One of the lessons business owners have learned over the last few years, impacted by the coronavirus, is the importance of having accurate (and accessible) financial records. A lack of good accounting made it difficult for many businesses to get approved for one of the small business loans that were part of the Paycheck Protection Program (PPP). Now that PPP is closed, this will be even more important as those funds are exhausted and business owners turn to more traditional financing options like term loans, lines of credit, cash flow loans, or business credit cards.
Keeping your finances organized starts with good accounting software. FreshBooks is one option for helping you manage your own “books” online.
FreshBooks, originally created in 2003, is a cloud-based accounting program used by millions of small business owners worldwide. Many business owners use FreshBooks accounting software to manage invoicing, recurring billing, accounting, and even payroll.
In this review, we’ll cover:
- Who is FreshBooks Best For?
- Is FreshBooks Good for Bookkeeping?
- FreshBook Features
- Is FreshBooks Safe to Use?
- Pros and Cons
- FreshBook vs. QuickBooks Comparison
Who is FreshBooks Best For?
Although it’s used by many small business owners, FreshBooks seems to have a special appeal where freelancers, sole proprietors, and project-oriented businesses are concerned.
If you are a one-person show and don’t pay employees, FreshBooks could be a good fit for your business.
Is FreshBooks Good for Bookkeeping?
FreshBooks is accounting or bookkeeping software. The online service is a solid option if you’re looking for an online accounting solution and invoicing software to help your business keep track of cash flow, track expenses, create expense reports, take online payment for goods or services more efficiently. The cloud accounting platform’s wide array of features is one of the reasons why FreshBooks is a favorite of many small to mid-sized businesses.
FreshBooks online accounting package comes in three different options: Lite, Plus, and Premium. Each option includes different features, based upon the type and price of the plan you select.
Here’s an overview of FreshBooks’ three available plans.
|Lite||$15 per month ($13.50 per month if paid annually)|
|Plus||$25 per month ($22.50 per month if paid annually)|
|Premium||$50 per month ($45 per month if paid annually)|
|Additional Users||$10 per month (per person)|
|Advanced Payments (saving and charging client credit cards, subscription based billing, virtual terminal)||$20 per month |
*Not available with FreshBooks Lite
Additionally, if your needs are greater than what these plans offer, you can opt for the Select plan, which is custom-built for your business’s needs.
As mentioned, the features included with your FreshBooks plan will depend upon which version of the accounting software you choose. Below is a breakdown of the three plan options and the features included with each.
Starting with the $15/month FreshBooks Lite plan, all plans include the following features:
- Customized unlimited invoices (bill up to 5 clients)
- Track unlimited expenses
- Get paid with credit cards and bank transfers
- Track sales tax and see reports
- Apple and Android app
- Unlimited time tracking
- Create and send unlimited estimates
FreshBooks cloud accounting software offers some more robust features as well, detailed below. These features are available through FreshBooks’ more expensive monthly programs.
In addition to all of the features included with FreshBooks Lite, the Plus Plan (priced at $25/month) includes the following:
- Unlimited customized invoices to up to 50 clients
- Automatically track expenses
- Automatically track receipt data
- Send unlimited estimates and proposals
- Set up recurring billing and client retainers
- Run business health reports
- Double-entry accounting reports
- Invite your accountant
Does your business need invoicing software with the ability to invoice a larger number of clients? If so, FreshBooks Premium at $50/month may be the best fit. The Premium Plan includes everything both FreshBooks Lite and Plus have to offer. Plus, you’ll have access to these additional features:
- Unlimited customized invoices to up to 500 clients
- Track bills, bill payments, and vendors with accounts payable
- Track project profitability
- CUstomize email templates
- Customize email signature
Technically, there’s a fourth FreshBooks plan available if one of the standard plans isn’t a good fit for your business. You can speak with a dedicated Account Manager from the FreshBooks team to discuss a customized option (and price).
Perhaps the biggest benefit for companies that process a large volume of payments is the fact that a FreshBooks Select Plan could potentially save you money on your payment processing costs. If your credit card and/or ACH payment volume is high enough (you process a lot of credit card or ACH payments each month), you might be able to negotiate a lower transaction rate.
As a small business owner, anything you can do to save time on mundane tasks and free up time to generate a bigger profit is a win. Depending on the size of your business and how much time an accounting software feature might save you, a higher monthly fee could potentially be well worth the cost.
Naturally, you’ll have to crunch the numbers and make that call for yourself. But there’s some wisdom behind the idea that sometimes you need to spend money to make money—regardless of which accounting software you ultimately choose to get the job done.
Read below for an overview of just some of FreshBooks’ key features and functionality. If you do opt to use FreshBooks as a small business accounting solution, understanding which benefits you may or may not have access to with each plan can help you choose your best option.
If you’re still doing bank reconciliation manually, you’ll appreciate the fact that you can automatically download your bank transactions and easily categorize expenses in the software.
For small businesses that use vehicles for business activities, you can use the FreshBooks app’s mileage tracking feature to log miles, making it simple to input them when you file your taxes.
FreshBooks invoices can be customized with your company logo, payment policy, and forms of payments you accept. Speaking of payments, you can accept ACH, debit cards, credit cards, and PayPal.
Extra Charges for Collecting Payments
FreshBooks Payments lets your business collect payments directly from the invoices you send out. But there is an extra charge for those features.
- Online Invoice Payments: Payments made via invoices cost 2.9% plus $0.30 per transaction for most credit cards.
- Virtual Terminal and Recurring Payments: Want to set up a virtual terminal that gives you access to features like recurring billing and manual payments (over the phone or in person)? It will cost an extra $20 per month plus another 3.5% and $0.30 per transaction.
For freelancers that charge by the hour, having accounting features that allow you to track time and assign to a client are extremely helpful. With FreshBooks, you can easily create an invoice from the time you’ve accrued for a given client.
There’s little FreshBooks doesn’t do, but for features it doesn’t offer itself, there are add-ons (called integrations) that you can use to connect to other tools you use for customer support, ecommerce, marketing, payroll, and more. You’ll find integrations for brands like Stripe, Gusto, Outlook, Zoom, Bench, and others.
If there are others on your team who need access to your accounting, you can add team members so they can view and edit data in your FreshBooks.
Need financial reports like balance sheets or profit and loss statements? FreshBooks offers easy templates you can set up so you can keep an eye on your financial wellbeing.
FreshBooks offers a user-friendly mobile app, available on iOS and Android. Unfortunately, certain features (like reporting) are not accessible through the app.
Still, you can use the app to access dozens of other features, depending upon the monthly plan you’ve selected. Some of the app’s most popular features include:
- Creating and sending invoices
- Snapping pictures of receipts
- Tracking time
- Tracking miles
Is FreshBooks Safe to Use?
It’s natural that you should be concerned about a software platform having access to your sensitive financial data, including access to your business bank accounts and client payment details.
FreshBooks uses SSL, encryption, and firewalls to protect your data, and the company takes its duty of protecting your information seriously.
Pros and Cons
FreshBooks is a reputable software option that millions of businesses rely on every month. Many customers who sign up for the service enjoy the features and are happy about making FreshBook their accounting solution of choice.
However, that doesn’t automatically mean everything about the software platform is great. You should take some time to review the pros and cons of FreshBooks before you make a decision for your business.
|FreshBooks offers a free trial so you can play around with the software before you make a financial commitment.||The mobile app is limited and doesn’t allow you to access reports on the go.|
|The program has a user-friendly FreshBooks dashboard and interface that is easy to navigate.||The program reportedly doesn’t work well for larger or more complex businesses, such as those that need inventory tracking and vendor management.|
|FreshBooks has undergone several major updates in recent years to upgrade its software features for customers.||At least one of the recent software updates was reported to include a rate hike—a fact that made many existing customers unhappy.|
|FreshBooks is slightly less expensive than several other popular cloud-based accounting software programs.||Although FreshBooks costs a little less per month than some of its competitors, it also lacks some of the features these competitors offer.|
FreshBooks vs. QuickBooks
Although FreshBooks is certainly popular, it’s not the only accounting software option on the market for your small business. In the world of business accounting software, there are two options that consistently compete to be the software of choice for small business owners—FreshBooks and QuickBooks.
If you think a cloud accounting platform might be a good fit for your business, you’d do well to consider both of these options.
In North America, QuickBooks and FreshBooks hold the number one and number two spots, respectively, in terms of paying subscribers. Both platforms give small businesses the ability to streamline accounting, invoicing, payments, and much more.
So how does FreshBooks’ pricing plan stack up to the competition?
|FreshBooks Pricing||QuickBooks Pricing|
|Lite: $15/month||Simple Start: $25/month|
|Plus: $25/month||Essentials: $50/month|
|Premium: $50/month||Premium: $80/month|
|Select: Custom Pricing||Advanced: $180/month|
As you can see above, the price points of the products are similar, with QuickBooks plans coming in slightly more expensive than Freshbooks’ Lite, Plus, and Premium offerings. However, while QuickBooks does cost a little more, it has some added features that your business might want to consider before you make a decision. Click here to see
Nav’s full, side-by-side comparison of these two accounting solutions and find out if one of them is the right fit for your business.