Xero vs FreeAgent - Comparison for UK businesses

When it comes to managing the financial aspects of your UK business, choosing the right accounting software is crucial. Two popular options in the market are Xero and FreeAgent, both offering cloud-based solutions tailored to meet the needs of small and medium-sized enterprises (SMEs).

In this article, we will compare Xero vs FreeAgent, helping you evaluate which option is better suited for your business requirements.

It's worth noting that Wise Business is an integration partner with both providers, this partnership empowers Wise Business to connect these two accounting solutions seamlessly, enabling businesses to transfer data effortlessly between them.

What is Xero?

Founded in 2006, Xero has become a leading cloud accounting software trusted by businesses worldwide. Its stellar reputation stems from its ability to effectively assist businesses in managing their financial aspects with ease.

With a whopping 3.7 million subscribers globally, Xero has made its mark in countries like New Zealand, Australia, and the UK. What sets Xero apart is its powerful online accounting software that seamlessly connects businesses with their numbers, banks, and advisors.

Xero is committed to customer satisfaction, as reflected in its impressive Trustpilot rating. With a solid 4.2 rating¹ and over 5400 reviews, it's clear that Xero has won the hearts of SMEs relying on its features and functionality.

Xero reviews - Main features

Xero has a number of helpful features, including invoicing, expense management, bank reconciliation, and financial reporting. These tools enable users to remain on top of their finances, make educated decisions, and confidently develop their UK businesses.

Here is a table outlining the primary features provided by Xero²:

Feature	Comment
Pay bills	Track and pay bills on time, and get an overview of accounts payable and cash flow.
Claim expenses	Easily capture costs for expense claims, reimbursement, and view spending using Xero's expense management tools.
Bank connections	Connect your bank account or Wise Business account to Xero and set up automatic transaction importation on a daily basis.
Accept payments	Accept online payments through credit cards, debit cards, or direct debit directly from Xero invoices, making it convenient for customers to pay and improving payment efficiency.
Track projects	Invoice, quote, and get paid for jobs while keeping track of profitability and costs using Xero's project and job tracker software.
Payroll	Manage basic pay records and process payroll for a small number of employees within Xero or integrate with a payroll app.
Bank reconciliation	Keep your account balances and financials up to date by easily matching transactions in your bank accounts with Xero's bank reconciliation software.
Online invoicing	Streamline your invoicing process with Xero's intuitive online invoicing software. Send invoices, automate reminders, and manage your invoicing efficiently from anywhere, anytime.
Reporting	Accounting reports that are accurate can help you keep track of your finances. And work in real-time with your adviser online.

💡 Read more about Xero Features:

• Check out this step-by-step guide for additional information on making invoices using Xero.
• If you want to manage your spending more effectively, Xero Expenses can assist.

Xero payroll

Managing payroll can be a complex and time-consuming task for small businesses. However, Xero offers a payroll feature that can greatly improve efficiency and help companies comply with HMRC regulations.

With Xero's online payroll software, you can easily pay your staff and automate tax, pay, and super calculations.

Automated online payroll: One of the key benefits of Xero's payroll feature is its automation. You can pay your employees in just a few clicks, and the payroll data automatically updates your accounts, saving you time and reducing the chance of errors. Xero handles tax, superannuation, and leave calculations automatically, ensuring accuracy and compliance. You also have the flexibility to set up pay calendars, tax rates, and pay rates according to your business's needs.

Employee self-service: Xero's payroll feature also includes Employee self-service functionality. By giving your employees limited access via the Xero Me mobile app or web platform, you can reduce payroll administration and save time. Employees can submit leave requests and timesheets for review and view their leave balances and payslips, all conveniently, through the Xero Me mobile app or web platform.

With Xero's payroll feature, small businesses can streamline their payroll processes, improve efficiency, and ensure compliance with HMRC regulations. The automation, flexibility, and employee self-service capabilities make it a valuable tool for simplifying payroll management and empowering both employers and employees.

When you combine the power of Xero and Wise Business, your company can pay employees and contractors all over the world, in multiple currencies with ease.

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multi-currency account 🌎

Xero pricing

When considering Xero as your accounting software, it's essential to understand its pricing structure. Xero offers different plans designed to meet the needs of businesses of varying sizes and requirements.

Here is a table comparing the different pricing plans offered by Xero³:

Plans and features	Monthly cost
Starter For sole traders, self-employed and new businesses that are getting started.	£14 per month
Standard Good for growing small businesses as it has more features and functionality.	£28 per month
Premium For established businesses with advanced needs and additional users.	£36 per month
Ultimate Good for larger companies and more complex small businesses.	£49 per month

Xero support

Having reliable support is crucial when using daily software like Xero. It ensures that you can quickly resolve any issues or get answers to your questions, enabling a smooth experience and efficient financial management.

Xero provides various channels for customer support, ensuring that help is available when needed. Here are the support options offered by Xero:

• Get Support: Xero offers an email support system where you can submit your queries and receive assistance from their support team. This allows for personalised responses tailored to your specific needs.
• Guides and Accounting glossary: Xero has an extensive collection of explanations of accounting terms for small business owners. You can explore the guides to find answers to common queries.
• Take a course: Xero provides a comprehensive learning platform, offering detailed courses, webinars and events. This resource hub is designed to help users navigate through various features and functionalities of the software.

Xero ensures that support is available during crucial times for businesses. The specific availability of support may vary based on your region, but Xero strives to offer assistance when it is most needed.

What is FreeAgent?

FreeAgent, launched in 2007, is a cloud-based accounting software that offers convenient browser access. It is equipped with mobile applications for both Apple and Android smartphones, similar to other leading accounting software available in the market.

With FreeAgent, users can enjoy various features typically expected from online accounting software. These features include sending quotes, invoices, and payment reminders. Additionally, it facilitates tracking mileage and expenses, project management, and the generation of timesheets.

FreeAgent is particularly popular among small businesses in the United Kingdom. It boasts a Trustpilot rating of 4.6 stars⁴ based on more than 10,000 user reviews.

FreeAgent review - Main features

Regarding reviewing FreeAgent and its primary features⁵, we can explore how this software provides a wide range of tools to manage your small business finances effectively.

FreeAgent ensures you stay on top of your financial responsibilities with its intuitive interface and robust functionalities. It offers a comprehensive solution to meet all your financial needs.

Feature	Comment
Estimates and Invoices	Easily generate and send professionally crafted quotes and invoices to your clients. Effectively monitor your payments and ensure prompt invoicing to maintain a steady cash flow.
Expenses	Bid farewell to the inconvenience of paper receipts. Capture a photo using your phone and upload it to FreeAgent. Your expenses will be systematically organised, simplifying the tax season process.
Time Tracking	Achieve precise time tracking with FreeAgent's built-in stopwatch or intelligent timesheets. Guarantee that every minute is accurately recorded and appropriately invoiced to your clients.
Dashboard	Stay in control of your cash flow through FreeAgent's user-friendly dashboard. Gain instant access to a real-time financial health overview and stay well-informed about upcoming tax deadlines.
Projects	FreeAgent provides a comprehensive overview of your business's financial performance, allowing you to monitor your project's progress effortlessly by tracking income, expenses, and profitability in a centralised platform.
Wise Business integration	FreeAgent seamlessly integrates with Wise Business, enabling you to make international payments effortlessly and conveniently.

FreeAgent payroll

If you find payroll and accounting tasks daunting, consider utilising FreeAgent as a user-friendly and straightforward solution to handle these essential activities.

FreeAgent encompasses various features, including payroll, which adhere to HMRC standards. Notably, it was honoured with the Small Business Accounting Software of the Year award at the 2018 Accountancy Excellence Awards.

With FreeAgent, you can use it independently or in conjunction with an accountant, benefiting from automatic tax reminders and forecasts. The platform enables you to generate monthly employee payslips and create P60s as required.

FreeAgent goes beyond the basics and offers valuable features for small businesses, amplified by its integration with Wise Business. By seamlessly merging the FreeAgent payroll feature with Wise Business, you can effortlessly and efficiently conduct international payments.

This integration proves particularly advantageous for companies with employees operating across different countries.

Here are some extra benefits of FreeAgent's payroll feature:

• Easy setup and user-friendly interface.
• Automated processes that save valuable time.
• Seamless integration with other FreeAgent functionalities, including expenses and invoicing.

By seamlessly combining the FreeAgent with Wise Business, you can make international payments with ease and efficiency. This integration is particularly valuable for companies with employees working across different countries.

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FreeAgent prices

FreeAgent offers flexible pricing options designed to cater to the specific needs of different entities. Whether you're a small business or a freelancer, FreeAgent provides various plans to accommodate your requirements effectively.

In addition, FreeAgent has established partnerships with NatWest, Royal Bank of Scotland, and Ulster Bank to provide users with a free account, further enhancing its value.

Let's delve into the pricing model and compare the available plans based on the entity type⁶.

Entity type	Plans available
Limited Company	Monthly Subscription: £29 per month Annual Subscription: £290 per year (save £58)
Partnerships & LLP	Monthly Subscription: £24 per month Annual Subscription: £240 per year (save £48)
Sole Trader	Monthly Subscription: £19 per month Annual Subscription: £190 per year (save £38)
Landlords	£10 per month per additional user

💡 Read more: FreeAgent vs Quickbooks: comparison

FreeAgent support

Support is crucial for daily-use software like FreeAgent since it can assist you in resolving any problems or queries you might encounter. You can require FreeAgent support for several reasons, including:

• Setting up your account and beginning the FreeAgent process.
• Changing to FreeAgent from another accounting program.
• Resolving any issues or faults, you come across.
• Being familiar with how to use FreeAgent's many features and functions.
• Using FreeAgent to file your taxes and year-end accounting.
• Getting suggestions and guidance on effectively managing your company's finances.

There are various methods to contact FreeAgent for assistance when you need it. Visit their Knowledge Base for articles, instructions, webinars, and videos on different FreeAgent-related subjects.

• Contact their support team via phone or email to receive assistance from their knowledgeable and amiable support accountants in the UK.
• Schedule a 20-minute call with their support staff to receive a customised tour of FreeAgent.

The support hours are Monday through Thursday from 9 a.m. to 5 p.m. and Friday from 9am to 4pm (UK time).

The calls are free from landlines and mobiles in the UK and recorded for security, monitoring, and training reasons.

Xero vs FreeAgent - final comparison

Here's a comparison table for the pricing and main features of Xero and FreeAgent:

Plans and Features	Xero	FreeAgent
Invoicing	✅	✅
Expense Tracking	✅	✅
Bank Connections	✅	✅
Accept Payments	✅	✅
Project Tracking	✅	✅
Payroll Management	✅	✅ (Limited company, Partnerships and Sole trader plans)
Bank Reconciliation	✅	✅
Multi-Currency	✅	✅
Mobile App	✅	✅
Reporting	✅	✅
Customer Support	Get Support, Guides, and Courses	Email/Help Desk, FAQs/Forum, Knowledge Base
UK Business Focus	✅	✅
Trustpilot Rating	4.2 out of 5 based on 5400+ reviews	4.6 out of 5 based on 10000+ reviews

Our Xero vs FreeAgent comparison is complete with this table. Both are popular cloud-based accounting software options for UK businesses.

Xero offers powerful features like invoicing, expense tracking, and payroll management. It has a Trustpilot rating of 4.3 and pricing plans starting from £14/month and integrates with Wise Business.

FreeAgent has features such as estimates, expense management, and project tracking. It integrates with Wise Business and has a Trustpilot rating of 4.5. Consider pricing, specific features, and user reviews when choosing between them.

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Sources:

1. Xero Reviews | Read Customer Service Reviews of www.xero.com
2. All Xero Features
3. Pricing Plans | Xero UK
4. Read Customer Service Reviews of www.freeagent.com
5. Small business accounting & bookkeeping software - FreeAgent
6. Simple pricing plans made for small businesses - FreeAgent

Sources last checked July 24, 2023