Most freelancers and small business owners spend way more on accounting software than they need to — or use the wrong tool entirely. After testing six platforms with real invoice workflows and bank imports, here's the honest breakdown.
Who needs what
- Solo freelancer, simple invoicing: Wave (free) or FreshBooks ($17/month)
- Small business with employees: QuickBooks Simple Start ($30/month) or Xero
- Growing business, US-based: QuickBooks Online
- Growing business, international: Xero
Wave — Best free option
Wave is genuinely free for invoicing, accounting, and receipt scanning. There's no catch on those core features — they make money on payroll ($6/employee/month) and payment processing (2.9% + 30¢). For a freelancer or sole proprietor who just needs to track income and expenses, Wave handles everything. The interface is clean, bank connections work reliably.
FreshBooks — Best for service businesses
FreshBooks is designed specifically for service businesses that bill by the hour or project. Time tracking is built in (not an add-on). Retainer billing and project profitability tracking are first-class features. The invoicing experience is genuinely the best in this category — clients can pay directly from the invoice with one click.
Starts at $17/month (Lite plan, 5 clients). Most service businesses land on Plus ($30/month) for unlimited clients.
QuickBooks Online — Most powerful, most expensive
QuickBooks is the accounting standard for a reason — every accountant and bookkeeper knows it, it integrates with almost every other business tool, and the reporting is genuinely useful for growing businesses. Simple Start starts at $30/month. But payroll is extra ($45+/month base), and you'll want Plus ($90/month) for project tracking.
The downside: it's overkill for freelancers, and the interface has gotten more cluttered with each update. Worth it when you have an accountant who uses it.
Xero — Best for international teams
Xero's multi-currency support and international bank connections are genuinely better than QuickBooks for teams operating across borders. The interface is cleaner than QuickBooks. Starts at $20/month (Early plan, 20 invoices/month) — a real limitation for most businesses. Most teams need Growing ($47/month) for unlimited invoices.
The question to ask before choosing
Does your accountant use it? If yes, use what they use — the collaboration friction from using different tools costs more than any subscription price difference.