Freshbooks vs. Quickbooks: Full Review and Comparison

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This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

Article Approved By Banking Expert

This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

In the world of accounting software, the name Quickbooks is about as household as you get. It’s been around, in some form of another, since the early 1980s, and it continues to be an excellent choice for small business bookkeeping software.

However, a lot has changed since the 80s, and although Quickbooks is still a great product, there are lots of other options. One such option, Freshbooks, offers small, service-based businesses the chance to create and send invoices, as well as do basic income and expense tracking, providing you with an easy-to-use solution for your bookkeeping needs.

Because it specializes in dealing with these small, service-based business, Freshbooks might seem like a good choice. However, it’s not that simple. Which one is right for you will depend on your needs as well as your budget.

We recommend Freshbooks for businesses that are only interested in sending invoices, either for billable hours or some other work and tracking basic expenses.

If you need to do anything else, such as reconcile bank statements, manage inventory, track project profitability, record sales tax, maximize tax deductions, manage 1099 contractors, and more, Quickbooks is going to be a much better choice.

Our full review and comparison goes into more details about the differences between the two, and we hope this will make it much easier for you to decide which one is best.

What Are Quickbooks and Freshbooks?

Quickbooks and Freshbooks are both automated accounting and bookkeeping programs.

There are two versions of Quickbooks: Quickbooks Online and Quickbooks Desktop. They do very similar things, except Quickbooks Online is cloud-based, whereas Quickbooks Desktop works on a local computer.

Generally speaking, Quickbooks Desktop allows you to do more, which is why it’s a good option for larger businesses who need help handling more complicated bookkeeping processes.

However, for this review, we’re going to focus on comparing Freshbooks to Quickbooks Online, for these two services are more similar.

If you find yourself needing the features of Quickbooks Desktop, then Freshbooks won’t even come close to meeting your needs.

What Do They Both Do?

Because both Quickbooks Online and Freshbooks are designed to serve a similar purpose, their core feature set is also similar.

You’ll see later on, though, that Quickbooks Online allows you to do much more than Freshbooks. But no matter which one you choose, you’ll be able to:

  • Create, design, and send custom invoices, including recurring invoices
  • Send estimates and quotes
  • Accept payments online via credit/debit card and
  • Track revenue and expenses
  • Generate financial reports
  • Adjust ledgers with journal entries
  • Link bank accounts
  • Integrate third-party services
  • Monitory your books using an easy-to-use dashboard

What’s Unique About Freshbooks?

Because Freshbooks is designed to be more simplistic so that smaller businesses can manage their books more easily, there aren’t a lot of features Freshbooks offers that Quickbooks Online doesn’t.

However, one thing that is different with Freshbooks is that you can track time with any of their plans. So, if you charge clients based on billable hours, you can do this easily with any of Freshbooks’ subscription options.

To do this with Quickbooks Online, you need to subscribe to their second-tier service.

So, if this is a really important feature to you, and you’re not concerned with having access to the other things Quickbooks Online can do, then Freshbooks is the right choice.

What’s Unique About Quickbooks Online?

Quickbooks Online can do everything Freshbooks can do, but it has many additional features that most small business owners will find essential for any bookkeeping software. These features include:

  • Tracking sales tax
  • Managing inventory
  • Monitory project profitability
  • Managing 1099 contractors
  • Reconciling bank statements
  • Producing a chart of accounts
  • Managing vendor bills and vendor credits
  • Managing payroll (add-on service)
  • Accepting in-person payments (requires Quickbooks Payments)

As you can see, Quickbooks Online allows you to do quite a bit more than Freshbooks, and depending on which plan you choose, it might not cost you that much more money, something we’re going to detail right now.

How Much Do They Cost?

Deciding between Quickbooks Online and Freshbooks starts with deciding which features you need, and then from there, you should look at the different plans each one offers.

One of the biggest differences between Quickbooks Online and Freshbooks is that Freshbooks limits you based on the number of clients you have. Let’s go over the different options.

Freshbooks Pricing

Their basic plan, which is called “Lite,” costs $15/month. It allows you to send invoices and estimates, track time, accept online payments, and import expenses from your bank account. However, you will be limited to five (5) clients.

The next two plans offered by Freshbooks are:

  • Plus ($25/month), and
  • Premium ($50/month).

Both offer you the same features, which are everything offered in the Lite plan as well as:

  • Automatic payment reminders
  • Late payment fees
  • Double-entry accounting tools and reports
  • Unique income logging
  • Collaboration with your accountants

However, with the Plus plan, you can have up to 50 clients, whereas with the Premium plan you can have up to 500.

If you have more than 500 clients and bring in more than 150k/year in revenue, you can upgrade to Freshbooks select. But prices vary based on your business, so you’ll need to call to get a quote.

No matter which plan you choose, you will be charged 2.9% + $0.30 per credit card transaction and 1 percent per bank transfer (ACH).

Quickbooks Online Pricing

Unlike Freshbooks, it doesn’t matter how many clients you have. Each plan allows for unlimited clients.

As a result, when you’re choosing between Quickbooks Online plans, you’re decision will be based mainly on which features you need or want. Here’s a breakdown of the different plans, how much they cost, and what you get with each one:

  • Simple Start ($20/month):
    • Track income and expenses
    • Capture and file receipts
    • Maximize tax deductions
    • Create and send invoices and accept payments
    • Send estimates
    • Generate basic reports
    • Track Sales Tax
  • Essentials ($35/month) – Everything from the Simple Start plan plus:
    • Manage bills
    • Provide access to up to 3 users
    • Track time
  • Plus ($60/month) – everything from the Essentials plan plus:
    • Track inventory
    • Manage 1099 contractors
    • Monitor project profitability

When accepting payments, the fees are:

  • 9% + $0.25 per credit card transaction
  • $0.00 for bank transfers.

Free ACH payments are nice, and Quickbooks Online offers slightly lower transaction fees for processing credit card payments, but the savings is so small we don’t think this should factor too much into your decision.

How to Choose the Right Plan

As you can see, Quickbooks Online and Freshbooks are similar but also rather different. To pick the one that’s right for you, start by determining what you need.

If all you need is a system to help you track time, create and send invoices, record income and expenses, and generate reports, then Freshbooks is the way to go. But only if you have more than five clients.

The Freshbooks Lite plan, which costs $15/month, only allows you to work with five clients, which is pretty close to useless.

The next version, Freshbooks Plus, costs $25/month. It still limits you in terms of how many clients you can have, but you can still work with up to 500.

The most basic Quickbooks Online plan is just $20, but it doesn’t allow you to track time. To get this feature, you need to upgrade to the “Essentials” plan, which costs $35/month.

So, for businesses with limited needs, the middle plan offered by Freshbooks offers you the same as the middle plan for Quickbooks at a slight savings of just $10/month. This plan is good for businesses such as:

  • Small businesses with few or no employees
  • Service-based businesses that generate income largely through invoices
  • Agencies, consultants, and other service firms
  • Freelancers

For everyone else, though, Quickbooks Online is going to be the better choice. It has more features, and none of the plans limits you in terms of how many clients you can have.

Quickbooks Online Plus is the most popular option because it allows you to do pretty much everything Quickbooks offers.

If you find none of the Quickbooks Online packages meet your needs, then you may want to investigate Quickbooks Desktop. It boasts more features that will allow you to tackle more complicated bookkeeping tasks.

Conclusion

Both Quickbooks Online and Freshbooks are useful tools, so long as you get the one best suited for your needs.

Freshbooks is perfect for small businesses who rely solely on invoicing for billable hours and other services, and Quickbooks Online is good for pretty much everyone else.

We hope this review and comparison has helped you make a decision, but if you’re still on the fence, then consider giving one a try for free to see which will satisfy your bookkeeping needs.