Top 5 Accounting Software Compared – FreshBooks, Quickbooks, Xero, Sage, and Wave

Holding on to your finances can be game-changing for your business’s success.

There are several accounting software that streamlines processes and takes care of all your business finances and taxes.

In this article, we’ve compared the top accounting software – FreshBooks, QuickBooks, Xero, Sage, and Wave, based on their features and ease of use.

But before we jump in, let’s get a brief overview of the software.

Overview of the Top Accounting Software

#1. FreshBooks

FreshBooks is a cloud-based accounting software allowing users to easily create and send professional invoices, track time and expenses, manage projects, and access financial reports.

The platform has more than 30 million users, including small-size enterprises and contractual agencies in industries ranging from finance, construction, IT, and marketing.

FreshBooks’ highly responsive mobile app lets you stay connected to your clients and team, even on the go. You can send invoices, track expenses, and check on projects all under your fingertips.

The platform also has an in-built app store that allows instant access to 100+ third-party apps to easily track and manage finances.

#2. QuickBooks

QuickBooks is an easy-to-use accounting software that streamlines and automates recurring tasks, such as invoicing, payroll management, tracking payments, etc.

The software is available in desktop and cloud-based versions, making it accessible from anywhere with an internet connection.

QuickBooks is our top choice for part-time freelancers and individual contractors.

Due to its widespread use in the US, G2 has recognized QuickBooks in the top 50 accounting and financial products.

Overall, the platform is a reliable and versatile accounting software that can help businesses manage their finances effectively.

#3. Xero

Xero is a pocket-friendly invoicing and accounting software that mainly caters to small businesses and individual bookkeepers. 

The software is strategically priced and offers a dedicated mobile app, allowing users to be confident with the numbers sitting anywhere around the world.

Xero’s mobile-friendly interface and feature-rich experience make it easy for users to stay on top of their finances. 

The software automates routine tasks, syncs perfectly with your bank, and offers real-time collaboration with employees or advisors. It’s an all-in-one platform to track finances.

What’s more, Xero integrates with over 1000+ third-party apps, providing a robust ecosystem to manage your finances.

#4. Sage

Sage is excellent accounting and business management software with a versatile product range. The platform is a perfect match for small and medium-sized businesses. And it offers diversified solutions for specific needs, such as:

✅ Medium-sized business

✅ Small-sized business

✅ Businesses related to construction and real-estate

✅ Accountants and bookkeepers

With Sage, you can choose the deployment model that best suits your needs. It offers both cloud-based and on-premise solutions.

#5. Wave

Wave is a popular financial management software for people just getting started with finance. The software offers a range of features, from which invoicing, accounting, and banking features are free to use.

Wave also provides tools for bank reconciliation and financial reporting, helping users monitor their cash flow and make informed financial decisions.

Moreover, you get access to a user-friendly dashboard from where you can smoothly track, monitor, and control your business transactions in a centralized manner.

Overall the software makes it effortless to create, customize, and share beautiful invoices. It also comes with in-built tools like an account and payroll calculator, invoice generator, and a knowledge center to help you understand the functioning quickly.

Now that you have the know-how of all software, let’s compare them on a wiser note.

Feature Comparison

After an all-nighter, we discovered some amazing yet standard features in all these accounting tools. 

However, each software has its known variation for each feature it inherits. Let’s look at them one by one.

Invoicing

FreshBooks 

FreshBooks’ built-in invoice generator helps you create professional-looking invoices in seconds. Moreover, you can use its white-label feature to customize the look and feel of your invoice as per your company branding.

The platform’s invoice feature integrates with multiple payment methods; like in the US, it accepts ACH, instantly allowing your clients to pay by their preferred method.

To get the most out of your invoices, FreshBooks allows you to send email reminders, charge late fees, or change currency and language to suit the multinational clientele.

The best part is, using the invoice generator, you can forecast upcoming workloads and income based on fixed pricing and previous workload.

QuickBooks

QuickBooks has a gallery of pre-built invoice templates leaving you to do the easy work – customize it as per your branding.

Additionally, you can add billable hours to your invoice using the built-in QuickBooks Time and Google calendar.

For example, if an invoice is generated regularly, you can set recurring invoices to auto-send every day, week, month, or year. 

Moreover, you can enable real-time push notifications to get notified every time someone views/pays the invoice.

Xero

Xero’s invoicing feature is quite similar to the other tools. The feature allows you to customize or white-label invoices, accept payments, set up reminders, and more.

However, it does similar things a little differently.

For example, you can add a ‘Pay Now’ button on online invoices. The software integrates with third-party apps to provide a hassle-free payment experience for customers.

Secondly, you can directly send the invoice from the Xero app. The app is efficient enough to allow you to create, customize, and send invoices on the go.

Sage

Sage invoicing integrates with other Sage accounting features, such as expense tracking and financial reporting, to provide a comprehensive view of your finances.

With Sage invoicing, you can create and send personalized invoices, receive payments online, and track invoice status in real time via simple dashboards.

You can even create and print delivery notes associated with each invoice with a click.

Wave

Wave’s invoicing feature accompanies everything that the other tools offer, but everything is free here.

You can customize invoices, collect payments, send reminders, and do much more without paying a dime.

Wave does offer advanced invoicing by crawling historical data and automatically generating customer personas on the go. 

You see, knowing your customer allows you to personalize your invoice and post due-date emails.

My Take: Best Accounting Software for Invoicing

In my opinion, FreshBooks is the best accounting software for invoicing. That’s because it offers a complete solution to your invoicing problem – you can add multiple payment methods, change currency, set up recurring emails with a click, and use white-label to personalize invoices before your hit send.

Bank Reconciliation and Expense Tracking

FreshBooks

With FreshBooks, you can easily connect your bank account or credit card to the platform, track your daily expenses, and support tax preparation and finance management.

The platform supports over 14,000+ financial institutions. Meaning your FreshBooks account will be updated daily with your most recent spending, so your business perfectly syncs with your bank balance.

You can also keep tabs on recurring expenses via color-coded visualizations.

Moreover, you can use FreshBooks’ automatic mobile receipt scanning to scan physical receipts and save them digitally.

QuickBooks

QuickBooks offers an excellent bank reconciliation and expense tracking mechanism. It connects to your bank accounts, credit cards, PayPal, Square, and many more finance-related platforms to cover every neck of the woods in your business finance.

Then, the software automatically imports and categorizes expenses based on your set format.

Unlike other tools on the list, QuickBooks’ built-in cash flow statement lets you visualize how much money you have so you can cover your bills.

Xero

Xero’s powerful APIs reconcile your bank transaction regularly. These APIs connect to the bank and sync your bank feed with its accounting software, thereby automating the secure flow of transactions.

Furthermore, you can create multiple feeds for different banks and view all of them at once under one dashboard. 

This feature also allows you to import 12 months of historical data and effortlessly create a summary of expenses and receipts, instantly available on the Xero mobile app.

Sage

Sage’s expense tracking and bank reconciliation feature seems quite advanced when compared to others on the list.

Firstly, it has an extensive open banking ecosystem that allows you to find and connect with your bank easily. Once you’ve made the connection, Sage Accounting automatically imports, categorizes, and reconciles transactions.

Moreover, you can easily track your cash flow via simple dashboards for individual purposes. 

You can also manage global accounts and see how exchange rates affect your cash flow in real-time.

The best part? Sage Accounting smartly learns from your category selections over time and automatically populates and routes transactions in Sage Accounting. 

Wave

The platform provides a free business banking account with a built-in bookkeeping feature called Wave Money.

You can simply create a free account and keep more of your money with lesser bank charges and instant withdrawals.

With Wave money, you can enjoy every benefit a traditional bank offers. Moreover, the software can ease your tax session by doing the math for you and treating your personal and business expenses as separate entities.

My Take: Best Accounting Software for Bank Reconciliation and Expense Tracking

In my opinion, QuickBooks is the best accounting software for bank reconciliation and expense tracking. That’s because it offers hassle-free connectivity to third-party banking apps and accounts. Plus, its built-in cash-flow dashboard provides a bird-eye view of your banking transaction and expenses incurred under one roof.

Dashboards and Reports

FreshBooks

FreshBooks offers ready-made financial dashboards and reports instantly, so you don’t miss important updates. You’re completely in control of how to present your data and share reports with interested parties.

The platform also lets you quickly create profit and loss reports, accounting reports, sales tax summary reports, etc.

QuickBooks

QuickBooks comes with easy-to-customize dashboards and reports that provide a holistic view of your cash flow under one roof.

You can use them to keep tabs on your account receivables, payables, and bad debts. Moreover, you can leverage QuickBooks Online Advanced and Excel to easily sync data and get access to real-time business data and custom insights.

Xero

Xero allows you to use IF statements and insert formulas to create interactive dashboards and reports. Unlike other tools, reports created with Xero are comprehensive and detailed, providing an at-a-glance summary of your business finances.

Using Xero’s mobile app, you can view and share various reports with your advisor without lifting your fingers. 

In terms of customization, you can use its intuitive drag-and-drop customizer to add, remove or reorder rows, columns, or tables.

Sage

Sage accounting provides real-time business insights via easy-to-understand reports and dashboards. 

Its highly visualized dashboards allow you to compare budgeted and actual trends. For a granular approach, you can create individual dashboards to view and monitor profit and loss statements, sales data, and more.

Moreover, the reports created in Sage can easily be shared with your in-house team or third-party accountant via team collaboration or simple Excel files.

Wave

Wave lets you get a complete picture of your business health via easy-to-understand dashboards. 

Its user-friendly dashboards and reports provide a bird-eye view of all the invoices, payments, payrolls, and more. Basically, you can oversee the business health at a glance and make better decisions.

My Take: Best Accounting Software for Dashboards and Reports

In my opinion, there’s no one winner when offering stunning dashboards and reports. That’s because FreshBooks, QuickBooks, and Sage offer attractive reporting.

FreshBooks: Offers diversified reporting for all categories of transactions.

QuickBooks: Has a dynamic and interactive dashboard that covers all the key details under one roof.

Sage: Allows you to create reports for only what’s important for you and keep them on the top of your list.

Accepting Payments

FreshBooks

With FreshBooks, you can accept online payments with a click. You can create post-checkout links on your website, social media, or anywhere else to let customers click and pay with ease.

Moreover, you can leverage FreshBooks Advance Payments to accept credit cards, set up recurring billing profiles, or create subscription-based client personas.

QuickBooks

Besides adding pay-enabled invoices, QuickBooks also accepts ACH and e-checks as a mode of payment.

The platform performs automatic bookkeeping and tracks invoices to tell you where you spent or received the money.

For an extra 1% fee, you can transfer payments to your bank account. Or, set up a recurring schedule to transfer payment automatically.

Xero

Xero uses Stripe and GoCardless to let users pay via debit/credit card, direct debit, Apple Pay, and more. It adds payment options directly to your online invoices, allowing you to get paid faster.

Moreover, unlike PDFs, online invoices are hard to tamper with, and the payment solutions that connect to Xero have robust security protections and strong encryption.

So you can ensure that your payments are being transferred rightly and anonymously.

Sage

Similar to Xero, it allows you to customize your payment requests and add a ‘Pay Now’ button integrated with the Stripe payment method.

For example, if someone pays via Stripe, it’s automatically matched to invoices and accounts in Sage Accounting in real time without you lifting a finger.

Sage also provides a simple dashboard that keeps track of the status of all your payments – outstanding, paid, viewed, and processed.

Wave

Wave online payments allow you to clear your invoice quickly – generally within 1-2 business days. 

Similar to QuickBooks, the platform accepts payment from credit cards, direct debits, and Apple Pay at a mere 1% commission per transaction.

The best part is you don’t need to save or collect payments or invoice receipts for tax season. Wave automatically categorizes your payments as and when they are made and provides you with all the transaction details once you sit for tax time.

My Take: Best Accounting Software for Accepting Payments

In my opinion, Sage is the best accounting software for accepting and tracking payments. That’s because it accepts one-click payments, categorizes the payments on its own, and provides a comprehensive outlook of your payment cycles via easy-to-read dashboards.

Wrapping Up

Evidently, all accounting software is best in its own way if we talk about features and functionality. However, each contributes to a specific use case.

To summarize the comparison, here’s a list of all accounting software and their best for use.

Remember, choose the accounting software according to your business needs. The best idea would be to get the free trial of all the tools mentioned, check them one by one, and see what suits you the best.

Next, check out the best expense tracking/management software for small and medium business owners.