Overview – Xero

Originally designed as an invoicing tool, FreshBooks has evolved into a comprehensive double-entry accounting solution tailored for service-based small and medium-sized businesses (SMBs). It features an intuitive interface, one of the best among accounting applications, along with improved reporting, time tracking, and performance capabilities in its latest version.

How it works?

FreshBooks offers an intuitive setup process, guiding users through a series of business-related questions to tailor the experience. Similar to its competitors, it encourages early integration with online banking to provide immediate financial insights. Users can access support through phone, chatbot, and email for assistance.

After setup, the dashboard presents six charts summarizing key financial data. Users have the option to customize the display by reducing content if desired. While a list of account balances would be a useful addition, the dashboard still allows users to explore detailed transactions and forms by interacting with the text and graphics.

Plans and Pricing

FreshBooks offers four different plans, allowing businesses to choose the best fit based on their size and operational needs. The first three tiers come with a free 30-day trial. All plans can be integrated with Gusto or SurePayroll for payroll management.

Adding extra team members—such as Admins, Contractors, Employees, or Managers—costs $11 per month per user, though accountants can access the platform for free on all plans except the Lite version. However, the per-user pricing may feel steep compared to competitors that include multiple users within their base subscription fees.

Lite

Price: $19 per month or $228 per year

Best for self-employed individuals, this plan supports up to five billable clients and offers unlimited customized invoices and expense entries. Users can send unlimited estimates, accept online payments via credit card and ACH bank transfers, and automate bank imports. Additional features include unlimited time tracking, the ability to add billable hours to invoices and rebill expenses, as well as tax reports and sales tax tracking. Mobile mileage tracking is also available, making it a comprehensive solution for freelancers and independent contractors.

Plus

Price:$33 per month or $396 per year

Tailored for small businesses, this plan builds upon the Lite version by accommodating up to 50 billable clients. It features automatic expense receipt scanning via the mobile app, as well as double-entry accounting reports and business health reports to enhance financial tracking. Users also benefit from recurring billing, client retainers, and exclusive access for accountants. Additionally, bank reconciliation tools streamline transaction management, ensuring accuracy in financial records.

Premium

Price:$60 per month or $720per year

Designed for expanding businesses, this plan includes all the features of the Plus version while offering support for an unlimited number of billable clients. It also provides customized email templates and signatures, tools for monitoring project profitability, and the ability to track accounts payable for better financial management.

Select

Price: Custom

Tailored for businesses requiring dedicated support, this plan includes all the features of the Premium version with added benefits. It provides access for two team members, an exclusive support phone line for Select subscribers, and personalized training sessions. Additionally, businesses can accept credit card payments both in person and over the phone while benefiting from lower transaction rates. Client emails can also be sent without FreshBooks branding for a more professional appearance.

Tools and Features

FreshBooks provides most essential sales forms, including invoices, quotes, billable time records, and statements, though it lacks sales receipts and sales orders. However, it offers unique options like retainers and proposals, which allow users to formalize and enhance quotes. The software streamlines workflow by automatically converting completed forms into related ones, such as turning estimates into invoices or linking them to projects. Users can customize their documents by selecting from three templates, adding a logo, and adjusting fonts and colors.

Invoicing

Invoices have always been a core feature of FreshBooks. While they may not offer all the customization options found in QuickBooks Online, they provide everything most small businesses need. Users can set invoices to recur, apply automatic finance charges, and save them as PDFs. FreshBooks also supports online payments through FreshBooks Payments (powered by Stripe) and allows users to configure automatic payment reminders for added convenience.

Bills and Expenses

Vendor records in FreshBooks function similarly to client records and offer a comparable level of detail. Like many competing platforms, FreshBooks allows users to classify vendors as 1099 recipients. However, generating and filing 1099 forms requires an additional service, such as Yearli or one of FreshBooks’ payroll partners, whereas some competitors, like Patriot Software Accounting Premium, include this feature natively.

Users can manually enter bills and expenses, link them to specific clients and projects, and even set them to recur. FreshBooks provides multiple ways to input expenses, including importing transactions, where the system identifies potential bill payments for easier matching. Additionally, users can email or upload scanned copies of bills or capture receipt images using their smartphones.

Inventory Tracking

FreshBooks is more suited for service-based businesses than those focused on selling products, as its item-tracking capabilities are quite limited. Item records include basic fields such as name, description, income account, rate, and applicable sales taxes.

While FreshBooks does offer inventory tracking and alerts users when attempting to invoice more items than are in stock, its functionality remains minimal compared to more robust inventory management solutions. Service records share most of the same fields, except for inventory tracking, but they can be designated as billable to specific clients and projects.

Mobile App

FreshBooks’ mobile apps for Android and iOS equip small business employees with essential accounting tools for on-the-go financial management. These apps feature a streamlined dashboard and include an automatic mileage tracker that records travel distances using your smartphone. Users can create, edit, and view complete invoices, estimates, and expenses, as well as log billable hours while working remotely. Client records are easily accessible, and the apps offer a sleek, intuitive design with smooth navigation and responsiveness.

Security

FreshBooks prioritizes security by regularly scanning its servers for vulnerabilities and employing industry-standard encryption protocols to protect sensitive data. Multi-factor authentication (MFA) is mandatory, adding an extra layer of protection. All data transmitted between your browser and FreshBooks is secured with 256-bit SSL encryption. To ensure data reliability and prevent loss, FreshBooks replicates account information across multiple database servers in two separate geographic locations, reducing the risk of disruption from a single point of failure.

Conclusion

FreshBooks simplifies accounting with an intuitive and visually appealing interface, making financial management both accessible and enjoyable. Its fully functional mobile apps and robust project management tools further enhance usability, particularly for service-based businesses. What sets FreshBooks apart is its strong phone support, highly customizable invoicing options, and built-in time tracking available across all plans. This combination makes it an excellent choice for businesses looking for a well-rounded solution that seamlessly integrates invoicing and accounting functions.