If you work as a freelancer or run your own small business, you probably can’t afford a full-time accountant – but you also can’t trust your finances to manage themselves. Fortunately, there’s an app for that. With about five million global users, FreshBooks is one of the most popular cloud-based accounting programs available. It provides intuitive, non-technical tools to help with invoicing, expense tracking, timekeeping, and basic project management.
FreshBooks has many competitors in the crowded online accounting space, including Kashoo, Zoho Books, Xero, and Wave. With versatile payment options and automated accounting functions, unlike some of its cheaper competitors, it’s especially useful for busy entrepreneurs who can’t afford to devote time to manual accounting activities.
How It Works
To sign up for FreshBooks, you just need to provide your name and email address. For paid plans, you don’t have to enter a credit card number until the end of your 30-day trial period. After you enroll, you’re automatically billed on a month-to-month basis and can cancel at any time.
The heart of your FreshBooks account is a dashboard that lets you create estimates, track time worked, send invoices, manage expenses, edit client lists, and generate financial reports for your business. This dashboard has a custom URL, expressed as “yourname.FreshBooks.com.”
You can automate many FreshBooks functions, including payment entry, late payment notices to clients, and report generation. You can also link your account directly with a third-party payment application (such as Stripe) to create an online point of sale for your company. Unless you have a free account, FreshBooks also lets you replace its own branding with your corporate logo on invoices you send to clients. For businesses that don’t need to manage complex financial transactions, it is designed to fill the role of a human accountant.
FreshBooks’ features vary according to each available plan.
The free plan includes only some of FreshBooks’ useful features, and you can only have one client on it. You’re given just 14 days before being prompted to upgrade – as opposed to 30 for paid plans – after which, you’re pelted with weekly up-sells.
- Invoice Creation and Delivery. FreshBooks lets you create an unlimited number of invoices that include your name or business name, contact information, and personal or corporate logo. You can specify an hourly rate, per-unit cost, or flat service fee, as well as a due date. Once created, you can deliver an invoice by email, or print and send it through the postal mail. If you send your invoice online, you can see when it’s viewed for the first time.
- Estimates. Before beginning a project, you can use FreshBooks to generate an estimate for your client – and edit it anytime during the project. When it’s completed, convert the estimate to a formal invoice with a single click.
- Payment Acceptance and Tracking. The FreshBooks platform lets you accept major credit cards, including Visa, MasterCard, and American Express (using a third-party payment application), as well as PayPal. Any currency can be used to invoice and accept payments. When you’re paid, either in part or in full, the amount due on the invoice changes to reflect that. You can also accept offline payments such as cash and checks, though you have to update your invoice manually in those cases. You can refund a client’s payment or write off a delinquent invoice – zeroing out its balance without recording that it has been paid.
- Reminders and Notices. You can generate late payment reminders for delinquent clients, or instruct FreshBooks to automatically send out notices after each due date passes.
- Mailing Services. FreshBooks can package and send your invoices anywhere in the world via traditional post. To use this service, you have to buy “stamps,” which are mailing credits that include postage, packaging, and labor. Individual stamps cost $2.29 each, with the cost dropping to $1.79 for orders of 100 to 499, and $1.49 each for orders of 500 or more. It takes one stamp to send an invoice within the U.S. and Canada, and two to send it anywhere else.
- Manual Expense Tracking. You can track your expenses by snapping photos of your receipts and uploading them to your account. You can also assign specific expenses to clients and automatically add line items to your invoices.
- Time Tracking. FreshBooks has a built-in time clock, which you can start and stop at will, that keeps track of your billable hours. Keep a separate time clock with different rates for each client. You can create invoices directly from your time sheets whenever you like.
- Reports. FreshBooks can generate reports for your overall profits and losses, taxes, expenses, and collections history. Use these to measure the financial health of your business at a glance.
For $19.95 per month, Seedling lets you add up to 25 clients and have the option to hide FreshBooks branding on your invoices. Additionally, this plan includes all the features of the free plan, plus the following:
- Automatic Expense Tracking. The Seedling Plan lets you import your expenses directly from your bank or credit card accounts, eliminating the need for manual entry on the majority of items.
- App Integration. The platform integrates with dozens of third-party apps, including options for payroll management (like ZenPayroll), tax software (such as SimpleTax), project management tools (like Basecamp), customer relationship management (such as Highrise), and more.
For $29.95 per month, you get all the features available with Seedling, plus the following:
- Unlimited Clients. Your Evergreen plan lets you add as many clients as you wish to your account.
Mighty Oak Plan
$39.95 per month includes all the features available with the lower plans, plus the following:
- Project Management Tools. Basic project management tools, such as team time sheets that let you set different rates for different staff members.
- Historical Time Management Sheets for Teams. If you manage a team, you can see each member’s historical time logs since your account began.
- Additional Users. At no extra cost, you can add one additional user to your account. If you want to add more team members, it costs $10 per month, per user.
1. You Can Accept PayPal and Credit Card Payments Through FreshBooks
You can link your FreshBooks and PayPal accounts and automatically update your invoices when you’re paid. Though you can accept PayPal payments from clients through Wave, you cannot actually link your accounts. By linking your FreshBooks account with a third-party payment platform, you can also accept credit card payments. You can’t do this with Kashoo or Zoho Books.
2. Your Invoices and Account Automatically Update for Online Payments
When you receive an online credit card or PayPal payment, FreshBooks records it and updates the pertinent invoice. By contrast, Kashoo requires you to enter all payments manually, including those made through PayPal. Zoho Books requires manual entry for all credit card payments.
3. You Don’t Have to Pay for Phone Support
A free FreshBooks account allows access to toll-free phone support lines for customers in North America, the U.K., and Ireland. Zoho Books and Wave also have call-in support, but both restrict access to paying subscribers. At minimum, you must sign up for Wave’s $9-per-month Plus Package or Zoho’s $24.99-per-month subscription to get help from a live person.
4. You Can Invoice in Multiple Languages
Many of FreshBooks’ competitors require your invoices to be written in English. If you have clients in other countries, this can come across as discourteous, even if they understand the language. In all FreshBooks packages, you can set each client’s default language. Choose from English, Spanish, French, German, Italian, Norwegian, Swedish, Danish, Dutch, Portuguese, and even Estonian.
5. Multi-Currency Invoicing Is Available
All FreshBooks packages allow you to set default currencies for each client and invoice them in their home denominations. FreshBooks handles the conversion math at current rates. By contrast, Xero’s cheaper plans don’t let you invoice in multiple currencies – you need to opt for the $70-per-month “Premium 10” plan to get this benefit.
6. Clean, Practical, Helpful Interface
FreshBooks has an intuitive, crisp interface centered on an uncluttered dashboard. From here, you can easily access separate tabs for each of FreshBooks’ main functions, which include creating and sending invoices, tracking expenses, and generating reports.
Within each tab, large, clearly marked buttons and labels direct you. For newer users, the platform also includes native text that provides additional explanation for each feature without requiring you to go into the help section. By contrast, platforms such as Zoho Books and Wave try to stuff as many functions into a single screen as possible, creating needless clutter.
7. There’s a Free Version
Though it’s somewhat limited, FreshBooks does have a free version. That’s more than competitors like Kashoo and Zoho Books can say.
1. The Free Version Is Very Limited
Unlike Kashoo, Xero, and Zoho Books, FreshBooks does have a free version. However, it’s extremely limited, allowing just one client and eschewing key features like automatic expense importing and team time tracking. And, it appears to be moving in the wrong direction: When FreshBooks first launched, you could add three clients to your free account.
For comparison, Wave offers its entire suite of services – including unlimited clients and invoices – for free. You only have to pay for packages that include live phone and chat support.
2. No Inventory Tracking or Depreciation
If you run a business that trades in physical goods, you can’t use FreshBooks to track your inventory and shipments. Though it allows you to track your expenses by uploading receipts and suppliers’ invoices to your account, its competitor Xero uses your expenses and payments to keep a real-time, automatically updated accounting of your inventory. There’s also no depreciation schedule for fixed assets through FreshBooks – an important consideration at tax time. Xero has this as well.
3. No Payroll Functions
FreshBooks does let you track your team’s billable hours, but it lacks real payroll functions. You can’t record employee hours, withhold taxes, make direct deposits, or cut checks with the software, though you can log payments to contractors as expenses.
By contrast, Wave has a payroll app that costs $5 per month, plus $4 per month for each employee in the system. Xero’s higher-cost versions have full payroll functionality, including direct deposit. FreshBooks does integrate with third-party payroll apps, but this can present other drawbacks, including higher costs, lack of customer service on FreshBooks’ end, and potential functionality issues.
4. Uncompetitive Pricing
Relative to some of its competitors, FreshBooks suffers on price. Kashoo, which offers similar features (and unlimited invoicing), costs just $49 per year. This compares to $19.95 per month for the cheapest paid version of FreshBooks, which limits invoices to 25 clients. Meanwhile, Wave’s accounting package – similar to FreshBooks’ Evergreen plan – is completely free for users who don’t opt for a live support package.
5. Short Trial Period and Persistent Up-Selling for Free Version
FreshBooks offers a 14-day free trial period through its free version. By comparison, many of its competitors have 30-day free trials with no credit card required. Additionally, during your FreshBooks trial period, you receive regular prompts to sign up for a paid plan. The up-selling continues weekly until you upgrade.
FreshBooks is definitely a useful cloud-based accounting and invoicing solution for freelancers, solo professionals, and owners of small businesses – plus, it offers a free version, which may be sufficient if you have just one client to bill. If you just need to track your expenses, generate invoices, and ensure that you get paid, you’re likely to find it efficient and easy to use. And, if you do get stuck, free support is just a phone call away.
On the other hand, FreshBooks lacks many accounting features, such as inventory management and payroll, that are essential to businesses with multiple employees. These are frequently offered in competing packages.
FreshBooks has lots of useful features for businesses in need of basic accounting programs, but it suffers on price when compared to similarly basic competitors such as Wave and Kashoo. If you need a cheap, well-rounded accounting platform, look to one of these options instead.
4 stars out of 5: A slew of basic accounting features, coupled with added perks, make FreshBooks attractive. However, limits to how many clients you can bill with the free version – plus unattractive pricing overall – count against it.
Is FreshBooks your choice for cloud-based accounting software, or do you prefer another option?