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Cloud Accounting Comparison – Recommendations and Pricing

This is what you’ve been waiting for, hasn’t it? After going through 16 different comparison points, here’s my cloud accounting recommendations, after conducting my online accounting software reviews.


Cloud Accounting Recommendations

First, let’s get pricing out of the way.

Pricing is important, but I’d argue that it should be a minor decision factor in why you’re choosing a particular software, at least for the software discussed in this review. If you find that more expensive software has the features you like, then it’s probably software that will save you time and headaches, which will be worth the money. If you don’t see any benefit in the additional features of the more expensive software, than the less expensive software is probably a better fit, since less features usually means it’ll be easier to use.

The pricing is laid out above, but pricing is always changing, so feel free to use the links below to double check. All the products offer a free trial, so I’d highly recommend trying them out at that low, low price. None of them require a credit card to try either, so there’s not much harm in trying.


Current Xero pricing. In reality you’ll be spending at least $29 a month for the Medium package, as the Small package is very small. If you need multi-currency, you’ll be paying $39 a month for the Large package.

QuickBooks Online US

Current QuickBooks pricing. The realistic price point is $26.95 a month, but you should really go to their website to check out the features that are included at each price point.


Current Kashoo pricing. You’ll either pay $15 a month or $144 for the year.


The majority of Wave is free, but you do pay for payroll or to use their payment processing services. Here’s the current Wave Payroll pricing.


Current FreeAgent pricing. You’ll either pay $20 a month or $200 for the year.


Current FreshBooks pricing. You’ll realistically be paying at least $19.95 a month, and will fall into more expensive plans if you have many clients or have many users that you need to access FreshBooks as well.

My Cloud Accounting Recommendations

To be clear from the start, I’m not going to declare any one software the winner or “the one” to use. Each software has its pros and cons and each business is unique, which means that some software is better suited to certain types of business than others.

Now the term “Accounting software” is being used quite loosely by marketing departments, so it can be hard to nail down what exactly accounting software can and should do. I’m drawing a line in the sand and say that accounting software must at least have a few capabilities in order to be called so.

Out of the software reviewed, Xero, QuickBooks Online, and Kashoo are the only cloud accounting products that I’d recommend as having the basics to be fully functional accounting software. This means they have the built-in functionality for an accounting professional (accountant or bookkeeper) to use for a small business’ day-to-day and year-end tasks. It also means that the data can be used as-is within the accounting software and don’t need to be manipulated, adjusted, or corrected outside of the software.

Although FreeAgent and Wave were very close to having the basics to be fully functional accounting software, there are certain limitations in them that an accounting professional, without some training on the software, would find difficult to accommodate.

Accounting Professionals vs. Small Business Users

Accounting software needs to be used by two different groups: Accounting professionals and small business users (i.e the owners and staff of small businesses).

In general, accounting professionals want more functionality and are willing to sacrifice interface, looks, and simplicity to get it. Small business users love functionality as well, but want things to be easier and less complicated. As accounting is not the primary focus of small business users, they’re less willing to spend the time to figure out how to do their accounting using the software.

So there’s this trade off between functionality and ease of use that accounting software has to contend with. Complexity is needed to handle the diverse needs of small businesses whereas simplicity is needed to allow the user to quickly and easily do what they need to do.

If you’re a small business user working with the more complex software (like Xero and QuickBooks Online), one thing to remember is that you don’t need to learn how to do absolutely everything that the software does, you just need to learn the functions that are relevant to you. You may need to work with an accounting professional to handle the more complex things.

On the flip side, if you’re a small business user working with non-fully functional accounting software, you may find yourself needing to work with an accounting professional, as may need to make some adjustments to the numbers provided by the software (since they can’t handle all types of accounting transactions).

Fully Functional Accounting Software

To better understand the capabilities of the various software, I’ll be comparing them to vehicles. Some vehicles can get you from point A to B in almost all situations (like a 4 wheel drive SUV on a long road trip through a snow storm), whereas others only work ins specific situations (like a motorcycle for a short single passenger trip to work on a sunny day).

Xero and QuickBooks Online are the software that are the most like luxury vehicles. They have advanced features, such as built-in navigation, bluetooth hands-free connectivity, four wheel drive, high top speeds, and nice stereo systems. For some people, one or many of these features will be necessities, and for others, nice luxuries. It may be relatively simple to get in and start driving, but with all those features, there’s a higher learning curve and price.

So Xero and QuickBooks Online are clearly the most advanced and complex overall, although they are definitely bested in certain areas. It’ll certainly take you a few hours to really start using the software, despite either company’s claims that their software is easy to use, beautiful, or otherwise.

Both Xero and QuickBooks Online are more focused on accounting professionals than the other software. While other software do have programs and training for accounting professionals, you can tell that one of their main strategies is to get accounting professionals on board in order to get the small business users. This is not to say they don’t cater to small business users, but rather that they have to design the software in a certain way to attract accounting professionals (which can have the effect of detracting small business users).

Kashoo is like a bare bones hatchback. It’s relatively cheap, efficient, and with ease can get you from point A to B. With it’s hatchback and seats that fold every which way, it’s extremely versatile for it’s size. There’s no AC, no cruise control, no built-in navigation system, no fancy stereo system. It works great, but under specific situations, like driving through the country side in a heat wave, it may not be the most pleasant ride.

Kashoo is kind of in-between software in that it has both the simplicity of use that small business users like while at the same time has the plumbing underneath to satisfy the primary needs of accounting professionals.

So, Kashoo has the basics downs, but it’s in the more unique or advanced needs where Kashoo may not be the best fit. For example, if you have complex inventory needs and want that inventory to run through Kashoo, you’d be out of luck. You’re much better off dealing with Xero and QuickBooks (who can’t handle complex inventory either, but do have integrations that would allow for this).

Xero vs QuickBooks

The competition between Xero and QuickBooks is not too disimilar to where Android and iOS (iPhone) were a few years back, when Android had a tiny portion of the smartphone market share in comparison to iOS’ complete control.

So, Xero is the up and comer. They’re less entrenched in their ways and more nimble. Part of this is because QuickBooks Online’s code base is using older technology. The other part is probably because they are bigger with more staff and areas of focus.

Xero seems to be more open and responsive to feedback. For example, you’ll see some blog posts and comments written and responded to by the CEO and top level senior members.

QuickBooks Online is the established player with the largest user base. QuickBooks Online’s dominance is also probably a leading cause of its inertia on certain things. As much as it has a user base that wants a multitude of new features, it also has a user base that doesn’t want things to change. QuickBooks Online has more to lose and thus more to protect. You can witness this in how they limit who can integrate with them. They’re also more closed in working with developers.

QuickBooks Online, like iOS, is a more controlled environment, and if you’re in the QuickBooks Online universe and are willing to stick with them for all your additional functionality, such as payroll or payment processing, the pieces generally all work well together.

Xero, like Android, is more and more becoming the place where the latest features and advances come to first. There’s more of an open, collaborative spirit to Xero. A lot of Xero’s power comes from its ability to be modified and integrated with. This can also have some negative side effects, in that the options can be both overwhelming and uncertain at the same time. While Xero itself is stable, the same is not necessarily true for all of Xero’s integrations.

What Ecosystem Are You Investing In?

The big question, is what ecosystem are you buying into when you use the software? Are your business needs going to change in the upcoming year or two, or are they going to be pretty much the same? Is there anything you want the software to do that it can’t currently do today but may be able to do in the future?

I use both Android and iOS products. I’ve found that Android  is more open, flexible, configurable, and complex. iOS on the other hand, is more closed, controlled, has less options, and is simpler.

If iOS has the functionality you need, the experience is usually smooth and works out well. If it doesn’t, you’re simply out of luck. Hacks are not encouraged and are shut down. Their’s usually a way to do something with Android. It’s not always the prettiest or most seamless solution, but at least there’s a solution. And these are generalizations. There’s some things on iOS that aren’t smooth at all in comparison to Android. And whereas iOS beats Android with a bigger, more polished app store, Xero actually has the bigger more polished app store in comparison to QuickBooks Online.

A question you may want to ask yourself is how were things looking between Android and iOS a few years ago vs. how they look today? I’m not saying that QuickBooks Online and Xero will follow the same path as Android and iOS, but that there are a lot of similarities to how it was between those Android and iOS a few years ago.

Who’s Better At What?

Xero is the best software for automation, both because of it’s built-in features as well as because of its integrations. In some scenarios QuickBooks Online may best it, but overall, Xero will usually be the best choice for automation purposes.

If you’re looking to bill out your clients based on expenses incurred or time spent, QuickBooks Online is clearly better than Xero, as Xero has no built-in capability to do those things (not taking any integrations into consideration).

While Xero is coming along with its local tax reporting (like 1099 forms) and payroll (through integrations), QuickBooks Online provides the best functionality and user experience in these areas.

QuickBooks Online, like Apple, becomes more powerful the more of its products and services you use. For example, if you’re using QuickBooks Online, it’s payroll, and it’s merchant services, you’ll find QuickBooks Online to be so much more valuable then if you only used QuickBooks Online for some income and expense data entry. And like Apple, the more you’ve invested into the QuickBooks Online ecosystem, the harder you’re going to find it to leave, because your QuickBooks payroll and merchant services aren’t going to be integrated into a competing accounting software package any time soon.


If you’re a company with under 100 transactions a month that needs something simple that you can learn quickly, Kashoo’s a great choice. It doesn’t have some of the advanced functionality that QuickBooks or Xero has, but it’s still accounting professional friendly.

And if you want accounting software for your iPad, there is not better choice than Kashoo. It’s actually the only real accounting software application for a mobile device.

The thing that stops Kashoo from competing toe-to-toe with Xero and QuickBooks is its lack of automation and integrations. Automation would help those who have higher transaction volumes save time on mundane data entry, while more integrations would allow Kashoo to have the capabilities to compete with the more advanced functionality of Xero and QuickBooks.

In terms of integrations, Kashoo does have an open API, so it can be adjusted to fit the needs if you have a developer that can do some custom work for you.

Non-Fully Functional Accounting Software

So we talked about the fully functional accounting software, but can the other software get your from point A to B for your accounting needs? Sometimes. Running with the vehicle analogies, it would be like owning a motorcycle, which works well enough on warm sunny days, but won’t do the job in a snow storm. So, the software can work great, if you don’t need to rely on it all the time, or if you can count on an accounting professional to give you a lift when the conditions aren’t ideal.


Wave is probably most like an electric car. On an average day, you may only need it to go 150km, and the range is 160km, so it’ll work ok. But what happens when you make a wrong turn and that trip now becomes 170km? Wave can be ideal for you a lot of the time, and if you only have shorter trips to make (less transaction volume) and are always going the same place (always entering the same types of transactions), it can be your ideal solution.

Wave is frustratingly close to being able to do most of the basic things that an accounting professional would expect accounting software to do. And maybe Wave is like the electric car, in that the range is coming, but for right now it’s more of a niche solution then one that’s ready for the mainstream.

If Wave had a reconciliation feature, they would have made the ranks to be fully functional accounting software. I know that Wave believes that they have a new way of bookkeeping that doesn’t necessitate reconciliations – and to a partial extent I understand their position –  but not having a reconciliation feature is omitting an oft-used and valuable safety feature. There needs to be a way to check the business numbers at a single point in time and verify that the data is correct. The data may be 95% or even 99% correct, but it’s still going to introduce errors that can get bigger and bigger (and errors in accounting tend to snowball as opposed to quietly fade away).


So FreeAgent (and I’ll argue FreshBooks), are more like motorcycles. They’re good for quite specific things, but start to fall down when given tasks they were just not designed to handle (like a rainstorm, multiple passengers, or safety).

FreeAgent really is billing software for freelancers (thus the name FreeAgent). It’s right on their home page”

“Thousand of freelances and small businesses are discovering a stress-free way to manage their books and invoicing”.

If you’re in a business where you need to manage projects, re-bill your expenses, and bill out based on time, then FreeAgent is a very attractive choice. Especially if you’re working with an accounting professional who’s familiar with FreeAgent, that can coax it through those special accounting situations that may only make up 1% of your transaction volume, but 99% of your pain in dealing with the software. FreeAgent does have an IRIS OpenBooks program, which is designed so that users can bring in accounting professionals that have special access to a client’s FreeAgent records. If you’re a small business user, I’d recommend going with an accounting professional affiliated with this program, so that you know the accounting professional is familiar with the software and is open to using it.


FreshBooks started off as invoicing software and then declared itself cloud accounting software. In reality, it still is what it always was, which is invoicing (and expense tracking) software. In terms of invoicing functionality, it’s similar to FreeAgent. If you’re a freelancer or creative business, that bills out clients based on expenses and tracked time, then FreshBooks is a pretty great solution. The big difference between FreshBooks and FreeAgent, is that FreshBooks’ user interface and experience is miles ahead. What FreshBooks does do, it does it really well, but there are many basic accounting functions it just can’t do. I’d say FreshBooks is tied with Kashoo for the title of being the simplest software to use. The difference of course is that Kashoo really is cloud accounting software, whereas FreshBooks simply is not.

FreshBooks reminds me a bit of QuickBooks Online, whereas they seem more closed in their approach to business. One example of this is the shuttering of the FreshBooks user forums. This helps them control their message and minimize published negativity. Another example of their close approach is that they limit integrations with competing products or services.

Like my recommendation for FreeAgent, if you’re using FreshBooks for accounting purposes, I’d do so in collaboration with an accountant professional who’s familiar with the software and open to using it. Hopefully they’ll understand what FreshBooks is lacking and have the wherewithal to deal with those shortcomings.

Where Is Your Business Located?

One other thing to consider when evaluating software, is where the software was developed. To generalize, software becomes a better fit for your company if it was developed in the country your business is located in. This is due to factors such as taxation, reports, terminology, payroll, payment processing, and bank connections.

In that sense, Xero would gain some points in comparison to QuickBooks Online for New Zealanders and Australians, whereas QuickBooks Online will gain some points in comparison to Xero for Americans. FreeAgent definitely is more attuned to the needs of those in the U.K. and both Kashoo and Wave understand the tax needs of Canadians.




Michael S Tan
Title: Director of Finance
Company: Unbounce
LinkedIn Profile
(Director of Finance, Unbounce) |

Loved Xero, hated Quickbooks Online. Found QB to be just too clunky. Our needs were outgrowing the SME space however so migrated over to NetSuite.

If Xero could handle consolidated income statements and balance sheets, we couldve held out for a while longer.

Go Xero Go.

(Agent, JKS Solutions, Inc.) |

What software do you use now for consolidation? Is there any spreadsheet that I can use to consolidate the financial statements from Xero?

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