FreshBooks Review: Features, Pricing & Alternatives for 2023
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Eric is a staff writer at Fit Small Business and CPA focusing on accounting content. He spends most of his time researching and studying to give the best answer to everyone.
This article is part of a larger series on Accounting Software.
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 $15 per month for one user, and you can pay for more seats as needed. FreshBooks is offering 60% off for three months on all subscription packages.
FreshBooks
Overall Score:
3.2 / 5
What We Like
- All plans include unlimited invoices
- Can track time and bill clients for hours
- Great customer service
- Includes a mobile app for accounting and invoicing
What's Missing
- 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
Are you looking for something different? See our evaluation of the best small business accounting software.
FreshBooks Deciding Factors
Supported Business Types | Freelancers and solopreneurs with service-based businesses and no inventory |
Pricing |
Each additional user is $10 per month |
Free Trial | 30 days for Lite, Plus, and Premium plans |
Payroll | Requires third-party integration with Gusto |
Standout Features |
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Customer Support | Self-help library, phone number, chatbot, live chat, and community page |
FreshBooks New Features 2023
- New checkout links: Checkout links, reusable links that customers can use to process payments immediately, now include terms and conditions and shipping addresses.
- Comma-separated values (CSV) imports: When performing bank reconciliations, you can now import CSV files to make reconciliation faster.
FreshBooks Alternatives
 |  |  |
|---|---|---|
Best for: Companies looking for inventory accounting | Best for: Businesses that need income and expense tracking by class | Best for: Companies seeking free accounting software without sacrificing essential accounting features |
Software from: $9 per month | Software from: $30 per month | Software from: $0 per month |
FSB Case Study
Our case study shows a side-by-side comparison of FreshBooks, Sunrise, and QuickBooks Online to help you decide which is right for your business.
FreshBooks vs Competitors FSB Case Study
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FreshBooks Starting at $15 per month, $50 as tested
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Lending Accounting Free
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QuickBooks Online Starting at $30 per month, $85 as tested
FreshBooks didn’t disappoint in accounting features, except inventory. Overall, FreshBooks 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.
It stacks well with our free accounting software alternative, Lendio Accounting. However, we highly recommend choosing FreshBooks for project accounting, accounts receivable (A/R), and accounts payable (A/P). We also included QuickBooks Online in our comparison because if you outgrow FreshBooks in the future or find its features inadequate for your needs, we recommend upgrading to QuickBooks Online.
We gave FreshBooks only 3 points out of 5 for pricing because it costs $95 per month for five users, which is actually more expensive than QuickBooks Online Plus, which also includes five users and better features including inventory. Although FreshBooks is affordable for one user, we considered the fact that some small businesses might need to add more users.
FreshBooks offers four plans with monthly fees that start at $15 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.
Lite | Plus | Premium | Select | |
|---|---|---|---|---|
Monthly Price | $15 | $30 | $55 | Custom |
Additional Seats | $10 per user, per month | |||
Billable Clients | 5 | 50 | Unlimited | Unlimited |
Unlimited Customized Invoices | ✓ | ✓ | ✓ | ✓ |
Double-entry Accounting Reports | ✕ | ✓ | ✓ | ✓ |
A/P | ✕ | ✕ | ✓ | ✓ |
Dedicated Account Manager | ✕ | ✕ | ✕ | ✓ |
FreshBooks Features
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 FreshBooks is user-friendly for those wanting to get their business in order as it’s accounting made easy but with some sacrifices in certain features.
FreshBooks General Features Video
Available for Premium and Select users, the A/P tool includes bill and vendor management features, which 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 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.
On a tangent, 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.
Add a New Bill Screen in FreshBooks
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.
FreshBooks A/P Features Video
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:
Create a New Invoice Screen in FreshBooks
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 A/R Features Video
FreshBooks doesn’t perform well in terms of banking and cash management. You can’t reconcile bank statements unless you connect your bank account. If you’re uncomfortable connecting 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 the 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 allow a bank connection, but FreshBooks is the only one among its major competitors that requires the connection. But we don’t look at this in a wholly 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.
FreshBooks Banking & Cash Management Features Video
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.
Once approved, you can convert an estimate to a project and allocate actual labor cost details. You can also compare estimated costs against actual costs, which is important for budget planning. If you need specialized accounting software for project management, check out our list of the best contractor accounting software.
FreshBooks Project Accounting Features Video
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 manually set up the sales tax for each jurisdiction 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.
As with sales and income tax, 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.
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, 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.
FreshBooks Ease of Use Video
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 Mobile App Video
We check user review sites to see actual feedback from users. Majority of the positive FreshBooks reviews highlight its usability and compatibility with solopreneurs, very small businesses, and professionals. However, some reviewers mentioned that its major drawback is that it’s not built for large companies:
- GetApp: 4.5 out of 5 stars based on about 3,800 reviews
- G2.com: 4.5 out of 5 stars based on about 605 reviews
- Google Play: 4.3 out of 5 stars based on about 4,600 reviews
- App Store: 4.7 out of 5 stars based on about 2,600 reviews
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.
Integrations
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
Can FreshBooks replace QuickBooks?
Yes, but not in all aspects. QuickBooks is better if you have inventory or want to track net income by classes.
Can clients pay directly through FreshBooks?
Yes. You can send checkout links to clients to get paid faster. FreshBooks can also integrate with payment channels, like PayPal, and banks.
Bottom Line
FreshBooks may lack some important features like managing your inventory and tracking income by class, which are present in slightly more expensive software, like 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.
