FreshBooks Review

FreshBooks Review

FreshBooks is an accounting software designed for small, service-based businesses. What the software lacks in advanced features, it makes up for in ease of use and value. FreshBooks is a great accounting tool for any small business that needs to get their accounting under control quickly.

Pros

  • One of the easiest accounting software tools to use
  • Very quick to set up and implement
  • Receipt capture feature is notably easy to use

Cons

  • Plans have user limits and additional users cost extra
  • Lacking advanced inventory management features
  • Limited templates and customization options
Analyst's Rating
86
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Junior Research Analyst

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What is FreshBooks?

FreshBooks is an accounting software that’s designed for small businesses with up to 50 employees. Because of the easy-to-navigate interface, FreshBooks is accessible to those who have little knowledge of or experience with accounting. We recommend FreshBooks for freelancers who are just starting out and need a quick-to-implement, intuitive invoicing and accounting tool.

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Table of Contents

FreshBooks Review Summary

FreshBooks is a cloud-based accounting software company that was founded by Michael McDerment in 2003. Over 100,000 customers currently use FreshBooks for their accounting and invoicing purposes. The tool was designed exclusively for small and micro businesses, so it offers a notably basic interface and intuitive user experience.

FreshBooks is designed for small, service-based businesses, and the company is very upfront about the fact that the software is not going to work for large companies or those with very specific needs. The features consist of tools to facilitate invoicing, payments, expense tracking, estimates, time tracking, project management, and a basic client CRM system. Along with that, there are reports across invoicing and expenses, payments, accounting, and time tracking.

FreshBooks pricing is fairly average for the market, with plans starting at $15 per month and going up to $50 per month.

  • The Premium Plan is going to offer the best value because it offers unlimited clients, while the other two plans cap your amount of billable customers
  • Advanced payments and additional team members will add between $10 and $20 to your monthly cost
  • There’s a free trial that allows you to test FreshBooks for 30 days before deciding if it’s the right tool for you

Overall, FreshBooks is one of the most intuitive, user-friendly tools on the market for small or micro businesses. In spite of its limitations relative to other accounting products, we recommend FreshBooks to small businesses who offer services rather than products, given that the features to support inventory management are not as advanced as alternatives.

While the tool is notably user-friendly, it’s not nearly as nuanced as tools like Xero and Zoho Books. If you’re looking for something more advanced, have a lot of inventory to keep track of, or conduct business with many different clients, we recommend opting for something more advanced like QuickBooks or Zoho Books.

FreshBooks Pricing & Cost

FreshBooks pricing starts at $15 per month for the Lite Plan and goes up to $50 per month for the Premium Plan. If you need specialized features, FreshBooks will create a custom plan for your business. There’s also a small discount on the month-to-month cost if you commit to a yearly plan. Based on the client limits with every plan, we recommend the Premium Plan as you’ll be able to bill unlimited clients.

PlanPricingDetails
Lite Plan$15 per month
  • Unlimited invoices for 5 clients
  • Track expenses
  • Send estimates
  • Track sales tax
  • Mobile application access
Plus Plan$25 per month
  • Bill up to 50 clients
  • Recurring billing features
  • Run business health reports
  • Invite accountant to access
  • Double-entry accounting reports
Premium Plan$50 per month
  • Unlimited clients
  • Customized email templates
  • Accounts payable capabilities
  • Late payment reminders
  • Track projects and profitability

FreshBooks Key Features

Throughout this review, we’ll walk through the features offered by FreshBooks and make note of the tool’s usability. We’ll also mention the market value and company customer service. Images of the software will be included so that you can get a sense of what it’s like to use FreshBooks.

Invoicing

Invoicing is FreshBooks’ strongest feature. Creating invoices with FreshBooks is incredibly quick and easy, and the delivery of the invoices is accurate and immediate.

For each invoice, you can customize the style, set automatic payment reminders, choose to charge late fees, and set different currencies. You will add your company logo, select a client to bill from your saved clients list, and add line items.

Each line item you add will have the option to add a tax, and you’ll need to set all the tax options relevant to your goods and services. Because of this, we recommend creating tax categories beforehand so you can easily add the proper taxes to items without having to do it manually each time.

FreshBooks Invoice

You’ll also be able to add the following to your invoices:

  • Discounts
  • Payment schedules
  • Notes
  • Terms of payment
  • Deposit requests
  • Attachments

Invoices can be sent via email or you can create a shareable link to send to clients. With whichever option you choose, you’ll be able to customize the email using dynamic fields. This automatically fills information into the invoice and email, which will make it easier for you to put invoices on autopilot.

With FreshBooks, you’ll also be able to create invoices one by one or create recurring invoice templates, which are sent on a repeating basis.

Recurring Invoices

Many businesses have recurring invoices for customers that purchase repeat services. If this is the case for your business, you’ll be able to save recurring templates that will be automatically sent to relevant clients. The process is much the same as creating a regular invoice, but the recurring invoices will allow you to schedule the issue dates, how often the invoices are sent, and set a limit to how many are sent.

When we tested the recurring templates, we found that they were delivered to clients promptly, with all the correct information. Clients will receive an email where they can view the invoice, send a message to your business via email, and pay the invoice.

Invoices Sent to Your Business

There’s a section in FreshBooks where you can view the invoices that other FreshBooks users have sent to your business—this is essentially where you can see what you owe to other businesses. This category is broken down into your overdue, paid, and viewed invoices.

Time Tracking

The time tracking feature will allow you to track time and bill your clients for hours worked. You can track your work with a timer, if you are doing the work in real-time and want an exact record of time spent working, or by adding a manual entry after your services have been completed.

This section is basic, though will be detailed enough for most small businesses to track the time they’ve spent on client projects. It’s helpful that you can generate invoices and send them directly from this section— this reduces the time you’ll spend navigating through different sections of the tool.

Timed Entries

To time projects, you’ll select the “Start Timer” button from within the Time Tracking tab. This will bring up a small window in the bottom right corner, as shown in the image below.

FreshBooks Time Tracking

From there, you’ll choose the client the work is being done for, add the service you are working on, and make a note of what you’re doing. Once you hit stop, the timed project will be saved as a line item. When you’d like to bill the client for the completed work, simply click “Generate Invoice” and FreshBooks will create the invoice for you.

Payments

FreshBooks offers a standard amount of payment options. You can choose to accept payments with credit cards, by bank transfer, and with SEPA.net. FreshBooks can facilitate payments from Visa, Mastercard, Discover, American Express, and ApplePay with a 2.9% + 30 cent payment per transaction. There is a 1% automated clearing house (ACH) charge for bank transfer fees, and if you choose to accept payments through SEPA.net, you will be charged 1% and .25 Euro per transaction.

You can also connect with Stripe and PayPal to accept payments. Both will charge 2.9% and a 30 cent fee for each transaction.

Expenses

Just as FreshBooks allows you to track your sales with invoices, you can track the money that your business spends on goods and services. Adding new expenses is simple, as you can add the merchant and description, attach an image of a receipt for proof of purchase, and add relevant taxes. You’ll also be able to categorize your expenses under a variety of pre-selected categories that FreshBooks offers.

While this section is relatively basic, it’s still detailed enough that you’ll keep good track of your expenses. Being able to attach an image of your receipts is very helpful, though this isn’t quite as advanced as other tools like Zoho Books, which pulls information from a receipt image and automatically adds it to your expense reports.

Accounting & Accounting Reports

FreshBooks streamlines the creation of accounting reports by pulling in data from invoices, payments, expenses, and your bank account. FreshBooks also provides the ability to invite your accountant to view your account.

Compared with other accounting software tools, this section is somewhat thin, but again, if you’re a small service-based business, it’s likely sufficient.

Double-Entry Accounting

FreshBooks offers double-entry accounting where you can track both sides of a transaction to easily balance your books. It’ll give you more insight into your financial performance and ways to cut costs. Below is a list of what FreshBooks categorizes as double-entry accounting:

  • Cost of Goods Sold
  • Other Income
  • General Ledger
  • Trial Balance
  • Chart of Accounts
  • Accountant Access
  • Bank Reconciliation
  • Balance Sheet

Invite Your Accountant

Most businesses will require an accountant to help manage their expenses and tax returns. You can give your accountant access to your FreshBooks reports and data, which will allow him or her to manage your chart of accounts, view reports, and create journal entries to make notes throughout the year.

Accounting Reports

The table below describes the accounting reports that FreshBooks will generate for your business. Compared with more advanced tools, Freshbooks has fewer pre-built reports to offer, but includes the most crucial information for most businesses.

Accounting ReportDescription
(A) Balance SheetA breakdown of your company’s assets, liabilities, and equity
(A) Profit & LossShows what you owe and if the company is bringing in more money than it’s spending
(A) Cash FlowThe cash coming into and out of your business
(A) General LedgerA bookkeeping tool where all accounting data is aggregated
(A) Trial BalanceThis shows whether your books are balanced
(A) Bank Reconciliation SummaryDisplays FreshBooks entries and transactions that haven’t yet been reconciled

Tax & Finance Reports

In addition to generating accounting reports, FreshBooks generates tax and finance reports to help you manage and understand your business, as well as prepare for tax time. These insights should help you uncover valuable financial information about your business, like aging accounts receivable issues that need to be addressed.

ReportDescription
(T) Sales Tax SummaryGives a breakdown of the taxes you owe
(F) Accounts AgingSee the payments that are taking a while
(F) Accounts Payable AgingDetermine how much you need to pay your vendors
(F) Payments CollectedProvides an overview of the payments collected during a certain period of time
(F) Credit BalanceA summary of your credit balance for clients during a certain period of time
(F) Expense ReportSee where you’re spending your money
(F) Revenue by ClientA breakdown of each client’s payments and the revenue you make from them
(F) Invoice DetailsProvides metrics about all invoices over a certain period of time

Along with these core financial reports, there are also reports regarding time tracking, profitability, and retainer information.

Projects

Being able to track individual projects is incredibly helpful for those who want to keep track of time spent on certain tasks. This feature is particularly helpful as not every accounting tool will have the ability to track projects.

FreshBooks Projects

You can create an hourly or flat rate project and add services, individuals who have worked on the project, expenses, and more. If you tend to work with clients on an ongoing basis or provide long-term services rather than quick, one-time services, this section will come in handy.

Additional Features

A brief table of additional features offered by FreshBooks is provided below.

FeatureDescription
DashboardThe dashboard is the first thing you’ll see when you log onto your FreshBooks workspace. It will show basic graphs about your outstanding revenue, total profit, revenue streams, and more. Having this high-level overview of your business is helpful so you can take a glance and see what’s happening with your financials.
Client CRMWith FreshBooks, you’ll be able to import and export a CSV file containing customer and client information. You’ll also be able to add clients one by one, and can do the same for your vendors.
Team MembersYou’ll be able to add your company’s employees, your accountant, and any contractors you work with. You’ll also set their billable rates, roles, and include basic contact information.
Integrations & Third-Party ToolsFreshBooks offers a variety of integrations with third-party vendors like Bench, Gusto Payroll, FreshBooks Payments, and more.
EstimatesEstimates or proposals are sent to clients to show them your prospective services and charges. If a client accepts your proposal, you’ll be able to convert it to an invoice with just a few clicks, which is incredibly easy.

FreshBooks Customer Support

The FreshBooks team is available from 8AM to 8PM EST on weekdays. They pride themselves on being quite accessible, and we found this to be the case, as our support emails were responded to in under three hours. Customers can use the Help Center for a self-help option or email and live chat the team with any questions.

Customer Support ChannelsEmail, Chat, Phone
In-App Support Channels“What’s New” tab, Help Center access
Other Support ResourcesBlog, How-To Videos
Application Status PageYes

FreshBooks Alternatives & Competitors

FreshBooks competes with other popular accounting software tools like QuickBooks, Wave, and Zoho Books. In terms of usage and the user experience, we found it to be most similar to Wave. A few other alternatives are listed below.

QuickBooks Online

Serving more than 4.8 million users around the world, QuickBooks is a 5-star accounting software. QuickBooks Online offers advanced accounting features, which enable users to easily gain excellent insight into financials and keep data organized. Given its massive user base, QuickBooks is often viewed as the gold standard for small business accounting software.

Wave

Wave is a popular freemium accounting software with a clean, intuitive, and easy-to-use backend. The free plan 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. Unlike FreshBooks, Wave has the added benefit of payroll.

Xero

Xero is one of the leaders in accounting software, and as such, has a much broader set of features than FreshBooks. The company caters to more than two 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 has a more challenging learning curve.

For one-to-one software comparisons, check out the following articles:

Is FreshBooks Right For You?

FreshBooks is a great choice for small, service-based businesses. It’s certainly not advanced enough to support large businesses or product-based companies, due to the lack of advanced inventory management features.

Overall, we found the FreshBooks platform to be one of the easiest to use across accounting software options. It’s a great value, starting at just $15 per month, and is ideal for those who need to quickly set up a software to begin tracking company financial information. The dashboard is very pleasing to the eye and the tool is extremely easy to navigate.

If you are interested in trying FreshBooks, sign up for a 30-day free trial.

Katelyn Anderson

Katelyn is a Junior Research Analyst at SoftwarePundit, where she conducts in-depth analyses of technology markets & products and writes software-related content. She graduated summa cum laude with degrees in English and Psychology. Her main areas of interest are content creation, user experience, and search engine optimization. You can connect with Katelyn on LinkedIn.

Katelyn is an expert in several software categories including:

  • Accounting software
  • Live chat software
  • Vacation rental software