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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