FreshBooks is a small business accounting software that is designed for the business owner that isn’t an accountant. They try to simplify how you manage your expenses and help you create professional invoices. They also cater to multiple industries including consultants, legal service providers, home services, IT professionals and even creatives. Over the past few years they have added on a lot of new features, which means their pricing has equally increased. That being said, they are still a good foundation for those that want affordable, simplified accounting.
A cloud-based accounting program designed for small businesses that want to cut out the need for an accountant each day.
- User Friendly
- Invoicing and Payments in One
- Time Tracking Included
- Integrates with Third Parties (PayPal, MailChimp, Basecamp, etc.)
- 30-Day Free Trial
- Mobile Apps
- Snail Mail Invoicing
- No Tax Assistance
- No Payroll
- Not Ideal for Large Companies or Companies with Employees
- No Inventory Tracking
- Limits on Invoices/Clients
- High Price Per Month
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Scoring and Rating
Accounting and Business Tasks: (Rating: 8/10)
FreshBooks definitely satisfies the requirement for basic accounting tasks. It helps you track expenses and income with ease and you can even sync up your bank account so that transactions are automatically imported. If you input rules, those same transactions will then be automatically categorized to save you even more time.
Some other accounting features they have include time-tracking for billable hours, assigning expenses to clients for better tracking, expense reports, mobile receipt logs, etc. You cannot make payments to vendors or track vendors in FreshBooks though – something we hope they add in the future.
There are quite a few reports you can choose from on FreshBooks, but their usefulness will depend on your industry.
Invoicing: (Rating: 9/10)
FreshBooks definitely offers invoicing and lets you create professional-looking invoices, add your logo and customize so that they are easily recognized by clients. Invoices can then be emailed, sent via snail mail and even downloaded as a PDF.
Most importantly, FreshBooks lets you collect payments straight from the invoice – instead of being transferred to a third party. You will pay through FreshBooks to accept payments, but this convenience is great for customers and businesses alike.
FreshBooks also lets you know when a customer has viewed the invoice.
You can create multi-currency invoices for no added fee and create automatic recurring invoices and even bill customers’ credit cards on a recurring basis through FreshBooks. Multiple tax rates are also supported in the system.
You can create an estimate and then quickly transfer it into an invoice as well.
The only drawback to FreshBooks is that they limit how many clients can be billed with their service. The Sprout account is limited to just five clients per month (but you can still send unlimited invoices to those clients) and the Seedling account is limited to 25 clients per month (with unlimited invoices to those 25 clients).
Management: (Rating: 7/10)
Management is a 50/50 with FreshBooks and in a way, it seems they add features that don’t necessarily complement anything. For example, you can add staff, track their time sheets, assign them to projects and clients, but you cannot pay the staff or do any type of payroll. So you’d have to export the timesheets and everything else to a third party app or new payroll program.
You cannot manage vendors, pay vendors or manage purchase orders. Also, FreshBooks doesn’t have any type of inventory monitoring.
You can create projects and tasks and then share those with staff – and you can also use those to create a timesheet and automatically generate an invoice.
You can integrate your FreshBooks into a POS or ecommerce software as long as its compatible with FreshBooks – and most are. They also offer project management; to an extent. You can enter projects and assign clients and staff, but when it comes down to tasks within that project, FreshBooks isn’t in-depth enough.
You can manage your clients and contacts via FreshBooks and even specify if a client uses email or snail mail for invoicing and other communications.
Once you have added staff and contractors in the People section, you can also assign those clients to certain employees – for better management.
Ease of Use: (Rating: 8/10)
FreshBook’s interface is rather clunky and awkward. While they do have step-by-step tutorials when you first sign up – which basically guide you through every step to complete your account – the overall appearance and multiple menu options can make it extremely confusing at first glance. Other accounting programs have simplified how you access your data or even create the account – and considering the price, you’d think FreshBooks would figure that out by now.
That being said, the walkthrough guide does make it easier to setup and there are much worse programs out there in terms of usability.
Access: (Rating: 10/10)
FreshBooks is cloud-based, so you can access them from anywhere. You can use your desktop computer, laptop, iPhone, iPad, or even an Android phone. Data is secured using bank-level encryption and they secure customer accounts.
You can also create a client login and accountant login so that they only access what they need (such as their invoices or certain files). Depending on the account, you can setup staff members to also access the system.
Taxes: (Rating: 6/10)
Tax assistance is almost non-existent with FreshBooks. While you can keep income and expenses organized, that is the extent of their tax assistance. You cannot do payroll, file payroll taxes or create W2s and 1099s. You cannot prepare a Schedule C or even prepare/file business taxes through FreshBooks. Accountants can be granted access if you have a higher paid plan, otherwise you can download and send the file to your accountant.
They do offer profit/loss reports, tax summaries and balance sheets that you can print and use to file taxes with – which will at least help at tax time. Hopefully in the future they can add a few more tax-assisting features.
While there are plenty of programs that don’t offer tax assistance, it is the monthly price of FreshBooks combined with their lack of tax-helping features that brings them down a little. Had they made their service more affordable, then it wouldn’t be as big of an issue that they weren’t tax-helpful. But, there are plenty of other programs out there for the same or cheaper price and still can help with preparing Schedule C’s, estimating tax payments, etc.
Pricing: (Rating: 7/10)
Price-wise, FreshBooks is definitely on the pricey side of things. Considering they don’t offer inventory tracking or tax-specific options and you cannot add on payroll, you may feel as though you’re paying a little too much. That being said, they offer time-tracking and integrated payments – which could make up for the cost of the program.
FreshBooks does come with a 30-day free trial. After that, you select which plan you want and if you want to pay monthly or annually. The price per month goes down if you pay upfront annually.
There are four tiers with FreshBooks: Sprout, Seedling, Evergreen and Mighty Oak.
Sprout is their entry-level that starts at $12.95 per month ($11.66 if paid annually), but this level comes with limitations, such as only five clients can be billed per month.
Seedling starts at $24.95 per month ($22.46 on annual plans) and you are limited to billing 25 clients per month. Evergreen is $39.95 per month ($35.95 per month on annual) and Mighty Oak is $79.95 per month ($71.96 if annual).
There is an additional fee to collect credit card payments straight through FreshBooks, which is 2.9 percent plus $0.30 per transaction. The funds you receive will automatically deposit into your business bank account in about two business days and payment fees are automatically added into the system for easier tracking.
Customer Service: (Rating: 9/10)
FreshBooks talks about their award-winning customer service, though we don’t necessarily know how true that is. That being said, they are there to help their customers when they need it. They offer tutorials, guides and when you need to contact a real person, you can via phone or email. They aren’t 24/7, which may be an issue for businesses that operate out of the usual business hours. They also don’t offer live chat at this time.
FreshBooks currently has an A+ rating with the BBB.
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Regular Pricing(after intro): Sprout $9.95/mo, Seedling $19.95/mo, Evergreen $29.95/mo, MightyOak $39.95/mo
Free Trial: 30 Days
Score Based out of Total of 10
# of Users Per Account
# of Clients/Customers
# of Invoices
Basic Accounting Features
Can Import Bank Transactions
Estimates or Quotes
Converts Estimates to Invoices
Credit Card/Paypal Processing: Added Fee
eCommerce or POS Compatable
# of Built in Reports: not specified
Provides Employee TimeSheets
All (Cloud Based)
Mobile Expense Tracking
Mobile Time Tracking
Help and Support
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What Type of Business Could Use This Software?
FreshBooks advertises itself to freelancers, independent contractors and small businesses – and this is about all they can accommodate. That being said, most companies with employees may find the limited payroll options and management not worth the monthly cost of FreshBooks. Also, companies that need to track inventory – whether they are a one-person show or small business – will not be able to do so with FreshBooks. We recommend FreshBooks for independent contractors and freelancers or small businesses that have just one employee.
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FreshBooks offers a 30-day free trial.
Sprout: Unlimited invoices, time tracking, expense tracking, mobile apps, client portal, innovative invoicing, accepting payments through FreshBooks, phone and email support, and free updates. Limited to just five clients per month. Starts at $12.95 per month or $11.66 per month if paid annually ($139.92 per year).
Seedling: Includes features of the Sprout account, but limits increase to 25 clients. Starts at $24.95 per month or $22.46 per month if paid annually ($269.52 per year).
Evergreen: Includes features of the Sprout account, but you can bill up to 250 clients, add one staff member, create team timesheets and track expenses by staff members as well. Starts at $39.95 per month or $35.96 per month if paid annually ($431.52 per year).
Mighty Oak: Includes features of Sprout account and has unlimited client billing. Can add up to five staff members, use team timesheets and track expenses and profits by staff members. Starts at $79.95 per month or $7.196 per month if paid annually ($863.52 per year).
Credit card processing fees are 2.9% plus $0.30 per transaction (unless using a third party app).
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What We Like About FreshBooks
Know When Invoices are Viewed: It can be hard to send out invoices and then wonder if clients are even bothering to look at them. With FreshBooks, you will be notified when an invoice is viewed – so you know when clients see what’s due.
Accept Credit Cards in the System: Most programs require you to add on a third party app or pay for their special credit card processing, but with FreshBooks you can link to your PayPal account and accept payments instantly right through FreshBooks. This is convenient because you will only have to send one invoice and the client can pay through that invoice rather than being transferred to another site – simplifies your accounting too.
Multi-Currency Support: Most programs require you to pay for a highly upgraded version or simply don’t support multiple currencies. FreshBooks doesn’t limit you – which is helpful if you have clients in other countries.
Integrated Time Tracking: FreshBooks is one of the few to offer time-tracking inside their program. This is perfect since they also cater to freelancers and independent contractors and most of these types of individuals need time-tracking.
Private Client Portal: A really unique feature to FreshBooks that we have to point out is the client portal. This is something that is uncommon with most accounting programs, but definitely a convenience. You can establish a username and password for clients and they can login to their own portal to find estimates, outstanding invoices, etc. You can also set permissions and see when their last login was.
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What We Don’t Like About FreshBooks
Limitations: FreshBooks is another online accounting program to limit how many clients/invoices you can send. While you can send unlimited invoices, you are limited to billing just five clients. Because FreshBooks advertises to small businesses and freelancers, most will find the more affordable plans useless – because most of these businesses will have more than five clients they need to bill. Even the next tier, Seedling, limits you to 25 clients per month. You cannot add a staff member to the account until Evergreen level and you are restricted to 250 clients (though most may have no issues with that).
No Payroll: FreshBooks lets you track employee timesheets, add managers, track contractors, manage team expenses, etc., but they don’t offer payroll through the software – which is a little disappointing. You can, however, add payroll through Gusto via their third-party app process, but their prices are on top of the price for FreshBooks.
High Monthly Prices: FreshBooks does have a lot of conveniences, but they also have some steep pricing. Some companies may find the prices too high especially just for managing employees and not offering payroll or other services.
No Estimated Tax Payments or Schedule C: FreshBooks caters to freelancers, which is why they offer time-tracking, but they seem to neglect Schedule C’s and estimated quarterly tax payments – something freelancers need. They do not estimate taxes like other freelancer-friendly software programs and they don’t automatically prepare a Schedule C or have their expenses setup to automatically fill out a
Schedule C – which is something to consider for convenience.
Limited Tax Help: For the price, you would expect FreshBooks to make taxes easier, but the only way they do that is by organizing and categorizing expenses. From there, you’re on your own at tax time.
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FreshBooks is one of the few accounting programs to offer time tracking and even the ability to monitor employee time and revenue in a single program. While they lack more complex features, it may be all a single business owner needs.
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