Xero vs FreshBooks vs Sage: Which Has the Edge?

With some of the best accounting features we’ve reviewed and a wide range of useful integrations, our research suggests Xero is a better accounting software than FreshBooks and Sage. The tool includes a user-friendly budget tracker on each of its tiers too, making it especially valuable for smaller businesses watching their bottom line.

FreshBooks and Sage are still solid software options though. In fact, FreshBooks will be a better choice for retail and hospitality businesses due to its top-tier stock management toolkit and ecommerce add-ons. Alternatively, with unique cashflow features, consistently low prices, and generous client limits, Sage is the safest bet for the most cost-conscious businesses — as long as they’re able to do without project accounting and document scanning tools.

There’s a lot to iron out when it comes to these providers, so scroll down to see how they compare on accounting features, price, support options, and more.

In a pinch? You can cut through the noise and compare the best deals instantly with our specialized, comparison tool.

In this guide:

• Xero vs FreshBooks vs Sage: Head to Head
• Best Value: Sage
• Best for Accounting Features: Xero
• Best for Help & Support: Sage
• Best for Invoicing: FreshBooks
• Best for Integrations: Xero
• How Do Xero, FreshBooks & Sage Compare With Other Software?
• Our Methodology
• Verdict: Which Accounting Software is the Best?
• Xero vs FreshBooks vs Sage: FAQs

We’re committed to making accurate verdicts at Tech.co, so when comparing accounting software our research team measures a number of metrics including ease of use, advanced features, and support tools. Jump to our methodology section to learn more about our thorough and independent research process.

Xero vs FreshBooks vs Sage: Head to Head

Xero is a better solution than FreshBooks and Sage because of the strength of its overall feature offering — including its handy budget manager, decent value for money and its wide variety of integrations. In fact, according to our research, Xero is the best accounting software for small businesses and the second to best overall, making it a sturdy option for businesses of any size.

If you work in retail or hospitality, however, our research suggests FreshBooks will take the edge. This is because its powerful inventory management and time-tracking tools are available on all of its tiers, and, depending on the deal, its entry price is lower than Xero and Sage. FreshBooks is our number-one choice for online stores too, but due to its lack of EPOS integrations, it won’t be a good fit for every brick-and-mortar store.

Unfortunately, both Xero and FreshBooks offer pretty stringent client limits. So, if you collaborate with a high number of customers, Sage’s generous limits will be better for you. Sage’s unique cash-flow projection tool makes financial planning a whizz too. This, combined with its affordable monthly plans, make the software best suited to cost-conscious businesses that are able to get by without advanced accountancy functions.

The right accounting software for you will depend on a multitude of factors though, so scroll down to see how Xero, FreshBooks, and Sage compare across specific categories.

Best Value: Sage

With an impressive value score of 4.3/5 — due to its super reasonable entry price of $12 per month and affordable mid-range and premium tiers — Sage offers consistently better value than Xero and FreshBooks. This makes it the best option for businesses looking to keep expenses low year-round.

With a value score of 3.5/5 and a comparatively steeper starting price of $15 per month, Xero’s value offering is slightly less attractive than Sage. However, with premium accounting features like recurring bills and expense tracking available on all of its paid tiers, Xero is still a safe bet for businesses with a keen eye on their bottom line, and offers a powerful system in return.

Check out our guide to the best expense management software to learn more

FreshBooks software typically starts at $17 a month ($5 per month more than Sage, $2 more than Xero) however the provider does offer frequent seasonal deals, including its current 50% off offer which reduces its entry price to an incredibly low $9.50 per month. In fact, with advanced capabilities like inventory management available on FreshBooks’ lowest tier, the value of the accounting tool is unmatched when the discount is applied.

To see how the provider’s main plans weigh up, check out our comparative table below:

If you’re looking to unlock advanced accountancy features, FreshBooks also offers a Premium plan, at $60/month$30/month, with competitive accounts payable and project tools, and a custom-priced Select tier for businesses with complex needs.

Xero offers a premium Established plan too for $80 per month. This package offers just about every accounting feature under the sun, including multi-currency record payments, employee labor calculations, and custom reporting tools.

You can read a full breakdown of Xero’s pricing model here.

Xero vs FreshBooks vs Sage: Which has the best free trial?

While none of these software solutions offer free versions, Xero FreshBooks and Sage let users test out their products for 30 days, free of charge. Xero offers the strongest free trial, unlocking its full suite of features and 24/7 online support channels to users who sign up.

FreshBooks and Sage’s free trial also offers useful accountancy functions like invoice creation and payment tools, bank account integrations, and tax summaries, so while they’re less versatile than Xero’s, both give businesses a great taste of the software.

Best for Accounting Features: Xero

When it comes to features, Xero trumps FreshBooks and Sage — offering the most varied toolkit of any other accounting software we’ve researched. Xero particularly shines when it comes to bookkeeping, accounts payable, accounts received, and financial reporting features, with the service receiving full marks of 5/5 across all these categories, in our testing.

FreshBooks offers a decent suite of features too, especially for customer-serving businesses like stores and restaurants. For example, even FreshBook’s cheapest plan, Lite, has stock control, advanced invoicing, and time-tracking tools, making it a great shout for smaller businesses managing multiple projects at once.

If financial management is your top priority, you’re better off bypassing FreshBooks and Sage completely. FreshBooks completely lacks budget and forecasting tools, and Sage only offers cashflow projection options on its pricier, Standard tier. Moreover, unlike Xero and FreshBooks, Sage completely lacks project accounting tools like time tracking, project cost calculations, and labor cost calculations, making it the least versatile solution out of the three.

If you’re just looking to carry out basic accounting, financial reporting, and bookkeeping functions at a good price, however, Sage will still be up to the task.

Best for Help & Support: Sage

Sage offers better customer support options than Xero and FreshBooks, with live chat options available as well as a ‘Sage Univerity’ feature that gives users access to on-demand learning and instructor-led classes.

However, Sage has only been able to secure a lackluster research score of 2.9/5 for its help tools, because it lacks round-the-clock support and phone and email channels. In comparison, Xero and FreshBooks both offer specialist knowledge centers, but their support offering is even worse than Sage’s, with both solutions foregoing live chat and phone options, and FreshBooks lacking 24/7 support and a community forum.

Basically, if you often find yourself in need of support none of these options will really cut the mustard — we would recommend going with QuickBooks instead.

Best for Online Stores: FreshBooks

While FreshBook’s total feature offering falls short of our frontrunner, Xero, it’s the best accounting software for online businesses because of seamless integrations with major website builders like Shopify, BigCommerce, and Squarespace. Unlike Xero and Sage, FreshBooks also offers robust inventory management tools on its lowest tier, which suggests the software will be especially useful to online retail stores and food delivery businesses.

Best for Integrations: Xero

If you’re looking to combine your product with other software, Xero will hands down be the best option. Thanks to its expansive app store, which is home to over 1,000 add-ons, users can choose from a range of integrations from CRM solutions like HubSpot to payment services like Stripe. What’s more, unlike FreshBooks and Sage, Xero can integrate with leading EPOS systems too including Square, Vend, and Revel — making the tool perfectly suited to brick-and-mortar stores with existing point-of-sale software.

FreshBooks also boasts its very own app store with over 100 options available, including useful ecommerce tools and accounting add-ons. But while FreshBooks integrations are stronger than Sage, they still pale in comparison to Xero’s.

How Do Xero, FreshBooks & Sage Compare With Other Software?

While Xero can’t be beaten on features, QuickBooks is the best accounting software we’ve reviewed overall, with an impressive research score of 4.7/5 thanks to its first-class financial reporting and accounts tools, flawless scanning capabilities, and reasonable price tag.

Wave and Zoho Books are some other promising alternatives that both secured an overall score of 4/5, with Wave giving users access to a variety of solid accounting features for free, and Zoho Books offering flawless automation options and generous invoice limits for as little as $15 per month.

The market is packed with credible accounting software services, however, so check out our table below to see how they compare in full:

Our Methodology

When ranking and reviewing different accounting software, our in-house team of experts zeroed in on nine specific metrics. These categories of interest included factors like price, software functionality, advanced features, bookkeeping, financial reporting, and customer support tools, to name a few.

After researching each product extensively, we awarded each piece of software a five-star ranking for each category. These rankings, which include examples like 4.5/5 for price and 3/8 for bookkeeping tools, help us to determine which providers are stronger overall, and which are best suited to different types of businesses.

A lot more goes into how we make our verdicts at Tech.co. So, to learn more about how we review accounting software and other types of tech products, check out our full research process here.

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