Xero vs QuickBooks vs FreeAgent: Which Accounting Software Should You Choose?

Overview of each platform

Xero is a New Zealand-founded platform popular globally, known for its clean interface and extensive app marketplace. QuickBooks Online is Intuit's cloud platform, strong in the US and growing in the UK. FreeAgent is UK-built specifically for freelancers and small businesses, now owned by NatWest.

All three are HMRC-recognised for Making Tax Digital and offer bank feeds, invoicing, and expense tracking. The differences lie in features, complexity, pricing, and target users.

Best for freelancers and sole traders

FreeAgent wins for simplicity. Built specifically for UK freelancers, it handles Self Assessment, calculates tax throughout the year, and explains accounting concepts in plain English. The interface is less cluttered than competitors.

FreeAgent is free for NatWest, RBS, and Mettle business account holders, making it incredibly cost-effective. For sole traders wanting simple, no-fuss accounting with built-in tax estimates, it is hard to beat.

• FreeAgent: Best for freelancers and sole traders
• Simple interface designed for non-accountants
• Real-time tax estimates throughout the year
• Free with NatWest/RBS/Mettle bank accounts
• Built specifically for UK tax system

Best for growing businesses

Xero excels for businesses expecting to scale. Its app marketplace includes hundreds of integrations for inventory, CRM, project management, and more. As needs grow, you can bolt on functionality without switching platforms.

Xero's multi-currency support is superior, making it ideal for businesses with international clients or suppliers. The reporting is more detailed than FreeAgent, though less intuitive for non-accountants.

• Xero: Best for scaling businesses
• Extensive app marketplace (800+ integrations)
• Superior multi-currency handling
• Powerful reporting and analytics
• Excellent accountant collaboration features

Best for retail and inventory

QuickBooks Online has stronger inventory management out of the box. If you sell physical products and need to track stock levels, cost of goods sold, and purchase orders, QuickBooks handles this better than Xero's basic inventory.

QuickBooks also integrates well with Square and other POS systems popular with retailers. For product-based businesses, it often requires fewer add-ons than Xero.

• QuickBooks: Best for product-based businesses
• Built-in inventory management
• Strong POS integrations
• Purchase order tracking included
• Good for businesses with physical stock

Pricing comparison

FreeAgent costs from GBP 14.50 per month but is free with certain bank accounts. Xero starts at GBP 15 per month (Starter, limited to 20 invoices) with most businesses needing Standard (GBP 33) or Premium (GBP 47). QuickBooks ranges from GBP 14 to GBP 35 per month for most small business plans.

Consider total cost including payroll add-ons, app subscriptions, and accountant access. Xero's accountant access is unlimited; QuickBooks charges extra for accountant users on some plans.

Accountant compatibility

Most UK accountants work with all three platforms, but preferences exist. Xero has the largest accountant partner network in the UK. QuickBooks has a strong following. FreeAgent is popular among accountants serving freelancers.

Ask your accountant which platform they prefer and whether they offer discounted subscriptions through their partnership. Many accountants can get you lower rates than direct subscriptions.

Mobile apps

All three offer mobile apps for iOS and Android. Xero's app handles invoicing and expenses well. QuickBooks has good receipt scanning. FreeAgent's app is simple and focused on core tasks.

For businesses where staff submit expenses on the go, consider dedicated expense apps like Dext or Expensify that integrate with all three platforms.

Making your decision

Choose FreeAgent if you are a freelancer or sole trader wanting simplicity and real-time tax estimates, especially if you bank with NatWest or RBS.

Choose Xero if you are a growing business needing integrations, multi-currency, or detailed reporting. It scales well and most accountants support it.

Choose QuickBooks if you sell physical products, need built-in inventory, or prefer Intuit's ecosystem.

Key takeaways

• FreeAgent is best for freelancers and sole traders seeking simplicity
• Xero is best for growing businesses needing integrations and scalability
• QuickBooks is best for product-based businesses with inventory
• All three are MTD-compliant and work with most accountants
• FreeAgent is free with NatWest/RBS/Mettle bank accounts
• Ask your accountant about partnership discounts
• Consider total cost including add-ons and integrations

How we can help you

We specialise in:

• Software selection advice
• Implementation and data migration
• Staff training and support
• Ongoing bookkeeping services
• App integration setup

Need help choosing accounting software? K&R Accountants are certified advisors for Xero, QuickBooks, and FreeAgent. Book a free consultation to find the right fit.