Freshbook Review: Should I Use it For Accounting?
Since I started my business, it has been more than 10 years. FreshBooks has been my invoicing and bookkeeping solution for the past 9+ years. It’s also the company that my Resources page readers most frequently ask about. Because of this, I decided to convert the emails into a complete FreshBooks review.
Three bosses from 3 different companies have told me variations on the same phrase. “If it feels boring, it’s not your fault.” Or “If you work hard, it’s probably the wrong tool.”
Invoicing and bookkeeping, while not technically necessary for marketing or improving the website of your clients or yourself, are important. It does take up your attention and time. It can also be a time-sucker.
In 2012, I was running a web design and marketing agency that I had started in 2012. I spent way too much time trying to keep costs low while still looking professional and legitimate. I was using PayPal’s free invoice feature, and Google Sheets. It was a mess. It was a mess. So I began to search for a resource for bookkeeping, invoicing and a little bit of accounting.
I started using FreshBooks. I have never used QuickBooks, or compared FreshBooks to QuickBooks. It was too feature-rich (and $$$)) at the time. Despite the fact that my career has changed and my business has grown, I haven’t quit FreshBooks.
View the current plans and pricing at FreshBooks
BTW, I tried it out by signing up for a trial and then clicking around. You can check out the FreshBooks free trial and plans.
FreshBooks is not for complicated tasks. It is used to:
- Send invoices to clients or advertising partners, and keep track of their accounts.
- Manage and track your expenses.
- Basic accounting (aka looking at P&L statements & Schedule C documentation).
- Communicate with your accountant in a simplified way
I used the older FreshBooks Classic for a while. Now, I have fully switched to the FreshBooks platform.
Here’s my FreshBooks review, with pros and cons. Although it is not recommended for everyone, it is not intended to be.
The benefits of using FreshBooks
Before I go into details about what I love about FreshBooks here is the main benefit that outweighs all others:
FreshBooks cut down my time in creating, filing, tracking, and tracking expenses. It took me 30 minutes per client. This was a significant improvement over the previous 30 minutes. That is a lot of time if you value it at your hourly rate.
Whatever bookkeeping platform you choose, I would use this rule as my gold standard. These are the main pros and cons of FreshBooks.
User-Friendly
FreshBooks is a web-only, trendy software. It has a simple and user-friendly design. It’s colorful. It is full of personality.
The new version is easier to use than the Classic version (where my screenshots are taken from), but FreshBooks has always been easy to use since day one.
It features large green buttons and a well-thought out user interface. It doesn’t have a lot of features, such as a desktop-based program.
This is the main dashboard.
My time is spent clicking through invoices. 10% goes to Expenses and 10% to Reports.
Here is an example of a standard invoice screen.
There are many options. You can fill in pre-filled fields. It is convenient to set rates and billing items in advance. A 1-hour consultation costs $200. I simply select the client from the drop-down to bill them. Click Consultation, then click Send.
You can line-item if you so desire. All items are pre-filled and not locked down or defined.
This is the Client screen.
You simply need to enter the information of a new client when you create them.
A quick reminder: FreshBooks’ plans will impact your client count. If you have many small clients and want to keep them on the lower priced plans for a longer time, it might be worth hacking FreshBooks to create a general client. That will be covered in the pros.
FreshBooks is easy to use and has a short learning curve. To get started and gain value, you don’t have to take a course.
This is a big pro for me.
Integrations
Each business has its own unique requirements and needs. FreshBooks doesn’t claim to be able to meet all business needs. They have been trying to quickly grow beyond their initial wheelhouse of freelancers who bill hourly.
FreshBooks is able to easily integrate with any number of platforms, payment systems, or even third-party users.
FreshBooks offers a flexible API that allows it to “talk” with many other software. This includes time tracking software, eCommerce (like WooCommerce), payroll (like ZenPayroll) and help desk software.
You can also add many internal add-ons such as project tracking to your FreshBooks setup, depending on how simple or complex you want it to be.
I love how they integrate with PayPal. It’s easy to collect invoices because most people are familiar with PayPal and feel secure using it. FreshBooks has its own payment gateway, so you can easily collect credit or debit via FreshBooks (minus any transaction fees).
Third party integration, also known as the invite your accountant functionality, is the last one I like. FreshBooks can do basic accounting but it cannot build your tax strategy or other strategic accounting plans. However, they recently introduced integrated payroll.
Traditional discussions about tax strategy would involve gathering lots of documents and giving your accountant an incomplete view of your business. This is a waste of everyone’s time.
FreshBooks’ Invite Your Accountant functionality allowed my accountant to have quick remote access and also access all the relevant documents in the correct format. It’s time-saving for everyone.
I can summarize FreshBooks’ integrations as giving me flexibility while keeping the overall software simple.
Customizations
Another pro is how easily FreshBooks allows customization.
As I said in the introduction, I came to FreshBooks using a mix of PayPal’s free invoice software and Google Spreadsheets.
It wasn’t only messy, it also didn’t look very professional. It worked in hindsight but I was still a “freelancer” rather than a “consultant”. PayPal allows you to add your logo but it still looks like PayPal.
FreshBooks invoices are customizable and can be customized to look professional.
The customization extends beyond that. As I have mentioned, you can modify all pre-filled sections of the invoice. You can also customize the expense categories and rules. You can customize the invoice creation process with the integrations.
Cons of using FreshBooks
Apart from a few trial runs of competitors (see next in Next Steps), my experience with different bookkeeping platforms is not broad. Even though FreshBooks has been a good fit for me, there are some things that make FreshBooks less appealing to everyone.
FreshBooks Pricing
The biggest problem with FreshBooks is the pricing. Yes, it’s reasonable. It’s a worthwhile investment.
The monthly fees for functionality you can get for free or less can add up quickly.
Side note FreshBooks offers a free invoice generator for one-off projects.
The pricing structure of FreshBooks is very simple. However, it depends on how many clients. You will be placed quickly in the Plus Tier of $25 USD per Month if you are a freelancer, or a business that receives projects from many clients.
$25/month is a good price to save if you’re still starting out. I did the same thing when I was working as an agency and had to scale down my business. Although I didn’t quit, I deleted all client contacts and created an editable, generic “Advertising Partner” account to track the revenue from my website projects (not clients). For my few clients, I did the exact same thing. This put me in the $15/mo category.
However, $25/mo is acceptable if you work with many clients who are well-paid. Based on the time saved, it’s quite reasonable. But if you are getting established or doing work with lots of clients with small individual invoices…FreshBooks’ pricing is a con.
Bulk Editing and Creation
Another problem I am still trying to resolve is bulk invoice creation within FreshBooks.
I often have more than one invoice to create at any given month. Because the amounts and projects involved are unpredictable, I cannot set them up as recurring invoices. They are not tied to any “trigger”, such as a purchase of a website, that I can set up to generate an invoice automatically (something I am currently working on).
In either case, each month I must click on the invoice to be created manually. It’s impossible to create multiple invoices or open them in different windows. Each one must be created individually.
Ironically, if there was a trigger or some other way to sync with API, it would be very simple. FreshBooks is a little awkward in the middle. There are many custom-ish invoices that I have to manage at once.
This was the reason I had to go back to the Classic version when it came time to file taxes. Although the new version makes it easier to enter expenses and invoices, bulk execution was too difficult at the time. Their customer feedback team claims that they have resolved this issue for users such as me, but I haven’t yet pulled the trigger to upgrade.
One-offs
FreshBooks has some unique cons as well. If they happened only once, I would consider them bugs. They usually happen once in a few months so I will include them here.
Click-through emails don’t always work
Invoices are sent to clients every few months. It is viewed by them (something cool about FreshBooks: a client can’t claim they didn’t see your invoice). Then they click through to make payment… and it crashes.
It’s not something I can recreate. It has happened with many clients, and with clients I trust and who have used FreshBooks. It can be quite annoying when it happens.
Automated expenses aren’t exactly right
FreshBooks can sync with your bank or credit card company to automatically pull expenses. You can also create rules and customize categories. FreshBooks also attempts to automatically tag expenses …. but it is not very smart.
This issue can be solved to some extent with rules. However, editing expenses will still be a manual task that is just as tedious as a spreadsheet.
FreshBooks Pro Tips
These are some of the things I have learned over the past 4+ years in order to get more from FreshBooks.
Track advertising revenue with Other Income
Many freelancers will be able to have side projects that generate ad revenue through Google AdSense, affiliate partnerships or ad purchases. Everything was created as a client in the old FreshBooks. I used my information to create the partner.
When I receive a payout, I save and create a draft invoice. Open the invoice and mark it paid in full. You will see the revenue in your books just as if they were invoiced for fees you have paid. This is a reverse invoice system.
FreshBooks allows me to use only the Other Income tab.
Keep a copy of the invoice you receive in case you need it. This is a bookkeeping trick and not a professional one.
All your projects should be pre-filled
This feature was something I underestimated for a while in FreshBooks. You can do a service at a fixed rate, but you can add it to FreshBooks. It is then possible to select the service when billing a client.
To identify small projects, keep a generic “Client” and use the Invoice label.
FreshBooks prices are based on how many clients you have, as I said in pricing. Here’s how I save money if you have less than 25 clients and some miscellaneous projects. You can add a client to the “Project” placeholder. You can edit the “client” and re-use it for miscellaneous tasks. Use the description label when you complete the invoice to identify and distinguish clients.
Next steps
My experience with freshBooks was great. It’s not perfect, and it’s not for everyone. I recommend:
- Write down what you want, how many clients, and what your current bookkeeping process is.
- Register here to get a free trial (they do not require a credit card).
- Spend 15 minutes looking around. It’s likely that you will quickly see if they’re what you are looking for.
View the current plans and pricing at FreshBooks
If you are looking for alternatives to FreshBooks I have heard many about –
- InvoiceNinja I love all things open source & self-hosted.
- Sage A new startup receiving a lot of attention.
- QuickBooks is the brand in this space. Their platform was recently redesigned to be hosted in the cloud.
- Invoicera — Another one I tried.
Whatever your decision, spend less time on bookkeeping and more on marketing and improving your website.
