QuickBooks Online, Xero, FreshBooks and Wave cover most small business accounting needs, but they are designed for different businesses. QuickBooks is the US market leader with the deepest features. Xero is the clean, multi-user favourite in the UK, Australia and New Zealand. FreshBooks is built for freelancers and service firms. Wave is free for simple books in the US and Canada.
Your country, your accountant and how you bill clients matter more than feature lists. This guide compares all four and offers a quick way to choose.
The bottom line
Choose QuickBooks Online if you are in the US with staff, inventory or an accountant who uses it. Choose Xero for multi-user teams and international businesses. Choose FreshBooks if you bill clients for time and projects. Choose Wave if you are a US or Canadian sole trader with simple books and a tight budget.
The contenders
- 1
Best for US businessesQuickBooks Online8.5Editorial score 8.5 out of 10 - 2
Best for growing and international teamsXero8.5Editorial score 8.5 out of 10 - 3
Best for freelancers and servicesFreshBooks8.1Editorial score 8.1 out of 10 - 4
Best free optionWave7.7Editorial score 7.7 out of 10
Scores are editorial assessments based on research. Prices are indicative.
QuickBooks Online
ResearchedDeepest features, the largest accountant network and integrated payroll.
QuickBooks Online covers invoicing, expenses, bank reconciliation, reporting and, on higher tiers, project profitability and inventory. Its biggest advantage in the US is ubiquity: a large share of accountants and bookkeepers work in it daily, and a big app ecosystem connects to it.
Ideal for: US businesses with staff, inventory or complex reporting.
Watch out for: Users capped by tier; prices rise quickly.
Pros
- Widely supported by accountants
- Comprehensive features and reports
- Large app ecosystem
Cons
- Higher cost than some competitors
- User limits on lower tiers
Xero
ResearchedUnlimited users, clean reconciliation and multi-currency on higher plans.
Xero is a cloud-first accounting platform popular in the UK, Australia and New Zealand and increasingly in the US. Unlimited users on all plans, a tidy reconciliation experience and a large app marketplace make it a favourite of many accountants and growing teams.
Ideal for: UK, Australian, NZ and international businesses.
Watch out for: Starter plan limits invoices and bills.
Pros
- Unlimited users on every plan
- Clean reconciliation workflow
- Strong app marketplace
Cons
- Entry plan transaction limits
- Support is mainly online
FreshBooks
ResearchedInvoicing, time tracking and client payments at the centre.
FreshBooks began as an invoicing tool and still excels at it: polished invoices, time tracking, expenses and client retainers. It has grown into full double-entry accounting suited to freelancers, consultants and small agencies.
Ideal for: Consultants, agencies and service businesses.
Watch out for: Extra team members cost more; no inventory.
Pros
- Excellent invoicing and time tracking
- Very easy to learn
- Client portal and retainers
Cons
- Client limits on lower plans
- Fewer advanced accounting features
Wave
ResearchedFree invoicing and accounting for simple businesses.
Wave offers free invoicing and bookkeeping for small businesses in North America, earning money from payment processing, payroll and a Pro plan. It is simple to use and covers the basics well, but it lacks inventory, projects and the depth growing businesses eventually need.
Ideal for: US and Canadian sole traders.
Watch out for: Limited integrations and support.
Pros
- Free core accounting and invoicing
- Simple, friendly interface
- Unlimited invoices
Cons
- Limited integrations
- No inventory or projects
Comparison table
| Tool | Best for | Score | From (indicative) | Free plan |
|---|---|---|---|---|
| QuickBooks Online | Best for US businesses | 8.5 | From around $30–38 / month (Simple Start) | No |
| Xero | Best for growing and international teams | 8.5 | From around $20–29 / month | No |
| FreshBooks | Best for freelancers and services | 8.1 | From around $19–23 / month | No |
| Wave | Best free option | 7.7 | Free; Pro around $16 / month | Yes |
Feature matrix
| Feature | QuickBooks Online | Xero | FreshBooks | Wave |
|---|---|---|---|---|
| Starting price | ~ $30–38 / month | ~ $20–29 / month | ~ $19–23 / month | Free (Pro ~ $16) |
| Users included | 1 to 25 by tier | Unlimited | 1 (+ ~ $11 / extra) | Limited |
| Inventory | Plus / Advanced | Basic tracked inventory | No | No |
| Time tracking | Yes | Via projects / apps | Yes, core | No |
| Multi-currency | Plus / Advanced | Premium | Yes | Limited |
| Payroll | QuickBooks Payroll | Via partners (region) | Via Gusto (US) | Wave Payroll (selected regions) |
| Best regions | US, UK, CA, AU | UK, AU, NZ, global | US, CA, global | US, Canada |
| App ecosystem | Very large | Very large | Moderate | Limited |
Based on vendor documentation and public plan pages; features change often, so confirm on the plan you intend to buy.
Choose by business type
- Sole trader, simple books, US/Canada → Wave
- Freelancer or agency billing time → FreshBooks
- Product business with inventory in the US → QuickBooks Online Plus
- Multi-user team or international business → Xero
Ask your accountant first
Your accountant's preferred platform can save you money at year end because they work faster in tools they know. Many US accountants prefer QuickBooks; many in the UK, Australia and New Zealand prefer Xero. Both offer free accountant access.
Watch the limits
Entry tiers can limit users, invoices, bills or features such as multi-currency and inventory. Map your monthly invoices and bills, users and currencies before choosing a tier.
How we chose
- We compared the four accounting tools small businesses shortlist most often, using vendor documentation, public plan pages, trust pages and our full reviews of each product.
- Scores are the same weighted scores shown on each review; the overall score is calculated from six criteria and is never typed in by hand. Affiliate relationships have no influence on scores or order.
- We compared user limits, regional tax support, invoicing, inventory, payroll options and accountant ecosystems.
- Matrix entries describe typical plans as of the update date. Features and limits change frequently — confirm details on the exact plan you intend to buy.
Read our full scoring methodology →
Check bank feeds
Confirm your banks connect reliably — reconciliation depends on it.
Price the right tier
Choose the tier that covers users, invoices and currencies you need in a year.
Plan the switch date
Change systems at a month, quarter or year end to keep reporting clean.
Consider payments
Online payment options and fees affect cash flow — compare them.
See every option we rank in Accounting Software.
Buying checklist
Before you commit, confirm each of these on the exact plan you will buy:
- Supported bank feeds for your accounts
- Invoicing with online payments
- Sales tax / VAT handling for your regions
- Accountant or bookkeeper access
- Reports: P&L, balance sheet, cash flow
Avoid these mistakes: Choosing software your accountant does not support. Ignoring local tax support — not every tool files sales tax or VAT in every country. Mixing personal and business transactions in one bank feed.
Frequently asked questions
Which is better, QuickBooks or Xero?
QuickBooks is often better for US businesses and accountants; Xero for multi-user teams and international businesses.
Is Wave good enough for a small business?
For simple books in the US or Canada, yes. Growing businesses usually move to QuickBooks or Xero.
Is FreshBooks full accounting software?
Yes, with double-entry accounting, but it is optimised for invoicing and lacks inventory.
Which is cheapest?
Wave is free. Among paid tools, FreshBooks and Xero start lower than QuickBooks.
Do they all support VAT and sales tax?
Yes, with regional differences. Check your country's tax features.
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