Review #3: Freshbooks

Freshbooks was not intended to be an accounting system. Freshbooks still claims to not be an “accounting package” although it allows you to produce a profit and loss statement for your business by entering non-billable expenses as well as billable expenses into the system (in other words, you can track all your expenses, not just those you want to flow through an invoice).┬áIf every sale you make is invoiced through Freshbooks, then you already have your complete income into the system and bingo, a complete profit and loss to help you prepare your Schedule C.

Goal: Invoicing, billable time and expense tracking, team time tracking and management and multiple currency support.

Pros:

  • Intuitive, user-friendly interface
  • Many integrations with other applications such as Outright
  • Non-billable expenses can be entered to make a profit and loss suitable to compile a cash basis Schedule C, but this is clearly not a focus of the application, just something you could do with it
  • Expense transactions can be imported from Expensify, Xpenser, Shoeboxed, or Expense Cloud (recommended to import billable expenses only)
  • The invoices produced are very professional and uniform even on the free account
  • Creation of estimates to help you plan the project
  • Able to accept payments online

Cons:

  • Really encourages only billable expenses reported on invoices for input – the profit and loss report, should really be renamed the gross profit report
  • Itemizing and billing expenses in this way may make you look petty (nickel and dime the client to death), but if you are involved in litigation or governmental contracting, this detail could be great
  • No cash reconciliation, must be performed outside the system
  • No way to record expenses in a way that doesn’t impact the profit/loss statement (for capital expenditures or personal draws)

Freshbooks doesn’t really want to be your sole accounting system and has no intention of addressing any of the basic accounting system functionality it lacks. However, if the choice is between this and a box of receipts, I’d much rather see this and it also helps you get paid. Excel might enable you to produce a similar profit and loss, but it won’t email invoices to your clients with a PayPal PayNow button.


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Comments

  1. Shane, thanks for the informative review. Another great feature is the integration with Google Apps. As a frequent Google Apps user, the ability to use a single sign-on and being able to access Freshbooks from the Google menu bar is a great convenience for me.

  2. I like the iPhone app for invoicing on site. I can go to the client and fix their QuickBooks or deliver their tax return, get their check or credit card payment (also on my phone using Square) and produce an email invoice marked “Paid” on the spot. Instant gratification and no A/R.

  3. Shane, this was a great review. We like the product too, and put sole proprietor’s in the package. We just did a sync of Freshbooks and Authorize.net for a client in TX and it looks awesome! Works seamlessly. Haven’t hooked Outright to Freshbooks yet – I guess that works seamlessly too?

  4. @Dustin – Does this integrate if you have a Google account or only if you have a Google business account?

    @Mariette – That type of functionality is pretty cool and I bet also impresses clients with your upfront tech savvy.

  5. Thanks for the great post, Shane!

    To answer your Google integration question, I went straight to the pro here at FreshBooks (Pete, our Integrations Business Manager). He said that you need a Google Apps for Business account to link up with FreshBooks. If you’d like more details, just give me a shout.

    Thanks again, and love the blog! Talk to you soon.

  6. @Jason – The Freshbooks integration with Outright is pretty solid from the personal testing that I have done. I don’t have anyone using it on a daily basis.

    @Kasey – Thanks for the compliment and checking into that for me!