If your goal is clean month-end, a management pack within seven working days, and a live 52-week rolling forecast, the right ledger is the engine that makes it boringly reliable. Below is a straight, no-jargon comparison of Xero, QuickBooks Online, and FreeAgent, written for UK service businesses (consultancies, agencies, IT/MSPs) with 5–50+ staff.
Pricing, features and promos change, always check the vendor page on the day you buy. Citations below point to official pages.
Quick picks (by common scenario)
- Project profitability + multi-currency (USD/EUR) → Start with QuickBooks Plus/Advanced or Xero Ultimate (Projects is Plus/Advanced in QuickBooks; Ultimate in Xero). QuickBooks
- Lots of stakeholders (unlimited finance users) → Xero (unlimited users across business plans). Xero Central
- You bank with NatWest/RBS/Ulster or Mettle → FreeAgent may be included while the eligible account stays active (one qualifying transaction/month). FreeAgent
While you compare, keep your process in view: our Best bookkeeping setup for SMEs (roles, controls, calendar) shows how the ledger ties to owners and a simple seven-day reporting schedule; if month-end is still slow, use Management accounts in seven working days to tighten the flow.
Pricing snapshot (list prices, excl. VAT)
- Xero UK: Ignite £16, Grow £37, Comprehensive £50, Ultimate £65 per month (price rise effective 1 Sep 2025). Projects is included in Ultimate (up to 10 project users; extra at £5/user). Multi-currency from Comprehensive up. Hubdoc receipt capture included on business plans. Xero Central
Annual equivalent at list: £192 / £444 / £600 / £780. - QuickBooks Online UK: Simple Start £16, Essentials £33, Plus £47, Advanced £115 per month. Projects is Plus/Advanced. Multi-currency from Essentials up. User caps by tier (1/3/5/25). QuickBooks
Annual equivalent at list: £192 / £396 / £564 / £1,380. - FreeAgent: often included with eligible NatWest Group/Mettle accounts (keep one monthly transaction), or buy direct (typical ranges vary by business type). Smart Capture OCR is included with a 10-receipt allowance; unlimited OCR is a £5+VAT add-on. FreeAgent
MTD baseline: whichever you choose, HMRC requires digital VAT records and MTD-compatible software for VAT-registered businesses. All three meet this. GOV.UK
Feature fit at a glance
| Area | Xero | QuickBooks Online | FreeAgent |
|---|---|---|---|
| MTD for VAT | HMRC-recognised (file in-app). | HMRC-recognised (file in-app). | HMRC-recognised (file in-app). |
| Multi-currency | Comprehensive/Ultimate. Xero | Essentials/Plus/Advanced. QuickBooks | Supported (banking & invoicing). FreeAgent |
| Projects / time | Projects in Ultimate (10 users included). Xero | Projects in Plus/Advanced. QuickBooks | Projects + time tracking built-in. FreeAgent |
| CIS / reverse charge | CIS supported. | CIS supported. | CIS for contractors supported. Xero |
| Receipt capture | Hubdoc included (business plans). Xero Central | Snap receipts in app. QuickBooks | Smart Capture (10/month; unlimited add-on). FreeAgent |
| Users | Unlimited (core accounting). Xero Central | Capped by tier 1/3/5/25. QuickBooks | Generally flexible collaborators. FreeAgent |
The fine print that catches teams out
- Multi-currency is tiered. If you invoice or bank in USD/EUR, Xero requires Comprehensive/Ultimate; QuickBooks enables FX from Essentials; FreeAgent supports multi-currency banking and foreign currency invoicing, confirm reporting needs. FreeAgent
- Projects isn’t on every plan. QuickBooks Projects is Plus/Advanced; Xero Projects is Ultimate (10 project users included); FreeAgent has projects/time out of the box. QuickBooks
- Bank-feed charges can exist. Most feeds are included, but some UK banks (e.g., Metro Bank) charge £1+VAT per account/month, collected via Xero. Check your bank. Xero
While you’re scoping, sense-check your bookkeeping outsourcing costs so software + volumes + month-end work line up cleanly, and skim Hidden bookkeeping fees UK to avoid pass-through charges (feeds/OCR) surprising you later.
Worked buyer examples (with monthly and annual software costs)
For illustration at list price on 29 Oct 2025; exclude promos and payroll add-ons. Always confirm on the day.
A) 30-staff consultancy (projects + USD billing + 6 finance users)
- Xero route: Ultimate £65/mo (Projects + multi-currency; up to 10 project users included) → £780/year. Xero
- QuickBooks route: Plus £47/mo (Projects + multi-currency; 5-user cap) → £564/year. If you outgrow 5 users, Advanced £115/mo → £1,380/year. QuickBooks
- FreeAgent route: if eligible NatWest/RBS/Ulster/Mettle, £0; otherwise typical direct pricing varies. Confirm FX/reporting fit. FreeAgent
Process tip: whichever stack you pick, lock a seven-day management accounts schedule so project margins land in time to act.
B) 15-person creative agency (GBP only, projects required, expense heavy)
- QuickBooks Plus £47/mo → £564/yr (projects included; user cap 5 suits this size). QuickBooks
- Xero Ultimate £65/mo → £780/yr (needed for Projects; unlimited finance users helps as teams grow). Xero
- FreeAgent (often included with Mettle/NatWest Group) with built-in projects/time; check if native reports cover what your board wants. mettle.co.uk
Cash tip: pair your ledger with a 52-week rolling forecast so VAT, payroll and supplier runs are planned—not surprises.
C) IT/MSP (time sheets, GBP only, 6+ finance users)
- QuickBooks Advanced £115/mo → £1,380/yr (removes user cap issues). QuickBooks
- Xero may be cost-effective if you don’t need Projects: Comprehensive £50/mo → £600/yr (multi-currency + unlimited users). If projects/time are required, step to Ultimate. Xero
Control tip: whatever you choose, use maker–checker payments and weekly bank reconciliations, see Best bookkeeping setup for SMEs for the checklist.
What HMRC expects (baseline you must meet)
- MTD for VAT: keep digital VAT records and file using compatible software. All three packages are recognised. GOV.UK
If your goal is fewer VAT scrambles and clean cash planning, combine the software with Monthly vs quarterly bookkeeping, cashflow and risk trade-offs and a simple seven-day month-end routine.
So…which should you choose?
- Pick Xero if you value unlimited users and are happy to pay for Projects only when you truly need it. It scales neatly once multiple managers, your bookkeeper and your accountant all need access. Xero Central
- Pick QuickBooks Plus/Advanced if you want Projects and multi-currency at lower tiers and you’re comfortable with user caps. QuickBooks+2QuickBooks+2
- Pick FreeAgent if you’re in the NatWest Group/Mettle ecosystem and want an affordable stack with built-in projects & time—just confirm multi-currency and board-reporting needs. FreeAgent+1
As you shortlist, glance at Bookkeeping outsourcing costs UK (2025/26) for realistic monthly scope, and if you’re scaling beyond a single role, consider an outsourced finance team / virtual finance office to own the seven-day management accounts outcome.
FAQs (plain English)
Are all three “MTD for VAT” compatible?
Yes, HMRC requires compatible software for VAT returns; these packages are recognised. GOV.UK
Which plans unlock multi-currency?
Xero: Comprehensive/Ultimate. QuickBooks: Essentials/Plus/Advanced. FreeAgent: supports multi-currency banking and foreign-currency invoicing, confirm reporting. FreeAgent
Where do projects/time live?
QuickBooks: Plus/Advanced. Xero: Ultimate (10 project users included). FreeAgent: built-in projects and time tracking. QuickBooks
Any hidden costs?
Watch bank-levied feed fees (e.g., Metro Bank £1+VAT per account/month via Xero), OCR allowances (FreeAgent 10/month unless you add Unlimited), and user caps in QuickBooks. Metro Bank
Ready to choose (without second-guessing)?
- Talk to us: Book a 20-minute planning call, we’ll map your month-end schedule, owners, and the right software tier for your stack.
- Do it yourself: Download the DIY Bookkeeping Checklist (UK 2025/26) and pair your pick with a 52-week rolling forecast so VAT, payroll and supplier runs are visible weeks ahead.