking OK. Your bank and credit card transactions are imported to Xero daily, saving you time and effort. Reconciliation is also seamless because you can customize rules to match your transactional processes.

Dashboards

Use graphs and charts to monitor your financial performance throughout the most important metrics like net profit on net sales, debt-to-equity and gross profit. You can likewise drill down to granular details and get in-depth insights for a more informed business decision. Dashboards also enable you to set goals and keep tab of progress, while allowing for your preferred metrics to be highlighted for at-a-glance visibility.

Mobile

Xero is has native apps for Android and iOS, allowing for seamless mobile accounting. With these apps, you can reconcile transactions, send invoices and create expense claims.

Whether at the office or on the go, you can access Xero’s interface and tools from any device.

Features of Zoho Books

Zoho Books is notable for its excellent timesheet-invoice-payment automation if you deal with billing clients by the hour. But the app has more features and processes that fit other business models, as well. Here are the key features to expect from Zoho Books.

Contact management

All your contacts are stored in and accessed from one place, making dealing with customers and suppliers convenient. Receivables and payables are likewise centralized and you can filter search to quickly find what you need. The module also features self-service portal for clients that want to browse through their historical transactions with you or examine quotes from you. They can also see their outstanding payments on the portal and pay through this interface.

Invoices

All your transactions are captured in one place, including invoices, credit notes and estimates. Invoicing can be linked to timesheet and online payment for faster processing. Likewise, estimates can be converted to invoice in one click. You also get alerted for collection dues and the app will even send scheduled email reminders to clients for due and late payments. A thank-you note is also sent once payment is made; thereby, freeing you up from the hassle of bugging clients for receivables.

Time-tracking and project management

If you bill by the hour and deal with client projects, this module fits your perfectly! This module features logging and tracking time, role-based access and multi-project support. You can also attach expenses to related invoices for reimbursement. Time-tracking gives you the option of recording daily or weekly time logs or, using the built-in timer, to clock your working hours. Managing multiple projects is also seamless; each project can be timed separately and linked to their respective invoices. With this module, you’ll be spending more time on the project that administering back-office tasks.

Reporting

Using powerful analytics, you can generate reports in seconds. Run reports to monitor your cash flow, account receivables and account payables or income vs. expense. The key metrics are displayed on the dashboard. You can also create profit and loss, balance sheet, trial balance, sales reports, sales tax reports and purchase reports to track your transactions in details or identify insights that are valuable for your business decisions.

Expenses

This allows you to organize your overheads to help you gain more control over cash leaks. You can break up expenses in this module and see your  tax deductibles clearly. Expenses can be categorized as travel expenses, software purchases, meals and lodgings, office supplies and others. Attaching receipts is likewise easy. Take a photo of the receipt from your phone and upload it to the app. Similarly, you are alerted of money owed to suppliers so you keep to the payment schedule and maintain a healthy credit rating.

Inventory management

Your inventory is easily manageable with this module, keeping you aware of stock levels with end-to-end tracking, from creating the item to stockouts. You can set alerts for reorder levels to keep the inventory at manageable levels. Purchase reorders with your preferred suppliers can also be automated. This module also handles sales orders, credit notes for returns and invoice delivery.

Automate banking

You can manage all your banking transactions in one place and never lose track of your money flows. Bank reconciliation is quick and easy with this module. Just link your and and credit card accounts to Zoho Books and the app sends you automated feeds on transactions based on your settings. Transactions are also categorized once they are fed into the app. It’s also simple to import bank statements using formats like CSV, TSV, OFX or QIF.

Collaboration

A Client Portal helps you share transactions, fast track approval process, capture feedback or allow your clients to send bulk payments using this self-service section. Role-based access restrict access to sensitive information, while giving you the flexibility to work closely with clients and your accountant through the cloud. The portal also alerts you in real time for client views, comments or payments.

Zoho Books inventory interface enables you to see all important details per transaction.

Honorable Mention: Intacct

Intacct is a cloud ERP system designed for small to mid-size businesses that are looking for more robust core accounting features. Companies that have outgrown QuickBooks or spreadsheets will find Intacct able to manage their transactions more efficiently, including order management, purchasing and collaboration platform. They’ll also like the integration capability of this software, including with powerful systems like Salesforce, Clarizen, Paychex and Development Sandbox. The following are the key features notable with this accounting software and deserve to be included in our top accounting list.

Accounts payable

It automates vendor management processes with point-and-click configuration to match your approval workflows. It also automate expense allocations on bill payments. Likewise, you can set internal controls that align with your business processes.

Accounts receivable

You can automate invoicing and payment processes to shorten the cash cycle. The software allows for sending invoices through email and supports payment options for clients. Also, you can generate recurring bills if you have a subscription model, or attach files to transactions for more accurate recordkeeping. Accounts receivable is likewise connected to the entire system for a consistent view of your finances. The accounts receivable is linked to your CRM for a uniform view of sales, quotes, orders and invoices. Moreover, it automatically posts order transactions to your general ledger and accounts receivable ledger for a more streamlined billing and accounting.

Cash management

You can track balances and transactions throughout your various accounts. The module provides a real-time view of all transactions across your checking and savings accounts, enabling you to monitor closely your cash flow. It can also automate reconciliations and provide you with flexibility in managing your cash.

General ledger

You can view your financial performance based on various combination of key metrics. Using dimensional values instead of account segments, the module captures the transactional, budgetary and operational context in your accounting. It also allows for quick multi-entry management, code-free customization and a rich multi-book functionality. Likewise, it enables you to close books in phases using a multi-ledger architecture to manage your time more efficiently.

Order management

Using point-and-click configuration, you can set up order processes based on your unique workflows and pricing terms. The module links to fulfillment, billing, revenue accounting, among others, greatly streamlining the order process. Furthermore, leveraging the pre-integrated Salesforce CRM connectors, you can share pricing details, order status and other transactional data without performing a double data entry.

Purchasing

The module allows you to tailor transaction and approval processes to bring about more efficiency and accuracy to your accounting. Using reporting tools, you can gain increased visibility on your budget vs. actuals, costs and across your entire procure-to-pay process. The module connects with accounts payable, cash management and inventory to give you a single financial data with no double-entry necessary.

Reporting and dashboards

Intacct’s dashboards provides granular visibility on key metrics that impact on your finances. It helps you monitor operational and financial costs and revenue streams. Overall, it simplifies your chart of accounts, while giving you flexibility to create reports that matter to your different audiences, such as, investors, executive groups, team leaders, and the different departments like sales, finances and marketing.

Category: B2B News

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