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, FreshBooks Cloud Accounting is one of the best. It has features so you can track your time, create invoices to all your clients, and even manage important expenses for projects.
Use this in-depth tutorial to find out how to use FreshBooks to keep my online business 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.
Getting paid on time is one of the most important parts of being a freelance business owner, and FreshBooks makes that happen.
You can learn even more about the capabilities of this software, by checking out this detailed review of FreshBooks Cloud Accounting prepared by experts from FinancesOnline, an independent review platform.
How to use FreshBooks for your small business
I’ve personally been using FreshBooks for my online business for over 4 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 and record the payment.
They also have an iPhone and iPad app so you can track it on your mobile device anywhere!
If you just want a simple invoice template that’s completely free, check out their nifty invoice creator tool.
An example of my invoices that I send out using FreshBooks.
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 available in FreshBooks:
- 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 Cloud Accounting seamlessly integrates with other bookkeeping programs, like:
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 the FreshBooks website for a complete list of programs and add-ons that the program integrates with.
I have mine synced with my ConvertKit 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.
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 you log into your FreshBooks account you can see of your transactions at a glance. It easily syncs with any business checking account that you have so you can bill out 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 Cloud Accounting at a super affordable rate!
8. Clients can make partial payments
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 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.
(New) FreshBooks features
Tax time is the dreaded time of year for small business owners. Luckily there are reports inside FreshBooks that can help.
- Profit & Loss Report – The king of all reports, your Profit & Loss lists all the money you’ve brought in this year as well as all of your expenses—giving you a net profit or net loss. This is an essential report come tax time, as it contains the information you’ll need to report on for your tax returns.
- Expense Reporting – While the Profit & Loss report is perfect for an overview, sometimes you need to really dig into the numbers. You may be asking yourself why your expenses were so high in a certain month, or why you have expenses categorized a certain way. That’s where the Expense Report will come in handy.
- Payments Collected – Now that you’ve looked at your expenses, you can focus next on money that’s flowing into your business—your income. The Payments Collected report gives you a breakdown of all the payments you’ve received, when they occurred, which client they came from and the method of payment.
- Payment Scheduling – FreshBooks users now have the ability to set up a Payment Schedule on invoices so clients can pay them in multiple and partial installments. No more having to create multiple invoices, or continually editing an existing invoice whenever a new payment is due! This feature is located at the bottom of new invoices!
FreshBooks Cloud Accounting pricing plans
A good FreshBooks review wouldn’t be complete without the pricing plans. You can start with a free 60-day trial, to see if you like it, too.
- Lite: for $15 a month you can manage up to 5 clients and send an unlimited amount of invoices. The FreshBooks logo will be removed and you get access to all the other main features.
- Plus: for $25 a month you can have up to 50 active clients, send unlimited and unbranded, invoices. You can also add one staff member to your account. This is the current package that I use for my freelance business.
- Premium: for $50 a month you can manage 500 active clients as well as get access to everything that the Plus plan offers. You can add additional 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 QuickBooks Self-Employed — 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 one of the best bookkeeping programs that I personally recommend to other freelancers and business owners!
Try FreshBooks Cloud Accounting free for 60 days and stop wasting time on getting paid.