Comparing The Software giants Xero and FreeAgent

Which Cloud – Xero vs FreeAgent

The cloud has revolutionised many aspects of the business world. One industry who has felt the effects and reaped the benefits is accountancy. The cloud offers multiple levels of functionality, increased automation and simplistic solutions, making it a useful well-rounded platform not just for accountants, but for all businesses.

NEXA Accountants offer services to a large variety of businesses, from sole traders to limited companies and charitable organisations. To ensure we can provide our ongoing expert solutions for our clients, we use two of the leading cloud accountancy platforms out there; Xero and FreeAgent.

Both of these platforms are a top tier choice for preparing and maintaining the books of a business, and provide a combination of affordability, simplicity and performance. But each platform does have a few differences which will impact its usefulness to a business. Below we will share some of the reasons why we use these platforms, which we hope will help you decide which platform would be most suitable for your business.

Comparing cloud softwares

Xero

The beauty of cloud is having the ability to access your accounts from anywhere in the world, Xero demonstrates this perfectly. With the reduced admin, consolidated management system and the ability to see a clear view of your business’ financial position at any time. It is easy to see why small and medium businesses around the globe use the mobile platform Xero provides.

Some of the top features provided by Xero

One of the top features of Xero is the simplicity and ease of use. Users are able to clearly view all of their business’ financial information. This platform enables its users to keep everything in one place, track invoices and expenses, upload receipts straight from your phone, pay bills and review cashflow, it is all there. Xero also has a built-in function for a direct link to your bank account, this tracks and uploads transactions as they happen, so your books are always up-to-date.

This is of course not the only beneficial feature of Xero:

  • Taxes have never been so straight forward. Xero prepares the VAT return, and ensures you don’t receive late penalties by its notification timeline.
  • The payroll management is performed on HMRC recognised software.
  • You have the option to use Xero’s built in template application, this will ensure your business is generating professional quotes and invoices.
  • Business expenses can be easily tracked, claimed and approved allowing you to streamline another area of your business.
  • The Smartlist feature provides you with a full history of your interactions with individual clients. Easily view contact details, sales, emails, invoices and payments all in one location.
  • Analytics, data and reports with Xero project tracking. Track time and costs, view estimates and quotes, keep on top of project profitability, are some of the features that make Xero an ideal choice for growing businesses.
  • Xero also offer an extremely useful app allowing for easy use on the go. The app also connects to a huge amount of other apps, letting you link to payroll applications, stock applications, client management applications, and the list goes on.

 

FreeAgent

As a small business owner both Xero and FreeAgent are great options for your cloud based accounting. But FreeAgent might just top the mark for those who are sole-traders, start-ups and contractors. NEXA Accountants use this particular platform for self-employed clients for a multitude of reasons, with the clear view it provides of accounts and ease of access making it the ideal fit for freelancers.

The top features provided by FreeAgent

Send out your invoices online and set up automatic payment reminders for your clients. You can also ensure you get paid faster by offering online invoice payments.

  • Easily track the costs your business incurs and save yourself valuable time by recording expenses on the go.
  • Use the built in template generator to draw up clear, professional invoices and quotes.
  • Keep an informed view of all your business’ projects with the ability to view income, expenses and profitability with Free Agent’s project management software.
  • FreeAgent offer a fully integrated, HMRC recognised payroll software. View, edit and print payslips and P60’s and not worry about meeting your business’ ‘making tax digital’ requirements.
  • Just like Xero, FreeAgent offers an incredibly useful mobile app, allowing you to keep track off your accounts on the go. Handle all your business admin right though your phone and activate the business reminders to notify you of any upcoming deadlines.

How do they compare?

As can be seen from the listed top features, these two cloud platforms offer a lot of the same things. Both offer on the go access, both have mobile applications allowing access to the platform wherever you may be. Each platform lets you generate quotes and invoices, receive payment online and streamline the admin aspects of your business.

Depending on the business you run the differing features provided by each platform may be more suitable. Xero offers features that would be more suitable to a small or medium business, such as the in built AI technology which tracks the input, distribution and use of transactions and notes. The AI technology will then offer up reminders which can be set the next time a similar transaction occurs, these ‘rules’ can also be set manually. After some use the AI will then start to automate many of the functions you carry out on a regular basis.

The various reporting tools and report generator offered by Xero ensure thorough management of your business. The reports generated by Xero allow you to see a clear view of your business’ financial position, make informed decisions and create better forecasts. Overall this one feature is a business owner’s most useful tool.

FreeAgent differs, as a simpler, more straightforward platform it is ideal for start-ups, contractors and freelancers. Your business may not need all the demanding ‘bells and whistles’ features provided by Xero. You may require something clear, simple to use and most importantly, affordable, that doesn’t lack any of the features you need to run your business effectively.

FreeAgent lets you take control of your finances, automate tasks, track invoices and expenses, and all whilst on the go. The features provided by FreeAgent are more than enough to run a small business successfully and will help minimise admin time and make the most of what really matters – running and building your business.

So which one is best?

This all comes down to you and your business. It all depends on what you want to gain from your cloud accounting software and if they can perform to the ability you require. Both simplify your accounts and offer more accessibility, so it will boil down to individual features that win either cloud for you.

For small to medium growing businesses, the features offered by Xero will help meet the heavier demands you may have for your accounting. Whereas FreeAgent is more streamline, simple and the fewer demanding features may be all you need as a small company.

At NEXA we use both of these platforms because the features they offer work best for our clients. As accountants we know the in’s and out’s of these platforms and are here to answer any of your questions. Contact us using the details provided below to see how we can provide an answer for your accounting needs.