FreshBooks vs QuickBooks: Key Differences & What’s Best for 2022

FreshBooks and QuickBooks Online are well-known accounting programs for good reasons. While both software offer rich features, they also have significant differences and are built for distinct business purposes. For instance, FreshBooks is best for service-based businesses and freelancers that need invoicing and time-tracking features while QuickBooks Online is an all-around accounting software application that can serve almost all aspects of businesses, including inventory management.

Our comparison of FreshBooks and QuickBooks Online will help you understand which accounting software is best for your needs and budget. We break down the most important features of these programs in an internally developed case study to provide you with all the information you need to make a decision.

When to Use FreshBooks

FreshBooks is ideal for freelancers and very small businesses with one or two users. All FreshBooks plans, except the highest-priced level, include only one user, and you have to pay an additional $10 per month for every additional user. FreshBooks and QuickBooks both have powerful invoicing and time-tracking capabilities, but if you don’t need many users to work on your accounting system, FreshBooks is the more affordable choice. It was featured in our Best Small Business Accounting Software guide for its professional-looking invoices and feature options. It’s also preferred by many small businesses because of its unbeatable customer service. The downside to using it’s that a live connection to your bank is required, not optional, and FreshBooks can’t account for inventory.

FreshBooks is better for:

• Businesses looking for reliable customer service: FreshBooks allows you to talk to a customer service representative over the phone, which is rare among accounting software providers. QuickBooks also offers phone support, but you can’t initiate the call. You have to submit a ticket and wait for an agent to call you.
• Project-based businesses: FreshBooks lets you issue invoices to your clients, track time spent on a project, and compare estimated to actual expenses for better financial management.
• Very small businesses looking for an affordable alternative to QuickBooks: If you’re a sole proprietor or a very small business with one or two users, then FreshBooks is a more affordable alternative to QuickBooks.

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When to Use QuickBooks Online

QuickBooks Online is powerful, all-inclusive accounting software that can handle the needs of small to midsize companies. We rate QuickBooks as our overall best small business accounting software because it offers more features than FreshBooks, including the ability to manage inventory, track expenses by class and location, and generate reports on either the accrual or cash basis of accounting. In addition, QuickBooks has a large network of QuickBooks ProAdvisors that, with your permission, can access your online books to help solve problems and keep your books straight.

QuickBooks Online is better for:

• Inventory accounting: QuickBooks Online Plus and Advanced lets you track inventory items and quantities, update prices and quantities automatically and calculate the cost of goods sold (COGS) when a sale is recorded.
• Manual bookkeeping: If you prefer to manually upload your bank files or input transactions by hand, then choose QuickBooks. FreshBooks cannot reconcile bank accounts unless you allow FreshBooks access to your bank account. QuickBooks gives you the option to connect your bank but doesn’t require it.
• Managing sale taxes in multiple states: QuickBooks Online calculates sales taxes in any jurisdiction automatically for easy tax filing. With FreshBooks, you need to set up the sales tax for each district where you’re collecting taxes manually.
• Procurement or purchasing departments: Both QuickBooks and FreshBooks can manage bills, but QuickBooks has more developed accounts payable (A/P) features. QuickBooks allows you to create purchase orders (POs) to help you streamline your purchasing processes. One of FreshBooks’ limitations is the inability to create POs.

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When to Use an Alternative

FreshBooks and QuickBooks are undeniably two of the most popular accounting software programs. However, it doesn’t mean that they have no limitations. There are still some areas of accounting and businesses that they’re not fit for.

You need an alternative for certain situations, including:

• Project accounting with inventory: Project-based businesses that need inventory accounting can use Xero instead. Xero allows you to compare actual to estimated project expenses while also having good inventory management features.
• Fixed asset accounting: Neither FreshBooks nor QuickBooks Online has a fixed asset manager. If fixed assets are a big part of your business, you should consider Xero. It can manage and track fixed assets like buildings, vehicles, machinery, and equipment and calculate depreciation expenses.
• Service-based businesses that need free accounting software: Sunrise allows you to send quotes, estimates, and invoices as well as track expenses for free.

For other good alternatives to QuickBooks, read our Best QuickBooks Alternatives.

Fit Small Business Case Study

Our case study evaluates FreshBooks and QuickBooks Online across 11 categories. The results show QuickBooks Online’s excellence in terms of general features, banking and cash management, inventory accounting, and reporting. Conversely, FreshBooks’ mobile app and project accounting features are slightly better than QuickBooks, not to mention its outstanding customer service. You can check out the detailed results of our case study in our FreshBooks review and QuickBooks Online review.

See the graph below for the summary of our case study.

FreshBooks vs QuickBooks at a Glance

FreshBooks vs QuickBooks Online: Pricing

Both FreshBooks and QuickBooks Online offer a plan for every budget. The lowest-priced plan for FreshBooks and QuickBooks Online are $15 and $25, respectively. FreshBooks Premium is $50 per month while QuickBooks Online Plus is $80 per month. QuickBooks Online Advanced, designed for larger businesses with more complex needs, is priced at $180 per month. While FreshBooks’ monthly price is lower than QuickBooks’ for comparable plans, FreshBooks charges $10 per additional team member, whereas QuickBooks includes a set number of users under each plan.

FreshBooks Pricing

The three FreshBooks plans vary by the number of billable customers allowed and by the features included. The first three plans include one user while the custom plan (Select) starts with two users. While FreshBooks Lite is only $15 per month, it will only allow up to five customers and won’t generate a balance sheet. The Plus plan will allow 50 customers for $25 per month, and the Premium plan will allow unlimited customers for $50 per month.

Here’s a breakdown of FreshBooks’ pricing:

• Lite: $15 per month, including one user and five billable clients
• Plus: $25 per month, including one user and 50 billable clients
• Premium: $50 per month, including one user and unlimited clients
• Select: Customized pricing; includes two users and unlimited clients

For additional users, it’ll cost you $10 per user, per month.

FreshBooks Lite

The FreshBooks Lite plan is ideal for a service-based business that invoices less than five customers a month. This plan will work if you typically get paid at the same time you provide services and rarely extend payment terms to customers. Since A/P isn’t available, you’ll need to track your unpaid bills by hand.

FreshBooks Plus

The FreshBooks Plus plan is ideal for a service-based business that needs to invoice no more than 50 customers a month. Similar to the Lite plan, you’ll need to track your unpaid bills by hand. FreshBooks Plus will generate recurring invoices for your customers automatically.

FreshBooks Premium

The FreshBooks Premium plan is ideal for a service-based business with many clients. Similar to the Lite and Premium plans, you’ll need to keep track of your unpaid bills outside of FreshBooks. Additional features include project profitability tracking and customized email signatures.

FreshBooks Select

Businesses using FreshBooks Select can bill unlimited customers and access specialized features. The Select plan improves upon the lower-tier plans by providing a personal account manager and lower credit card transaction rates.

QuickBooks Online Pricing

The four QuickBooks Online plans vary by the number of users and features included. You’ll need to purchase at least QuickBooks Online Essentials if you want to manage unpaid bills and QuickBooks Online Plus if you need to track inventory. QuickBooks Online Advanced offers 25 users, a dedicated support manager, and enhanced reporting with Fathom.

The QuickBooks Online pricing plans are:

• Simple Start: $25 per month with a single user
• Essentials: $50 per month, which includes three users
• Plus: $80 per month, which includes five users
• Advanced: $180 per month, which includes 25 users
• QuickBooks Payroll: Starts at $45 per month (Payroll Core)

QuickBooks Online Simple Start

QuickBooks Online Simple Start is ideal for a service-based business with only one user. Since QuickBooks Online Simple Start doesn’t track unpaid bills, you’ll have to track your bills manually until you’re ready to pay them by printing or writing a check by hand.

QuickBooks Online Essentials

QuickBooks Online Essentials is ideal for a service-based business with no more than three users. With QuickBooks Online Essentials, you can enter your bills as soon as you receive them. You can then generate a report of all your outstanding bills and choose the ones you want to pay by printing or writing a check.

QuickBooks Online Plus

QuickBooks Online Plus is ideal for a product-based business with five or fewer users that needs to track inventory. Also useful for product-based businesses, QuickBooks Online Plus can generate POs to send to suppliers. QuickBooks Online Plus can also track income and expense by location.

QuickBooks Online Advanced

QuickBooks Online Advanced is required for any business needing more than five users. In addition to allowing more users, QuickBooks Online advanced can customize user access to help facilitate proper segregation of duties at larger businesses. While all QuickBooks Online plans come with unlimited customer support, QuickBooks Online Advanced has a dedicated support manager.

Read our comparison of QuickBooks Online plans to decide which package is right for you.

Takeaway: If price is your priority and you don’t need to track unpaid bills, then FreshBooks is clearly the more affordable option.

FreshBooks vs QuickBooks Online: Features

Both FreshBooks and QuickBooks Online are packed with time-saving features, but there are some important differences. The table below shows how FreshBooks matches up to QuickBooks Online in terms of features.

Freshbooks Tiered Features Table

QuickBooks Online Tiered Features Table

Based on our case study, we’ll discuss in detail four key features of FreshBooks and QuickBooks that are significantly different.

FreshBooks vs QuickBooks Online: General Features

Based on our case study, QuickBooks Online has more enhanced general bookkeeping features than FreshBooks but is more laborious to set up. While it’s easier to enter general information in FreshBooks, it does have some missing features that are present in QuickBooks Online. For instance, you can’t choose the entity type or lock prior period transactions.

Another major difference is that FreshBooks requires an accountant user to perform many essential tasks, such as:

• Recording and modifying journal entries
• Managing the chart of accounts
• Entering beginning balances

This means you need to have an accountant work with you to execute these essential tasks. Another way to go around this is to sign yourself up as an accountant using a separate email address, which can be very inconvenient and time-consuming.

FreshBooks vs QuickBooks Online: Banking and Cash Management

QuickBooks Online is far more developed than FreshBooks in terms of cash management and bank reconciliation. QuickBooks Online is very flexible since you can transfer bank transactions through a live connection, upload a file from your bank, or input your bank transactions manually. Regardless of how you enter your bank transactions, you can reconcile your bank accounts.

A potential problem with FreshBooks is that you can’t record transactions to a specific bank account unless you establish a live connection between your bank account and FreshBooks. All payments are posted to cash on hand when manually entered. They can then be transferred to a specific bank account when that transaction shows up in a bank feed. If you aren’t willing to allow your accounting software access to your bank account, then choose QuickBooks.

Another significant advantage of QuickBooks Online over FreshBooks is that you can record and print checks in the register and combine multiple checks in a single deposit. If your business heavily relies on paying checks for bills and employees, QuickBooks Online is the ideal solution.

FreshBooks vs QuickBooks Online: A/P

QuickBooks Online also beats FreshBooks in terms of managing unpaid bills. Both programs track unpaid bills, but FreshBooks users need to have at least the Premium plan to access this feature. Both programs offer an easy way to record a bill and track outstanding bills, but there are a few key differences worth noting. QuickBooks lets you create POs and convert them into bills, enter a vendor credit and apply it when you pay the bill, set a default cost for a service item, and pay an independent contractor using the service item you created.

FreshBooks vs QuickBooks Online: Inventory Management

Inventory accounting is QuickBooks’ biggest trump card against FreshBooks. FreshBooks lets you add inventory items to bills, but there’s no way to know how much inventory you have available or the cost of your inventory sold. QuickBooks Online’s inventory management system lets you track available inventory, calculate quantities, costs, and prices automatically, and track which of your items are most profitable. If your business is focused on selling products, you should choose QuickBooks Online to support your inventory accounting needs.

Takeaway: QuickBooks Online takes the lead in almost all of the categories evaluated in our case study. With the key differences presented above, it’s safe to say that QuickBooks Online is generally more powerful than FreshBooks. If invoicing is your priority, then FreshBooks should be enough, provided you’re willing to allow FreshBooks access to your bank account. However, if you need good software for managing and tracking bank transactions, bills and expenses, and inventory, choose QuickBooks Online.

FreshBooks vs QuickBooks Online: Ease of Use

Both FreshBooks and QuickBooks have very user-friendly interfaces. They both use simple language throughout the program so that anyone without an accounting/bookkeeping background can use the software.

FreshBooks Ease of Use

It only takes a few minutes to set up a company in FreshBooks. You just need to provide some information about your business, such as company name, email address, and telephone number, and then you can explore your new FreshBooks account. The FreshBooks dashboard provides you with key information, such as your A/R balance, total profit, and a left menu bar for easy navigation within the program.

From the dashboard, there’s an Invite button that allows you to invite users, categorized as admin, manager, employee, contractor, or accountant:

Another helpful feature is the Create New button which allows you to quickly create a client, invoice, bill, estimate, and other items:

QuickBooks Online Ease of Use

QuickBooks Online isn’t as easy to set up as FreshBooks, but once you create your account, the default dashboard is set to display shortcuts to essential functions alongside an overview of your business. From the left menu bar of your dashboard, you can access all of QuickBooks Online’s core features, including Banking, Sales, Cashflow, Expenses, Projects, and Payroll. A very helpful feature is the +New button which allows you to record a transaction easily. Instead of running a report, you can see your paid and unpaid invoices, total expenses, profit and loss, and total sales for any period:

Takeaway: Since QuickBooks Online is more sophisticated than FreshBooks, it can present a learning curve for beginners, especially if you have zero experience in accounting. FreshBooks has a simpler interface that is easier to follow and navigate than QuickBooks. The good news is that both programs, depending on your subscription, include unlimited customer support to help you learn everything there is to know about the software.

FreshBooks and QuickBooks Online: Integrations

Both FreshBooks and QuickBooks Online connect to other software to enhance their capabilities. For instance, to process credit card payments in FreshBooks, you need to integrate it with Stripe or PayPal. If you want QuickBooks to track leads, you can connect it to customer relationship management (CRM) software like HubSpot and Mailchimp.

FreshBooks Integrations

FreshBooks integrates with hundreds of third-party programs, such as Gusto for payroll, Stripe and PayPal for credit card processing, Bench and Mazuma for bookkeeping, and Shopify and Square for ecommerce, just to name a few.

QuickBooks Online Integrations

In addition to its built-in integration with the other QuickBooks products, QuickBooks Online connects with third-party programs, such as Gusto, Stripe, PayPal, Shopify, and Square. Unlike FreshBooks, QuickBooks has built-in payroll and credit card processing features. When you are ready to hire your first employee or accept online payments from customers, you simply turn that feature on—no app is required, but additional fees may apply.

Takeaway: FreshBooks and QuickBooks Online both have a large number of integrations. The library of integrated apps of both programs should be enough to cover other business processes, like payment processing and payroll.

FreshBooks vs QuickBooks Online Mobile App

Both FreshBooks and QuickBooks Online have downloadable mobile apps available from Google Play and the App Store. You can use the apps on your smartphone or tablet. Both programs are capable mobile accounting apps, but FreshBooks is slightly better because it can perform more functions than the QuickBooks app.

FreshBooks Mobile App

FreshBooks’ mobile app isn’t limited to on-the-go invoicing. You can also accept payments online, enter new bills, capture expense receipts, record time spent on a project, and assign the time to a project or client. An important missing feature is the ability to view financial reports.

Below is a screenshot of the FreshBooks mobile app’s dashboard:

QuickBooks Online Mobile App

Just like FreshBooks, QuickBooks Online’s mobile app allows you to issue invoices and receive payments on the go. The difference is that QuickBooks Online’s app cannot enter bills and record time worked on a client or project. The good news is that you can categorize expenses from the bank feed and view reports, which you can’t do with the FreshBooks app.

Below is a screenshot of the QuickBooks Online mobile app dashboard:

Takeaway:

FreshBooks’ mobile app is a little more functional than QuickBooks’, but it all comes down to your needs. If you’re doing business with many suppliers and managing project contractors, you’d like the option to record a new bill and enter the time worked using FreshBooks. Meanwhile, if you need to process and track incoming transactions from a bank feed, QuickBooks Online’s app comes in handy.

FreshBooks vs QuickBooks Online: Assisted Bookkeeping

Not all business owners have accounting experience, which is why it makes sense to seek a professional bookkeeping service. Both FreshBooks and QuickBooks Online offer assisted bookkeeping for users who need expert help with accounting, tax preparation, and advisory services.

FreshBooks Assisted Bookkeeping

FreshBooks partners with a third-party online bookkeeping service, Bench, to provide assisted bookkeeping services to users. Depending on your Bench subscription, you’ll get access to a dedicated bookkeeping team, year-end reports, unlimited tax advisory, and one-on-one tax strategy planning. Here’s a breakdown of Bench’s pricing:

• Essential: $299 per month, includes a dedicated bookkeeping team, monthly bookkeeping, year-end tax-ready financial statements, and direct, unlimited communication with Bench’s in-house research team
• Premium: $399 per month, includes everything in Essential, plus unlimited tax advisory; one-on-one tax coaching; annual tax filing for businesses like partnerships, S corporations (S-corps), and C corporation (C-corps); and annual tax filing for individuals, such as sole proprietors and independent contractors

QuickBooks Online Assisted Bookkeeping

QuickBooks Online users who need a professional bookkeeping service can add QuickBooks Live to their subscription by turning on the feature in their left menu bar. Through QuickBooks Live, you’ll be paired with a dedicated bookkeeper to help you accomplish tedious bookkeeping tasks like bank account reconciliations and reporting. Prices for QuickBooks Live Bookkeeping start at $200 per month for up to $25,000 in monthly expenses.

In addition to QuickBooks Live, users can work with independent QuickBooks ProAdvisors. QuickBooks Online is a very popular accounting tool that many local bookkeepers will be very familiar with. You’ll be almost certain to find a local QuickBooks ProAdvisor near you.

Takeaway: QuickBooks Online wins for assisted bookkeeping. QuickBooks is used by the vast majority of small business owners in the United States, which means that you can find a competent local bookkeeper easily and quickly who can help manage your books.

FreshBooks vs QuickBooks: Customer Support

Having the ability to get help when you need it is key. Both FreshBooks and QuickBooks offer several support channels that you can access easily, but FreshBooks comes out ahead, primarily because of its live phone support.

FreshBooks Customer Support

FreshBooks is known for its impeccable customer support. The best thing about FreshBooks is that you can make a phone call to talk to a live agent, which is a rare feature among accounting software providers. In addition to phone support, you can also send an email to FreshBooks, chat with a representative through a chatbot, and access its extensive frequently asked questions (FAQs) section, which has detailed instructions on how to do almost anything in FreshBooks. FreshBooks Select has a personal account manager to help you with your bookkeeping duties.

QuickBooks Online Customer Support

QuickBooks allows you to speak with a support rep via telephone, but you aren’t able to initiate the call. Instead, you have to submit a ticket and then wait for a rep to call you. You can access the link to start a live chat directly from within your QuickBooks account. You also can search for your question on the QuickBooks learn and support page, which includes articles, how-to videos, and FAQs. Just like FreshBooks Select, QuickBooks Online Advanced has a dedicated account manager that makes getting answers much easier.

Takeaway: The ability to make a phone call when you encounter serious issues is a huge factor that sets FreshBooks’ customer support apart from QuickBooks.

Bottom Line

If you’re a small business or a solo entrepreneur whose primary focus is strong invoicing and you’re willing to allow FreshBooks access to your bank account, then FreshBooks is for you. However, if you’re looking for more than invoicing, QuickBooks Online doesn’t disappoint. It can manage almost all aspects of your business, including inventory management, project accounting, and income and expense tracking by class.