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Your Complete Guide to FreshBooks: The Cloud Accounting Software

By: // Updated: August 29, 2020

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Whether you’re a self-employed gig worker, freelancer, solopreneur, consultant, or small business owner, FreshBooks can help you manage day-to-day bookkeeping. This cloud accounting software allows users to manage a variety of tasks including income and expense tracking, invoicing, time tracking, online payments, project management, and much more.

In this guide, we’ll explain what FreshBooks is and take a look at its primary features. We’ll also review the pros and cons of this software and break down how much it costs, so you can determine if it’s the right accounting solution for you.


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What Is FreshBooks?

FreshBooks main site screenshot

FreshBooks is web-based accounting software (a.k.a. cloud accounting software) that you can access from a computer or mobile device. Co-founded in 2002 by CEO Mike McDerment, FreshBooks is headquartered in Toronto, Canada, with another office in Amsterdam.

The software service boasts that over 24 million people in more than 120 countries have used FreshBooks. Available on desktop as well as on Apple and Android devices, FreshBooks makes it easy for self-employed consultants, freelancers, gig workers (such as Postmates drivers or Amazon Flex workers), and small business owners to manage their finances directly through the app.

You can send invoices, handle expenses (including taking photos of receipts and instantly uploading them), track time on projects, communicate with clients, and organize a variety of financial matters directly from the FreshBooks app. It also has integrations with popular platforms like Slack, Asana, G Suite, MailChimp, HubSpot, Salesforce, and Trello.

How Does FreshBooks Work?

FreshBooks dashboard

You can sign up for a free 30-day trial on the company’s website (FreshBooks.com) and download it to your computer. You can also download it to your smartphone from the Apple App or Google Play Store. Once you do that, you’re able to access the FreshBooks dashboard, which will prompt you to enter your business details, customize the look, set up the items and services that you bill for regularly, and send a test invoice.

After entering your company information, you can connect your bank account and get it verified so you can accept ACH and credit card payments. You can also set up payments through Stripe if you have clients who don’t pay in U.S. or Canadian dollars.

FreshBooks offers two versions: Entrepreneurs and Teams. The former is designed for self-employed professionals while the latter is geared toward small business owners with multiple team members (such as subcontractors and freelancers you pay). If you’re not a one-person-show, you can add team members to your FreshBooks account and browse through the different features. Speaking of which, let’s review the platform’s main features.

Invoicing

FreshBooks has a robust suite of services when it comes to invoicing, including customizable invoices that let you add your logo, adjust the colors and fonts, and set the preferred language for specific clients.

Some other invoicing features include payment reminders, automatic sales tax calculations, recurring invoices that will be sent based on the schedule you set, and upfront deposit requests with every invoice. You can also set up automatic late fees for overdue invoices as a way to encourage clients to pay on time. You’ll get instant updates when an invoice has been viewed and paid.

Expenses

If keeping track of your business spending habits isn’t your strong suit, FreshBooks can be a lifesaver. Since the platform is connected to your bank account(s) and credit cards, you get the most up-to-date picture of your expenses. You can also say goodbye to that haphazard pile of paper receipts.

With the FreshBooks mobile app, all you have to do is take a photo of your receipt (whether it’s for a business lunch, office supplies, or client product) and log it in its proper category. Then, when tax time rolls around, you can spare both you and your accountant the headache of trying to figure out what you did all year.

Payments

With FreshBooks, clients can pay you directly through invoices and the app keeps a record of each payment in your account. However, these conveniences come at a cost. For each payment you receive, there is a transaction fee. This is in addition to the amount you pay for your monthly plan. Transaction pricing is as follows:

  • Credit cards (Mastercard, Visa, Discover, ApplePay): 2.9% + 30 cents per transaction
  • ACH: 1% bank transfer fees

Projects

While you can certainly use the Projects feature if you work alone, it’s really designed with the small business owner in mind. You can invite and collaborate with clients, employees, contractors, or business partners, create and track the progress of various projects, set due dates, upload and share files, offer feedback, and receive and pay invoices.

Estimates and Proposals

When it comes to creating and submitting proposals to clients, FreshBooks makes the process seamless. Instead of toggling between apps, email, or other software, you can create, customize, and send off your proposal straight from the app. Then, once the client accepts the proposal, you can instantly convert it to an invoice and get paid faster than you might have otherwise. And just as you can customize your invoice template, you can do the same for the estimate template so your brand always looks professional.

Accounting

FreshBooks’ accounting tools have improved over the years to provide reliable data to calculate your profits and losses. You can give your accountant access to all necessary reports and documentation so you minimize the risk of errors when it’s time to file your taxes.

How Much Does FreshBooks Cost?

FreshBooks pricing is reasonable when it comes to accounting mobile apps. The cheapest plan is the Lite package, which is $15 per month and allows up to five billable clients. The Plus package is $25 per month and allows up to 50 billable clients. The Premium package is $50 per month and allows up to 500 billable clients. The final package is Select, which offers custom pricing for businesses that have more than 500 billable clients.

Pros of FreshBooks

FreshBooks sign up page

As you can see, there are many features that FreshBooks offers. Here are some of the top reasons for using this platform.

  • Ease of use — Creating new invoices is easier (and more professional-looking) than using Excel, PDF, Word, or Google Docs
  • Quick payment — You can get paid faster thanks to credit card and ACH payment integration
  • Risk-free trial — Free 30-day trial requires no credit card, allowing you to try before you buy
  • Great reputation — FreshBooks has a 4.45 out of 5 stars rating on the GetApp review site
  • Versatility — Multi-currency billing lets you send invoices in whichever currency you and your client prefer

Cons of FreshBooks

While there are plenty of upsides to FreshBooks, there’s always room for improvement. Here are some of the most common drawbacks mentioned by reviewers.

  • Limited services — Offers some payroll integrations and basic inventory tracking but not a full suite of services that would benefit more complex businesses
  • Expensive — Pricing can be steep (and added services aren’t wow-worthy) as you upgrade the number of billable clients, and credit card and ACH transaction fees can add up
  • Slow — Load times can lag when you have large quantities of information

Frequently Asked Questions

Person entering numbers on calculator with pencil in hand

Now that you better understand FreshBooks, it’s time to get answers to some of the most common questions.

1. Is FreshBooks better than QuickBooks?

Yes, if you don’t have a staff. Although FreshBooks has an “entrepreneur” and “team” version, most FreshBooks reviews agree that the software is better suited for gig workers, freelancers, and solopreneurs who don’t have employees. For one thing, it offers limited payroll integrations, which would be a big convenience for small business owners. On the other hand, QuickBooks seems to be a stronger solution for small businesses that have multiple team members.

2. Why would someone use FreshBooks?

If you need help with finance-related tasks like invoicing (receiving or sending), payment processing, tax calculations, and keeping records, FreshBooks is a simple and reliable solution that you can easily access on your smartphone or computer. For a monthly fee, it allows you to stay organized in less time than it would take you to oversee these different bookkeeping tasks a la carte.

3. Is there a free version of FreshBooks?

There’s no permanent free version, but you can sign up for a 30-day free trial. No credit card is required, simply provide your email address, create a password, and give it a whirl. Within a month’s time, you should be able to determine if it’s a good fit for your needs.

FreshBooks: It’s Time to Get Your Accounting Needs Handled

If you’re a one-person-show or micro-business owner looking for a straightforward accounting software system that doesn’t have a huge learning curve — and lets you access it and manage it on the go — then FreshBooks could be for you.

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