One of the best advances technology has for business is accounting software which helps manage finances more conveniently. Almost all businesses today have automated accounting software for more accurate management of finances. So even if you run a tiny company, investing in accounting software will benefit you.
There are several accounting software available for business owners. In addition, there are free trials left and right for you to experiment with. Among the software, three names always stand out—Xero, FreshBooks, and Sage Accounting. But which one should you invest in?
We will look at the different features of each accounting software to see which comes out on top of the Xero vs. Freshbooks vs. Sage Accounting software battle.
Features of Xero Software
The ideal cloud-based accounting software for small and expanding businesses is Xero. Its features include managing invoices, inventory, bank reconciliation, and many more. Using Xero has a lot of benefits you may take advantage of. Let's examine some of this accounting software's top attributes.
Invoicing Features
The traditional method of creating invoices is through Excel sheets and manual input of data. This can be a hassle when you have a number of clients and don’t have much time to dedicate to creating invoices. For small business owners, Xero accounting makes invoicing simpler.
- You don't have to create a new invoice each time one is required because recurring invoices can be set up.
- You can send bulk invoices simultaneously.
- You can send invoices through a mobile application.
- Allows third-party apps payment channel integrations and multi-currency invoices.
Billing Features
Of course, businesses also have dues to pay to their suppliers, especially for shipping and inventory. Xero helps you stay on top of dues and manage them. Here are some great features of Xero’s billing for business.
- Bills paid through Xero are automatically turned into paperless records, uploaded to the cloud, and sent to your email.
- With this feature, you can monitor your bills and send alerts when a payment is due soon.
- You can schedule simultaneous payments ahead, so you are never late with your obligations.
Xero has different plans for different needs. The most basic plan only costs $12 and is limited to 20 invoices per month which is perfect for micro businesses. Other plans will give unlimited use of the features and are better for medium to large companies.
Features of FreshBooks Software
Initially, FreshBooks was recommended for freelancers who wanted to track their incomes and expenses. But FreshBooks accounting software has launched different versions with additional features that can cater to small businesses.
Their new feature is the Accounting Partner Program which allows for a more cooperative approach between a hired accountant and business owner. Moreover, there are other features you can use, and here are some of them.
Time Tracking
Every worker expects to get paid for the time they use for work. However, how frequently do workers neglect to record their time in and time out? It is a common problem with manual recording. FreshBooks has a time tracking feature so you can log in and out easily and record time automatically.
If you are working on several projects for a client, you may even categorize the time you spent on each project. Moreover, the built-in time tracking feature allows you to track time when you work off location.
Project Management
Certain projects involve different people. FreshBooks allows multi-user access and lets everyone involved share essential documents needed in the project. This project management feature allows you to store all the files and documents in a single location and access them easily.
Accounting Reports
One reason business owners get accounting software is to keep track of their finances. Reports, however, are the most effective approach to see insights. FreshBooks can generate accounting reports from the transactions that happen in your business.
Some reports that the accounting software can generate are general ledger reports, profit and loss reports, sales reports, and expense reports. You can customize these reports by exporting them to an Excel sheet, or if you're happy with them, you can directly download them as PDF files.
Features of Sage Software
Sage 50 is the leading accounting software for business, and it's also most popular for professional accounts because it can handle accounting tasks for small to big businesses. Here are some of the impressive features of Sage 50 accounting software.
Cash Flow Management
As an owner, it's critical to understand how much money is coming into and going out of your company. Tracking your sales and expenses will let you know if you are making or losing money. Sage 50 can automate reports instantly, and you can even choose to generate monthly, quarterly, and yearly reports to assess the financial health of your business.
Furthermore, Sage 50 has built-in templates to choose from, so your reports are always suitable for presentation. This feature will save you numerous hours of compiling all your financial transactions, and you are less likely to make crucial errors.
Payroll Features
Not all accounting software has payroll features, and its addition to Sage 50 makes it stand out. Other accounting software have payroll features through integrated applications, but this also means a separate subscription you have to pay for.
If your business has many employees, getting accounting software with a payroll service is an advantage. However, preparing your employee's payroll is time-consuming, and mistakes can be costly.
Sage's payroll features can report taxes, create pay slips and send payments—all through the application. In addition, all payroll details are uploaded to the cloud, where you can store and access them anytime.
Inventory Management
Inventory management is one way to track your sales for businesses that sell products. Lack of stock may give your competitor an edge over you, and overstocking may affect your budget severely.
The inventory management feature of Sage 50 has real-time stock data, which tells you which products you should discontinue because they don't generate sales, and the products you should stock up on because they are profitable. You can use this information to guide your decisions regarding the products to invest in.
Xero vs. FreshBooks vs. Sage Accounting: Which is Best?
Now that we've seen the best features of each accounting software, which of these applications are best suited for your business? Each software has its advantages that will help you better manage your business.
For small businesses that are first-timers to accounting software, Xero is the best choice. Among the three, it is the most budget-friendly. Additionally, it has an intuitive user interface, so even beginners won't struggle with navigation. You can always upgrade your subscription if your company expands and requires more sophisticated accounting tools.
FreshBooks is best for self-employed individuals that cater to multiple clients. Time tracking is its greatest feature and it is especially useful when you need to be paid by the hour. It also helps you organize your projects because you can create different profiles for the different projects you are working on.
Lastly, we recommend Sage 50 for medium to large businesses. This accounting software has more advanced features that may be overwhelming for beginners. Consequently, it is preferable to utilize this software with the assistance of a qualified accountant. Moreover, the full package has payroll services, so it’s best suited for businesses with many employees.
Final Thoughts
Undeniably, accounting software takes off the tedious workload of managing your finances. Choosing the most appropriate accounting tool is crucial. To determine what works best for you, take the time to try each with the free trials available. We hope this comparison on Xero vs. FreshBooks vs. Sage gives you a clearer view of your choices.
If you need professional help regarding your business, Unloop’s services include tax management, payroll service, forecasting, and taxes. Visit Unloop today, and book a call with our experts and learn more about what we can do for your business.