FreshBooks Review: Features, Pros, Cons

What Is FreshBooks Accounting?

FreshBooks is a simple cloud accounting software that allows you to invoice clients, track expenses, and accept payments via credit card and bank transfer. It includes functionality for time tracking, project management, and accounts payable and receivable. FreshBooks allows you to track sales tax and generate summary reports.

Our Ratings

Who Uses FreshBooks Accounting Software?

We recommend FreshBooks for freelancers and independent contractors in the service industry. Solopreneurs and microbusinesses with 2-5 employees will benefit from the software’s streamlined approach to invoicing and billing. FreshBooks is accessible for non-accountants, using plain language to describe financial processes and simplify invoicing, expense tracking, and reporting.

FreshBooks Invoicing

We like that FreshBooks allows you to enter data directly into the invoice template without navigating to a separate window or screen to preview the final look. You can click the Settings icon to indicate whether you want to accept online payments, make the invoice recurring, or customize the style.

You can choose from three default invoice templates with six theme colors, two font types, and the option to upload your logo in GIF, JPEG, PNG, or TIFF format.

Here’s how to create an invoice in FreshBooks:

1. Click on Invoices in the left menu.
2. Select the + New Invoice card on the Invoices dashboard.
3. Choose a client (or + Create a Client) and update your issue date and due date.
4. Add a unique invoice number.
5. Click the Add a Line button to Import Unbilled Time and Expenses, add an existing Item or Service, Create a new Item, and Add Taxes.
6. Add a Discount, Apply Credit, Request a Deposit, or Add a Payment Schedule in the Subtotal and Total Areas.
7. Click the Save button to create a draft or the Send To… button to invoice your client by email or generate a link to share.

Billing in FreshBooks

Like the invoicing process, generating a new bill in FreshBooks is as easy as clicking and typing. You input data directly into a bill template and can easily attach receipts and other documents. You can click the Settings icon to indicate your preferred language and currency, including USD, CAD, EUR, etc.

We like that FreshBooks displays your total outstanding and overdue in a clear and eye-catching way on the Bills dashboard. Most people using FreshBooks are not accountants, so avoiding jargon and concisely presenting information is vital. We also like that you can upload your bill in JPEG, PNG, or PDF formats directly into the system.

However, we would like to see a way to add Vendor billing and contact information directly from the New Bill template. As it is now, you can only input the Vendor’s name. However, you can always revisit your Vendors later to add more profile details.

Billing in FreshBooks looks like this:

1. Click Expenses in the left menu, then click the Bills option.
2. Select the + New Bill card on the Bills dashboard.
3. Click Add Vendor to type in a new company or choose from a list of previously-entered vendors.
4. Specify the Issue Date, Due Date, and Bill Number if needed.
5. Select the Add a Line button to enter details about your bill in the Description field.
6. Add a Category, specify the Rate and Quantity, and Add Taxes.
7. Click the Save button.

FreshBooks Time Tracking

FreshBooks benefits consultants by allowing them to track time and billable minutes easily. In time tracking settings, you can establish whether you want to track time entries by duration or by start and end time.

A built-in timer allows you to assign a client or project, add a service, and describe your work. You can also log time manually.

1. Click Time Tracking in the left menu.
2. Select the + New Entry button.
3. Choose a client or project in the Add a client or project field or start typing to Create a New Project or New Client.
4. Select the Add a service field to add a previously-entered service or type to add a new service.
5. Enter billable time in the HH:MM field.
6. Input the date and add notes if necessary. The billable checkbox is automatically checked.
7. Click the green checkmark button to commit the tracked time to your records.

This entry will display on your Time Tracking dashboard as unbilled. You can click the Generate Invoice button at the top of the page to invoice your client for your time.

What Features Are Missing?

• Reporting customization: FreshBooks offers standard accounting reports like the balance sheet, profit and loss, cash flow statement, general ledger, and bank reconciliation summary. However, filters to customize reports only include date range and account type.
• User access: FreshBooks might not be for you if you have multiple employees on your accounting team. It limits you to one user in all plans except Select tier, which allows for two. Each additional team member you add to FreshBooks incurs a $10/month charge.

FreshBooks Pricing

FreshBooks vs. QuickBooks Online

FreshBooks, starting at $17 per month, is more affordable than QuickBooks Online, which begins at $30 per month. However, QuickBooks’ Advanced plan supports up to 25 concurrent users. FreshBooks only permits one user, charging an extra $11 per month for each additional team member. FreshBooks is well-suited for solopreneurs and microbusinesses of two to five employees, whereas QuickBooks’ more advanced features best serve small to mid-market companies with 50 to 200 employees.

Is there a FreshBooks payroll feature?

FreshBooks does not have a module for built-in payroll processing, but you can integrate a third-party add-on like Gusto. Gusto is a comprehensive platform that includes hiring, onboarding, and compliance support. Additionally, Gusto can handle quarterly 941 filings and annual W-2s and 1099s.

Can FreshBooks connect to your bank account?

FreshBooks connects with over 14,000 different financial institutions, including Bank of America, Chase, Citibank, PayPal, and Wells Fargo. Linking your bank account is as simple as clicking the Settings icon and selecting Bank Connections. From there, you choose your bank and enter your login credentials. Finally, select the account you want and click Import.

Does FreshBooks handle taxes?

FreshBooks tracks sales tax and helps you reconcile 1099-K forms with your earnings. However, FreshBooks does not track income tax. Instead, your accountant can calculate this using the journal entries in your chart of accounts.

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What We Like

Customizable invoicing

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Basic inventory management capabilities

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Summary

We recommend using FreshBooks if you’re self-employed, a consultancy, or a microbusiness in the service sector. FreshBooks creates a direct pipeline from converting proposals and estimates to invoices and projects.

However, if you are a fast-growing company, there might be better options than FreshBooks. Limits on billable clients and users can be particularly problematic for businesses with multiple employees.

If your company plans to remain relatively small, it’s hard to beat the simple, comprehensive package of features the software has to offer. Overall, Freshbooks is a smart, affordable choice for small business owners new to accounting.