For this last segment we are reviewing the reporting capabilities of each platform. Here is the criteria we will evaluate:
- Standard Reports Usefulness
- Report Customization
- Report Delivery
Let’s get started.
Standard Report Usefulness
Freshbooks compiles all the reporting capabilities of the system under one tab called “Reports”.
Since Freshbooks started primarily as an invoicing software, they have really good detail on the A/R side of their reporting. Aside from the standard Balance Sheet and Income Statement, they include useful reports on:
- Revenue by Client
- Aged Receivables
- Recurring Revenue by Client
- Recurring Revenue – Detailed
- Revenue by Staff
- Time Tracking Reports
If you need to track employee time and bill that time to clients these reports will be very handy.
The standard income statement and balance sheet are useful but are very locked down. On the income statement you get one sales line item and one cost of goods sold account. Remaining expenses cannot be grouped, however, Freshbooks does allow the user to click through from the reports into specific transactions, which is very useful for managers.
Many times in a business the ability to customize a report is needed to provide unique insight, or to make some custom calculations on the report (such as Gross Profit % or % of Revenue). Unfortunately at this time, Freshbooks doesn’t offer the ability to modify their report layouts or the ability to add in custom calculations.
A few features that are helpful to customize reports are the following:
- Cash vs Accrual Reports
- Custom Time Periods
- Export to Excel
With the export to excel, you can do a lot of custom work there to manipulate the data how you need it.
Freshbooks allows you to export excel or pdf files as reports, or you can also simply copy the link in your browser window and send it in an email to someone. Currently there isn’t a feature that allows the user to send the report from within the system, or the ability to store reports in an area for review later.
Standard Report Usefulness
In contrast to Freshbooks, Xero has a broader range of reports that cover all aspects of an accounting system, including payroll, inventory, budgeting, and income/expense reporting.
I’ve used Xero’s standard reports for over 5 years now and there have only been a handful of cases where I had to export the report to excel for customization. The standard reports are very useful.
For most small businesses, you will be living in your aged receivables report and income statement, where you are able to gain great insights due to Xero’s customization features.
It appears that Xero approaches reporting from three angles:
- Customization of date, fields, and comparisons
- Flexibility in grouping, summarizing, and placing accounts
- Intuitive design to navigate and customize the report
We’ll use the income statement as an example. The first section of your report allows you to customize time period, cash/accrual, comparisons, and tracking categories. Different fields are also available to be added depending on the report you are creating.
For customizing your report, you can group, summarize,and even add custom formulas to your report. See the video below: (click image – will open new window)
These features allow a user to find great insights into their business with just a few clicks of the button. I love this feature.
Xero offers a few options for delivering reports. First, you can “publish” a report, which means that it is saved as a published file under the “Published” tab in the reports section. You can keep it there as long or as little as you want. There aren’t any folders or groupings in there so if you are creating a lot of reports than it can get messy.
Xero lacks the ability to send reports directly out of the system. You can share the link to the published report via email to whoever you are sending it too, or you can export it as a pdf or excel file and send via email.
Standard Report Usefulness
Similar to Xero, QuickBooks provides all the standard reports you might need for a small business all in one spot. Headings are divided by recommended, frequently run, custom saved reports, and management reports. I particularly like the custom reports area where you can save report templates and run them easily the next time you need them.
For those familiar with the QuickBooks desktop version, you will find some familiar features here. QuickBooks allows for customization in all their reports by using the “customize” button on the top left of the screen. It opens up the menu below which allows you to tailor the report by time period, cash/accrual, and add on other fields an calculations.
In comparison with Xero, what is lacking here is the intuitive interface and the ability to move accounts and create groups on the fly. With QuickBooks, everything is tied and grouped by how you set up your chart of accounts, so if you want to change the layout you’ll need to go there to do it. QuickBooks, however, beats out Xero in the amount of customizations offered on any given report.
Similar to Freshbooks, QuickBooks doesn’t have a place to publish reports or store them in the system. You can share links to the reports via email or export them to pdf or excel. There isn’t a way to email your reports or share them directly from the system.
For an average small business owner, I would recommend Xero over QuickBooks, as they have a more intuitive interface for reporting and offer more flexibility in how the income statement and other reports are laid out. If you are a data miner, or have a complex business, QuickBooks might be the better option since they allow you to add more fields and customizations than can be found in Xero.
Winner: Xero…by an Inch
We hope you have found or comparison series between QuickBooks, Xero and Freshbooks useful.
Feel free to review the rest of the Best Cloud Accounting Software for Small Business series:
- Part 1: The Criteria
- Part 2: Design
- Part 3: Automation
- Part 4: Eco-system (add-ons & apps)
- Part 5: Roconcilliation
- Part 6: Invoicing & Payments
- Part 7: Collaboration