Every business has their dream accounting software that checks each of their boxes, making finances and expense tracking something they can basically set and forget. While you may never find this dream software solution for your business—you can get close. For some freelancers and small businesses, FreshBooks has proven to be a very good option that focuses on positive cash flow.
What is FreshBooks?
FreshBooks is a cloud-based accounting software designed for freelancers and small businesses that specializes in invoicing and payments. Features include daily functions like time tracking and project management, along with unlimited invoicing, invoice payment processing, and accounting payments from clients to save you time.
While FreshBooks doesn’t offer the comprehensive suite of QuickBooks, FreshBooks pricing and unified suite of useful features make it competitive. With the FreshBook plans and add-ons you can manage nearly all elements of your business finance in one platform. FreshBooks Lite starts at $15/month, with a middle tier at $25/month and their top tier at $50/month, each based on the number of billable clients.
FreshBooks pros
- Good user experience
- Double-entry accounting
- Team collaboration
- Inventory, mileage, and time tracking
- Project and proposal functionality
FreshBooks cons
- Poor setup support
- Limited customizations
- Weak mobile application
- Lacks tax support
FreshBooks features
Invoicing
One of the original core offerings, FreshBooks invoice capabilities allow you to create professional invoices that let clients pay instantly through FreshBooks Payments. FreshBooks allows for unlimited invoice automation, including reminders for outstanding invoices and past-due payments, which saves you time and encourages faster payments. This feature also allows business owners to require deposits from clients, facilitating better cash flow. One of the most desirable FreshBooks invoice options is to create recurring invoices for your repeat customers.
FreshBooks invoices easily pull in hours from FreshBooks Time Tracking, ensuring that you’re getting paid for all of the work you put in. Additionally, you can create retainer relationships for a set period of time or the lifespan of a particular project.
Customized client invoices are an easy way to upgrade your invoicing, and the FreshBooks app allows for client invoicing on the go.
Expenses
FreshBooks Expenses links bank accounts and credit cards to import your spending for up-to-the-moment expenses within your FreshBooks account. Receipt capture means you never have to worry about losing or ruining paper receipts as you track expenses.
Expenses are rapidly auto-categorized to facilitate tax filing, and you can click to bill clients for any related expenses. Spend is visualized in charts to help you see at a glance how much is being spent on specific projects the moment you sign into your FreshBooks account. FreshBooks double-entry accounting allows for these expenses to be easily managed by your accountant for maximum efficiency.
Time tracking
Contract or hourly employees will love FreshBooks’ ability to track billable hours and breakdown project deadlines. You can use the FreshBooks app or the FreshBooks Chrome Timer, and there are integrations to track time in Asana, Trello, Basecamp, and Teamwork. Managers can see employee time at a glance and categorize time based on projects, clients, or specific goals. Once billable hours are logged you can invoice clients directly and automatically.
Projects
FreshBooks Projects allows you to add employees, contractors, and clients to collaborate on assignments and provide feedback for each stage of the process within a FreshBooks account. This feature also allows for file storage so everyone can access important documents for the project.
Estimates
Create proposals and estimates with a few clicks and send them to clients for instant approvals and unlimited invoicing. If the client likes the estimate or proposal they can simply click a button to start now and submit payments.
Payments
FreshBooks allows invoice payments via credit card or ACH transfer to help your clients pay their way—and pay you faster. Payment reminders are also helpful for small business owners who need better cash flow. You can upgrade to Advanced Payments to access a payment terminal for credit card processing in person, and to create customizations and automations for specific customers.
Accounting
If you need double-entry accounting, FreshBooks accounting software can give you (and accountants) exactly what your business needs. Balance sheets and General Ledger help to provide visuals and reports for your current standings. Accounts Payable is integrated with your invoices, and Bank Reconciliation allows for rapid book closing.
Reports
Basic reports like profit-and-loss, cash flow, expenses, sales tax summaries, and more are available with a few clicks within FreshBooks cloud accounting. It’s easy to filter by client, date range, or product, and you can easily export, print, send, or save reports for others. While limited, FreshBooks accounting offers most of the reports needed by a small business owner.
Mobile
Unfortunately only invoicing, mileage tracking, and receipts are available for mobile use. Still, this limited version is pretty powerful, with customizations and in-app communication with clients. The rest of the FreshBooks suite uses cloud accounting to stay up-to-date.
FreshBooks products and plans
Lite:
- Price: $15/month
- Billing range: Up to 5 clients
- Features: Invoicing, expense tracking, basic accounting
Plus:
- Price: $25/month
- Billing range: Up to 50 clients
- Features: Increased invoice customization, estimates & proposals, automatic expense tracking, double-entry accounting, recurring invoices, mileage tracking
Premium:
- Price: $50/month
- Billing range: Up to 500 clients
- Features: Payment reminders, AP, accounting reports, click-to-pay
FreshBooks Payments charges 2.9% + $0.30, which is fairly standard for payment processing.
FreshBooks Lite
FreshBooks Lite is the most basic and affordable plan, starting at $15/month. You are limited to only 5 billable clients for invoices and estimates, and you can track sales tax and expenses. It’s a good entry option for freelancers or solopreneurs who only need these few functional features, although we’d probably recommend the comparable but free options offered by Wave.
FreshBooks Plus
FreshBooks Plus is advertised as their most popular plan, and offers quite a lot of features for $25/month. This option allows you to send client invoices to up to 50 recipients (and includes estimates and proposals). Other upgrades of this tier include automatic expense tracking, double-entry accounting, mobile mileage tracking, recurring invoices, and increased reporting options.
FreshBooks Premium
For larger businesses, the Premium tier provides FreshBooks accounting software with much bigger muscles. You get everything from the Lite and Plus tiers, with the addition of payment reminders, late fees, accounts payable, click-to-pay invoices, customized emails, project profitability tracking, and even more FreshBooks accounting reports. At $50/month FreshBooks Premium may be too pricey for small businesses, and QuickBooks Simple Start plan matches many of the same features for only $25/month. We might recommend Wave or QuickBooks instead of FreshBooks Premium tier unless you’re a die hard FreshBooks user.
The biggest complaint about FreshBooks tiers is that there isn’t another tier between 50 and 500 clients. Many small businesses operate in this space and request that the ceiling on the Plus tier be raised, or for a $35/month tier which allows for 100-300 clients.
FreshBooks add-ons
Gusto Payroll:
- Price: $19 + $6/employee per month
- Features: Full-service payroll
Add team members:
- Price: $10/person
- Features: Access for additional individuals
FreshBooks Advanced Payments:
- Price: $20/month
- Features: Saved credit card info, recurring billing profiles, subscription billing
FreshBooks Select
- Price: Customized
- Features: Preferred rates, account manager, customer trainings, more than 500 billable clients
Gusto payroll
Likely the most popular premium add-on, FreshBooks integrates seamlessly with Gusto payroll. Gusto Payroll is available for all plans, starting at $19 + $6/employee per month and a more comprehensive plan at $39 + $6/employee per month. This is significantly cheaper than QuickBooks, which is more expensive for the base product and the payroll add-on ($45 + $6/employee per month minimum)
Add team members
For FreshBooks Plus, Premium, and Select you can add collaborating team members beyond your accountant for $10/person.
Advanced payments
FreshBooks offers an upgrade to payment processing that makes taking payments far more customized. FreshBooks charges an additional $20/month for this add-on, which allows you to:
- Save credit card information
- Set up recurring billing profiles
- Create subscription-based profiles
Though expensive, this payment add-on can be effective and worth the price if you rely on subscriptions or repeat customers. The added convenience for your customers can improve your invoicing and cash flow.
FreshBooks Select
If you require more specialized services or grow beyond 500 clients but wish to stay on the FreshBooks suite, you can speak with a FreshBooks representative to make the move to FreshBooks Select. This exclusive and customized tier gives you:
- Preferred rates for payment processing
- A dedicated account manager
- Customized trainings to optimize FreshBooks use
While most larger companies choose to upgrade to NetSuite or other accounting platforms when they rise above the thresholds of more affordable accounting software, this can be the right option if your company grows to love the way FreshBooks works for your unique needs.
Common FreshBooks FAQs
Is FreshBooks better than QuickBooks?
FreshBooks is likely a better choice than QuickBooks if you’re a freelancer or operate a very small business and place a premium on invoicing, payments, and customer experience.
According to users, FreshBooks beats QuickBooks on customer support, price, and feature development. QuickBooks offers inventory tracking and better reconciliation, as well as more favorable integrations. Overall, FreshBooks features a higher score on the G2 review site.
FreshBooks’ Plus plan is $25 a month and offers much more than the QuickBooks $25/month tier, including recurring billing, better invoicing, and payment processing with no extra charge. If you find that you need stronger accounting or you grow beyond the 50 client limit then you are probably better off with QuickBooks.
How much does FreshBooks cost?
FreshBooks includes $15, $25, and $50 per month plans, and payment processing at 2.9% + $0.30.
Is there a free version of FreshBooks?
There is not a free version of FreshBooks. However, FreshBooks does offer a free trial, as well as 60% off for your first 6 months.
Is FreshBooks easy to use?
Customers rate FreshBooks as easy to use, and FreshBooks has created a wide range of resources to help train its users. The FreshBooks support team is available for webinars and email support on demand.
The verdict
FreshBooks began as an invoicing solution, and that is still where it remains strong. For customer-oriented small businesses, FreshBooks is a more affordable and dare we say more powerful option than the ubiquitous QuickBooks. Customized invoicing, easier click-to-pay, and a strong baseline of included features make FreshBooks a strong choice for freelancers, small businesses, remote operations, and businesses working with recurring clients.
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