No matter what type of business you’ve built it’s vital you find an accounting system or software that keeps tracks of your business income and expenses.
When I quit my full-time accounting job in 2013 and started my online business, I already knew the importance of establishing an accounting system. But I had no clue what kind of bookkeeping software to use — or which one would be the best fit for my freelance biz.
I knew I wanted an online bookkeeping program that allowed me to run my business from anywhere, and not be limited by a specific operating system (like Windows or Mac). After testing a few different ones, I came across FreshBooks, which also allowed me to track my time, create invoices to all my clients, and even manage important expenses for projects.
Here is my honest review of FreshBooks, and how I use it to keep my online business finances organized and running smoothly.
What is FreshBooks?
FreshBooks is a cloud-based accounting program that mainly focuses on creating invoices, project management and time tracking. But they also make it easy to organize your client list, manage team members, collect payments, sync reports with your accountant, and review bookkeeping stats.
As you can see, it does quite a bit and they are constantly improving how it works. One of the cool things I really like about FreshBooks is that you can send professional looking invoices, with your brand colors and logo, right into your clients inboxes or mailboxes each month.
An example of my invoices that I send out using FreshBooks.
Getting paid on time is one of the most important parts of being a freelance business owner, and FreshBooks makes that happen.
How I use FreshBooks for my small business
I’ve personally been using FreshBooks for my freelance business, for over 3 years. It’s been part of my success and business growth since the beginning. Here’s how I use it every day.
1. Make invoicing simple and effective
As I mentioned, the foundation of FreshBooks is creating and sending professional looking invoices. When you click the Time Tracking button, you’ll be able to clock the hours you log for a client or project. At the end of the month, all of your time can be exported to an invoice automatically, or you can create an invoice summary manually.
You can see when your invoices are viewed, and if they’ve been paid or not. If you receive checks in the mail, you just log into your FreshBooks account (they also have an iPhone and iPad app so you can track it on your mobile device anywhere), and record the payment.
If you just want a simple invoice template that’s completely free, check out their nifty invoice creator tool.
2. Stop wasting time
The benefit to being able to track your time so easily, is so you can see where you’re spending your time. You can determine which times of day you work best, which client or project is sucking up too much time, and if you need to increase your prices.
3. Save hundreds of dollars in fees
Before finding FreshBooks I was billing all my clients through Paypal, and paying a ton of fees. Since then I only pay $0.50 per transaction no matter how large or small the payment is. When I compared this to receiving a payment through Paypal directly, I was paying over $700 in fees!
4. Share reports with a bookkeeper or accountant
This is a new feature that was just rolled out and I’m so excited about it. As an ex-accountant myself, I know the value of creating monthly reports and staying on top of the financial part of the business.
Earlier this year I hired a bookkeeper to help me stay on track, create reports and organize my accounting process. We can both see the invoices, clients, reports and discuss them in our monthly meetings. She gets her own login information, and can only see the info I allow her to see.
Here’s a list of accounting reports FreshBooks supports:
- Expense reports
- Profit and loss
- Tax summary
- Timesheet details
- Balance sheet
- Payments collected
- Revenue by client
- Estimated billing
- Task summary
- Invoice details
- Recurring revenue by client
- Much more
If you don’t have an accountant or bookkeeper to help run your business, FreshBooks makes it easy to find one in your local area. Or you can connect with one online.
5. Integrates with other accounting programs
FreshBooks seamlessly integrates with other bookkeeping programs, like Outright, QuickBooks, Xero and more. You can set it up to work with a few different types of tax software or payroll systems. It also syncs with task management systems like Basecamp, and client proposal software like Bidsketch.
Check out their site, for a complete list of programs and add-ons FreshBooks integrates with.
I have mine synced with my MailChimp email marketing account and my Gmail account so I can see everything at one glance. The options are nearly endless for what you can use FreshBooks with to manage your business finances.
6. Create professional estimates
I have a friend who recently started managing her husband’s construction business and she needed something he could use to create professional estimates for potential jobs and clients while on location. I told her about FreshBooks and they’ve been using it ever since.
Once you’re logged into your FreshBooks account, you just click on the Estimates tab to create a new estimate. You then choose your client, input the information, track time for the project and send the invoice once they’ve accepted the terms. You can even invoice them for a percentage of the job upfront.
My account summary of expenses and invoices.
7. Sync your bank accounts and expense transactions
Each day when I log into my FreshBooks account I can see all my transactions at a glance. I have a business checking account that syncs with FreshBooks so I can bill any client expenses and create monthly accounting reports.
Nothing is more important to a successful business than making sure you’re making enough revenue to cover expenses, and spending your money on the right projects.
And the best part is that you get all this from FreshBooks at a super affordable rate!
8. Clients can make partial payments (NEW)
FreshBooks recently added partial payments to their service. What does this mean? Essentially, your clients can pay part of your invoice now and the rest later.
This can help you as a freelance business owner improve your cash flow and have flexible repayment terms for your clients. This is a free added feature and just another thing to love about FreshBooks.
To set it up, simply go to the “Accept Credit Cards” page and under “Settings” check the “Partial Payments” box to get started. Or when adding invoice payments manually, you simply type in the partial (or full) payment amount.
FreshBooks pricing plans
A good FreshBooks review wouldn’t be complete without the pricing plans. You can start with a free 30-day trial, to see if you like it, too.
- Seedling: for $19.95 a month you can manage up to 25 clients and send an unlimited amount of invoices. The FreshBooks logo will be removed and you get access to all the other main features. This is the current package that I use for my freelance business.
- Evergreen: for $29.95 a month you can have an unlimited amount of clients, send unlimited, and unbranded, invoices. If you pay for the service annually, you’ll get a discount. You can add one staff member to your account.
- Mighty Oak: for $39.95 a month you get everything that the Evergreen plan has along with adding up to 5 staff members to your account. They will have access to team expense reports, management tools and project details.
What would make FreshBooks better?
Not every program is perfect and FreshBooks does have a few drawbacks. For one, you can’t calculate or record your quarterly estimated tax payments (QET’s) like you can with GoDaddy Bookkeeping — which is why I use both types of software.
Of course you can simply look at your P&L and times that by 20% (the average amount a self-employed business owner will have to pay in SE tax at the end of the year). And then record your payments manually by clicking the New Expense button.
Another thing to realize about FreshBooks is that it’s all completely done online so you can’t download it to your desktop and use it offline. There always needs to be an internet connection, whether it’s on your computer, iPhone or iPad.
This drawback doesn’t particularly bother me since my entire business is run online anyway, but it’s worth noting.
This is the number one bookkeeping software I personally use and recommend to other freelancers and business owners. Try FreshBooks out for free and stop wasting time on getting paid.