FreshBooks is a cloud-based accounting program that allows you to create and send unlimited invoices, manage clients and projects, and accept payments online. It offers a robust set of features, including double-entry accounting, recurring invoices, project management, and mobile accounting.
It has four plans with monthly fees that start at $17 per month for one user, and you can pay for more seats as needed ($11 per user, per month). Continue reading our FreshBooks review for details on its features, pricing, and user reviews.
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- Can’t track inventory and cost of goods sold (COGS)
- Can’t monitor income or expenses by class
- Can’t track and reconcile bank accounts without a live bank connection
- Charges a fee for additional users
Supported Business Types
Freelancers and solopreneurs with service-based businesses and no inventory
Each additional seat is $11 per month.
30 days for Lite, Plus, and Premium plans
Requires third-party integration with Gusto (read our Gusto review)
Self-help library, phone number, chatbot, live chat, and community page
When To Use
Best for: Companies looking for inventory accounting
Best for: Businesses that need income and expense tracking by class
Best for: Mobile app accounting and customer service assistance
Software from: $13 per month
Software from: $30 per month
Software from: $0 per month
Fit Small Business Case Study
Our case study framework shows a side-by-side comparison of FreshBooks, Zoho Books, and QuickBooks Online to help you decide which is right for your business.
FreshBooks vs Competitors FSB Case Study
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FreshBooks $17 per month as tested
QuickBooks Online $30 per month as tested
Zoho Books $0 per month as tested
FreshBooks didn’t disappoint in accounting features, except inventory. Overall, it focuses more on simplicity and usability. Its core feature is to make it easy for users to handle accounting features—and that’s why it’s best suited for freelancers, solopreneurs, and very small businesses.
Compared to QuickBooks Online and Zoho Books, FreshBooks is a bit behind in accounts payable (A/P), accounts receivable (A/R), and inventory. However, FreshBooks almost ties with Zoho Books in terms of project accounting. That’s why we highly recommend FreshBooks for freelancers because FreshBooks’ project accounting features include a time tracker for tracking billable hours.
We gave FreshBooks only 3 points out of 5 for pricing because it costs $85 per month for five users, which is only $5 less than QuickBooks Online Plus, which also includes five seats and much better features including inventory. Although FreshBooks pricing is affordable for one user, we considered the fact that some small businesses might need to add more seats.
FreshBooks offers four plans with monthly fees that start at $17 per month. The plans vary in terms of the maximum number of billable clients and the advanced features available, such as automated recurring invoices, double-entry accounting reports, and a dedicated account manager. You can save an additional 10% by paying annually.
$11 per user, per month
Unlimited Customized Invoices
Double-entry Accounting Reports
Accounts Payable (A/P)
Dedicated Account Manager
FreshBooks New Features 2023
- Change time zones: FreshBooks now allows you to adjust the time zones associated with both your business and associated accounts. This is especially useful if you work with team members in different parts of the world, and it allows employees to log time entries in their time zone and have it reflected in yours.
- Visibility of contact information: You can now opt to show or hide your phone number and address on documents such as invoices, estimates, recurring templates, proposals, and credits.
- Invoices on mobile app: You can now create a custom invoice due date with the FreshBooks mobile app for iOS, creating more control over when you’ll get paid. The options menu has also been updated to reflect all functionality while creating or editing invoices on the iOS app.
- Simplified payments: FreshBooks has made improvements to the input fields on Payments, making them easier to handle when creating or editing the fields.
- Team member capacity: As part of project profitability, you can now set your team members’ capacity and track the utilization rate on the Team Utilization Report.
- Scanned receipts: If a scanned receipt matches the date and amount of an existing expense or bill, this is flagged as a potential match for you to attach the image to instead.
- Items and services: Items and services can now be assigned to income accounts in your chart of accounts, making it easier to track your numbers more accurately.
- Payments on iOS: You can now set up online payments, as well as manage them in the new Online Payments Settings area, and accept partial payments while creating or editing invoices on the FreshBooks iOS mobile app.
If you’d like to learn about other accounting software options and how they compare to FreshBooks, we suggest checking out our guide to the best FreshBooks alternatives.
Below, we provide a quick assessment of FreshBooks within each category in our comprehensive case study to help you decide if it’s the right software for you. We also include videos of our detailed assessment of each feature.
Setting up FreshBooks is relatively easy but took a while. We gave it a below-average score because it lacks certain features that are essential in accounting software, like setting the entity type and modifying the chart of accounts. However, these missing features must not be seen as a complete miss for FreshBooks, which still proves to be a good fit for certain users, such as freelancers and solopreneurs.
Another limitation we see here is that accountant access is only available in the Plus and higher plans. Freelancers who don’t have knowledge of accounting are the primary clients of certified public accountants (CPAs) and bookkeepers. If they choose to get a Lite subscription, they won’t be able to invite their personal accountant unless they upgrade plans.
However, we still commend FreshBooks for its simplicity. As accounting and bookkeeping experts here at Fit Small Business, we saw that the platform is user-friendly for those wanting to get their business in order as accounting is made easy, but it sacrifices certain features.
Available for Premium and Select users, the A/P tool includes bill and vendor management features. These can be found under the Expenses tab.
Transactions entered manually must be recorded to the Petty Cash account—and those transactions can be assigned to a bank account when the transaction is imported via the bank connection and during bank reconciliation. Therefore, there’s no way to assign expenses to the appropriate payment accounts without allowing FreshBooks access to your bank account.
Connecting to your bank account is a great time-saving feature. However, if you’re uncomfortable allowing a connection, you’ll be better off with QuickBooks, which allows a connection but doesn’t require it—head over to our review of QuickBooks Online to find more to love about the solution.
On a tangent, with FreshBooks, you can create a new vendor on the fly and enter a bill from scratch or by uploading a receipt. To enter a new bill, click on the Expenses menu, select the Bills drop-down menu, and then tap on the New Bill button. Provide the required details in the New Bill screen and then click Save.
FreshBooks also allows you to record a payment and assign it as billable to a project or contractor. You can also set up nonstock and service items within a service order and add a default price for each item, but you can’t use the item to pay independent contractors. A/P is connected to your cash flow statement and profit and loss (P&L) reports, so you can view outstanding bills instantly.
There are many important invoicing features in FreshBooks, but its outstanding invoice customization features are the reason why it has a high score in this area. Its invoices look professional, and you can customize the style, add a logo, include a personal message, and add items, such as inventory, labor and expenses, and sales tax. You can also email and print your invoice.
Another nice feature is the ability to create recurring invoices, which comes in handy if you’re billing a customer for the same amount on a regular basis. You can also view a filtered list of your outstanding invoices so that you can send your customers a friendly reminder.
To add a new invoice, click on the Invoices section, hit the New Invoice button, add your details and customize your invoice, and then click Save.
Despite its great features, its A/R has shortcomings. You can’t issue a receipt for a sale paid immediately, issue a refund check to settle a negative A/R, and include a sales tax adjustment on a credit memo.
FreshBooks doesn’t perform well in terms of banking and cash management. You can’t reconcile bank statements unless you connect to your bank account. If you’re uncomfortable connecting to your bank account, then this isn’t for you. At the very least, good accounting software should allow you to record a check in the register—but that’s not possible with FreshBooks.
All transactions are deposited or withdrawn from cash on hand automatically. From there, transactions can be assigned to bank accounts, but only by utilizing the connection to your bank account. This makes FreshBooks nearly unusable if you don’t establish a bank connection. Even if you connect your bank, there’s no way to assign outstanding checks to a particular account so that you can see an available balance.
Almost all software allows a bank connection, but FreshBooks is the only one among its major competitors that requires the connection; however, we don’t look at this in a completely negative way.
With FreshBooks, users don’t have to remember to assign expenses to a particular bank or credit card account. Record the expense, then FreshBooks will assign it to the proper account based on the transactions it receives from the bank feeds.
If you need project accounting, FreshBooks is an ideal choice—unless you need inventory accounting. It includes project management features that work directly with its invoicing tool to help you manage timelines and simplify project workflows. You can create an estimate and add items such as labor, inventory, and sales taxes.
FreshBooks lets you add sales tax items to bills, expenses, invoices, credit notes, and other income and vendor transactions. While you can track sales taxes, you have to set up the sales tax for each jurisdiction manually where you’ll be collecting tax. You can generate a tax summary report to see the amount of sales tax collected as well as view your sales tax liabilities. However, you can’t use FreshBooks to pay and file your tax returns.
We evaluated the sales and income tax features across the other categories, so there’s no separate video.
While you can set up inventory descriptions to be added to bills easily, there’s no way to track the number of items on hand, the value of stock available, and the cost of your inventory sold. Tracking your inventory costs by hand with a spreadsheet is very time-consuming and unnecessary with the right software.
So, if your business deals with inventories, then you need to look for an alternative to FreshBooks—and we recommend more powerful solutions like Xero, QuickBooks Online, or Zoho Books to avoid a spreadsheet nightmare.
FreshBooks’s inventory management is assessed across the other categories, so we have no separate video.
If you only need basic financial reporting, you should do fine with FreshBooks. It generates a wide range of reports, but they aren’t as detailed as QuickBooks Online’s. For instance, the balance sheets only show main categories, which means you can’t drill down in reports for more specific levels of detail, such as classes and location. Other reports available include A/R aging, A/P aging, income or loss by month or by customer, trial balance, and general ledgers (GLs).
FreshBooks has a capable mobile app that you can use for sending invoices. It can execute almost all the functions of the desktop interface—you can enter bills, accept payments, attach receipts, and record time worked. If you often do your business on the go, FreshBooks’ mobile app won’t disappoint you.
What’s missing in the app is assigning expenses to projects. We praise FreshBooks for its project accounting features—and we’d like to see this in the mobile app. Moreover, there’s no way to enter bill payments and categorize bank feed transactions from within the app.
FreshBooks has earned a reputation for its award-winning customer service. It offers nearly all types of customer support, including phone and email support. You can speak with a customer service representative over the phone by calling 866-303-6061 Monday through Friday from 8 am to 8 pm EST, which is rare among accounting software providers.
You can also browse its vast self-help resources, which include how-to articles and answers to frequently asked questions. Amid FreshBooks’s limitations in scalability, we still praise the software for providing an easy accounting solution to users without accounting knowledge.
For a more in-depth look at how to use FreshBooks, see our free FreshBooks tutorials. You’ll learn valuable information, such as how to set up your company in FreshBooks, how to manage customers and send invoices, how to manage bills and expenses, how to classify transactions and reconcile bank accounts, and how to print reports.
We check user review sites to see actual feedback from users. The majority of the positive FreshBooks reviews highlight its usability and compatibility with solopreneurs, very small businesses, and professionals and its strong project accounting features. However, some reviewers mentioned that its major drawbacks are that it’s not built for large companies and lacks inventory management capabilities.
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FreshBooks Assisted Bookkeeping Options
FreshBooks itself doesn’t offer assisted bookkeeping, but it partners with Bench, an online bookkeeping service, to provide users with bookkeeping, tax preparation, and tax advisory services. You’ll be assigned a dedicated virtual bookkeeper who will take over your bookkeeping tasks, from reconciling your accounts to generating reports. For information on pricing, features, and overall platform usability, read our Bench Accounting review.
FreshBooks integrates with more than 70 software programs. These include Zoom, Shopify, Squarespace, Gusto, Google Workspace, Fundbox, Stripe, Bench, HubSpot, Dropbox, PayPal, QuickBooks Online, Slack, and Mailchimp.
Frequently Asked Questions (FAQs)
Yes, but not in all aspects. QuickBooks is better if you have inventory or want to track net income by classes.
Yes, you can send checkout links to clients to get paid faster. FreshBooks can also integrate with payment channels, such as PayPal, and banks.
Yes, FreshBooks includes time tracking functionality. You can track the time spent on projects or client work, assign rates to different tasks or team members, and easily convert tracked time into invoices or billable hours.
Yes, FreshBooks is designed specifically for freelancers, small businesses, and self-employed professionals. Its user-friendly interface, simplified accounting features, and scalable plans make it a popular choice for individuals and small teams.
Yes, you can upload receipts, categorize expenses, and even link your bank accounts or credit cards to automatically import transactions. This helps you keep track of your business expenses and simplifies the process of tax preparation.
FreshBooks may lack some important features like managing your inventory and tracking income by class, which are present in slightly more expensive software, such as Xero and QuickBooks Online. However, its powerful invoicing and project management features and excellent customer service make it a terrific choice for your small business.