This is a guest post from Kaitlin Little.
- Plans start at $15/month (Lite) for up to 5 clients, with the most popular plan (Plus) $25/month for up to 50 clients
- Additional users are charged at $10/month
- Free 30-day trial
Table of Contents
- What is FreshBooks?
- Is FreshBooks Easy to Set up?
- What are the Benefits of Using FreshBooks?
- Are there any Drawbacks with FreshBooks?
- Alternatives to FreshBooks
- Is FreshBooks Right for You?
If you're a freelancer or small business owner, you've probably come across the same struggles that I have with invoicing and accounting. Unless you make a conscious effort to streamline these processes and have the right systems in place, they can take up a lot of your time, pulling you away from other important tasks such as marketing and managing day-to-day operations.
A few years ago, I came across FreshBooks, which is an invoicing and accounting software designed specifically to help service-based businesses. At the time, I was still sending invoices manually using PayPal, and managing my expenses using a variety of Excel spreadsheets. The invoices weren't professional by any means, and I was spending way too much time on the administrative side of my freelancing business.
I signed up with FreshBooks (now FreshBooks Classic) and quickly realized how heavy-handed my processes had been. FreshBooks made quick work of billing clients, even for complicated projects, and turned tracking expenses into a painless experience for the first time. While the software is a bit pricey compared to others on the market (most notably Wave), it's not exorbitant considering it has the power to completely streamline your bookkeeping and shave hours off your week. In fact, the company claims it saves businesses over 192 hours each year, based on a survey they conducted.
What is FreshBooks?
FreshBooks is a cloud-based invoicing and accounting software for small business owners. It allows you to quickly create and send professional looking invoices, track expenses, and generate financial reports.
The software enables you to generate branded invoices and send them directly to clients through the platform. You can bill clients on a recurring basis, send overdue invoice reminders, and accept payments online using your preferred method (PayPal, Credit Card, etc). Instead of alternating between multiple programs, FreshBooks allows you to streamline the entire process from adding a client to setting up your project.
FreshBooks also connects to your business bank account, making it easier to automatically keep track of your expenses. You can also log receipts using the mobile app, and assign different categories (for example, advertising, training, etc) to keep track of your spending.
The company has recently gone through a redesign to improve the user interface and add more features. FreshBooks Classic was basically a glorified invoicing platform, although the new reiteration now offers double-entry accounting tools including Balance Sheet, General Ledger, Chart of Accounts, and more.
Is FreshBooks Easy to Set up?
I am, under no accounts, tech-savvy, but I did find FreshBooks quite intuitive, and surprisingly, it only took a few minutes to set up my account. The process is the same regardless of whether you're a freelancer or small business. Below I'll go through the setup process and show you how to get started.
Setting up a Company Profile
Once you sign in you'll be prompted to complete a company profile by adding your company's name, address, currency, and contact details. This information will appear on your invoices, so it's important to make sure that everything is accurate and up to date. You can also add in your standard rate, which syncs directly with the time tracking feature and allows you to bill clients on an hourly basis.
Customizing your Invoices
You can then customize your branding by adding your logo and setting a theme color using the options or selecting a hex code. FreshBooks only offers two types of templates (Modern and Simple) and fonts (Helvetica and Garamond). While options are limited, the good news is that you don't have to spend any time perfecting the layout of your invoice, as both templates are already polished to perfection.
Adding a Client
To send an invoice or estimate, you will first need to add clients. Like all other sections, you only need a few details to get up and running (name, company, email, and address). If you have existing data, you can easily import client information, services, expenses, and invoices into FreshBooks using an Excel spreadsheet.
The client dashboard provides a great snapshot of total outstanding and overdue invoices. You can also click into each client to view any unbilled time or expenses, and set the default currency.
What are the Benefits of Using FreshBooks?
With a clean interface, affordable plans, and powerful features, FreshBooks has become a leading software for many small businesses. Here are some of the benefits that I've come across while using FreshBooks.
One of the best features of FreshBooks is the simple invoicing system. It only takes a few minutes to assign a client and send over a professional-looking invoice. Once you've sent your invoice, you can track when it has been opened and see any action that has occurred through a timeline.
The software also has a built-in chat feature, which supports direct messaging (messages are sent as emails), making it easy to follow up with clients and keep all communication in one place. You can also set up automatic payment reminders to follow up with clients at set intervals (for example, 3 days after the due date), helping you get paid quicker. There is also an option to charge late fees, which can encourage your clients to pay on time.
FreshBooks simplifies your expense management process, allowing you to connect your bank account, import bank statements, or add expenses manually. I often find it hard to keep track of expenses, but it's an essential part of running your own business. When tax time comes round, there are always piles of receipts that need to be sorted so you can claim for the appropriate deductions. However, using the FreshBooks mobile app, I like that I can just take a picture every receipt and add details in at a later date. The receipt automatically syncs to my account, which is extremely useful when meeting with clients and keeps everything organized.
Another useful aspect is that expenses can be assigned to a client and added to invoices (option to include a mark-up). In addition, you can apply categories (e.g., advertising, car & truck expenses, contractors, etc) to each expense.
If you charge on an hourly basis, you can track time spent on various projects and bill the client for services completed. I find it easiest to use FreshBooks built-in web-based timer, but if you already have a preferred time tracking tool (such as Toggl or Time Doctor), the software also allows you to add time in manually. You can then review and generate invoices based on your recordings for different projects using the calendar view.
As time tracking isn't a core component of FreshBooks, it's not as intuitive or feature-rich as dedicated software (for example, there's no native desktop app, and you can't add breaks), but it still does an excellent job if you need access to hourly billing.
FreshBooks recently went through a major overhaul. One of the most beneficial changes in 2018 was the introduction of double-entry accounting features, including bank reconciliation, reporting, and journals. While this is only available on Plus and Platinum plans, it's a big step forward for the company and enabled FreshBooks to compete with other accounting software such as Wave and QuickBooks.
Freelancers and solopreneurs with minimal expenses may not need the additional tools offered, but for small businesses, double-entry accounting can provide valuable insights into cash flow and profitability. I particularly like to that I can now invite my accountant into each project and enable them to review my reports, expenses, and journal entries.
FreshBooks has a mobile app for both iOS and Android devices. Using the app, you can create invoices on your smartphone, accept payments, and manage expenses (although, not available on the Android version yet). If you're out of the office, you can also chat with clients directly and receive live updates on invoices. While you can do most functions using the app, reporting is unfortunately only currently available on the desktop version.
It came as little surprise to learn that FreshBooks has won multiple awards for its customer service. I've always felt like a high priority when dealing with the support team. Response times are quick, and you can get in touch with customer support through email, phone, and social media. In fact, every new employee has to spend their first month in customer support to learn about the product and their customers. The company also has an in-depth FAQ section, blog, and online Help Center with step-by-step instructions on how to use the software and the various features.
Are there any Drawbacks with FreshBooks?
FreshBooks is one of the best invoicing and accounting solutions on the market, although the software isn't perfect and does have a few drawbacks. Below are a few things you might need to consider before signing up.
Freshbooks Can be Expensive for the Features
Freshbooks' pricing works on a tiered structure based on the number of clients you have. For example, the Lite Plan starts at $15/month for up to 5 clients, and the most popular, Plus Plan, is $25/month for up to 50 clients. While this may seem quite reasonable, you can access a lot more features at a lower price point using alternative software such as Zoho Books and free products, like Wave. You will also have to pay for additional team members ($10/month) if you need them to track time and manage expenses, which can quickly add up.
No Inventory Tracking or Vendor Management
The new version of FreshBooks is really only suited for service-based businesses like agencies, local trades, law firms, and more. The software doesn't have any inventory tracking features or vendor management capability, making it difficult for e-commerce stores to use the system. FreshBooks Classic (the legacy version) offers basic inventory management allowing you to track stock levels. However, it was still falling behind competitors such as Zoho Books, which has complete inventory management with the ability to monitor stock levels, replenish, and value inventory using the FIFO (first in, first out) methodology.
Invoice Customization Could be Improved
As mentioned above, there are only two templates and limited font options to choose from when creating an invoice. While this helps keep everything simple, there isn't much flexibility to adjust the branding and send an invoice that actually represents your business. However, adding a business logo and changing the colors is often enough customization for most serviced-based businesses.
While FreshBooks has worked well for me, it may not be necessarily the best option for your business. There are plenty of alternatives that offer different features and may be more suitable, depending on your needs. I'll go through a few of the top-rated selections below.
QuickBooks vs FreshBooks
Serving "more than 4.8 million users around the world, QuickBooks(by Intuit) is a 5-star accounting software. The company has two different products; a desktop version (QuickBooks Pro) and a web-based version (QuickBooks Online). While I haven't used QuickBooks in my own business, both QuickBooks Online and QuickBooks Pro offer advanced accounting features, which enable users to easily gain excellent insight into financials and keep data organized. Given QuickBooks' massive user base, QuickBooks is often viewed as the gold standard for small business accounting software, and is our typical recommendation for small business accounting software. You can be assured that QuickBooks has all of the necessary functionality that you'll require If you run a small business.
In terms of pricing, both QuickBooks Online and FreshBooks offer 3 tiers of pricing, based on which functionality you need. The comparable tier at QuickBooks costs roughly the same as the comparable tier at FreshBooks. However, QuickBooks Online almost always offers a 50% discount on your first 6 months of using the
Wave is a popular double-entry accounting software with a clean, intuitive, and easy-to-use backend. What I like best about this company, is the free plan that includes accounting, invoicing and receipt scanning. It has the same features as FreshBooks, allowing you to send invoices, manage expenses, connect your bank account, and keep track of your financial health using the range of reports. But, unlike FreshBooks, Wave has the added benefit of payroll.
Wave is an excellent option for freelancers and small business owners. However, while the software is free, you will need to sign up to a plan if you want to process payments through the system. The software also doesn't support time tracking or have any inventory management capability, which is something you may want to consider.
Xero is one of the leaders in accounting software, and as such, has a much broader feature-set than FreshBooks. The company caters to nearly half a million users and includes invoicing, payroll, time tracking, and advanced inventory management. While the software is slightly more expensive, Xero is more comprehensive and better suited for larger companies that need more advanced accounting tools. With that said, it's also more complicated to set up and, as you might imagine, has a more challenging learning curve.
Is FreshBooks the Right Software for you?
Choosing the right accounting and invoicing solution is an important decision for any business. After reviewing top options like QuickBooks and Wave, I found FreshBooks to be one of the easiest to send invoices, accept payments and manage my expenses. If you're a solopreneur or run a small service-based business, FreshBooks will give you more time to focus on the important things.
To learn more about FreshBooks, visit their website here.
Kaitlin Little is a Freelance Writer who helps Health and Wellness brands grow their audience online. She's an Exercise Sports Scientist, Health and Physical Education Teacher and has a background in Physical Rehabilitation. Kaitlin is an active traveler and blogs at Balanced Abroad.