

FreshBooks is a “cloud accounting” service geared toward small business owners who send invoices for services and products. This web-based program helps track billable expenses, time spent on projects, and payment on invoices.
This review will help you decide if FreshBooks can help your small business.
FreshBooks Features
FreshBooks Invoicing & Billing
Table of Contents
Automatic Invoice Reminders: You can set a due date for your invoices which triggers automatic e-mail reminders for your clients. For late payers, FreshBooks can even automatically add late fees to an updated invoice.
Deposit Billing: You can charge a deposit percentage of your total invoice to split costs for the client.
Recurring Invoices: If you offer a monthly or otherwise repeating service, you can set FreshBooks to automatically send out your invoices.
Auto-bill: If your client agrees, FreshBooks can sign them up for auto-billing each month. This service can help you get paid faster than other conventional billing methods.
Paper Invoices: If your client requests it, you can have FreshBooks print and mail your invoice for you (for a small fee).
Client Portal: Each client gets access to a private portal with a login that allows them to view current and past invoices all in one place.
Payment Processor: The credit card fees for FreshBooks Payment are automatically invoiced and billed to the client, but you can still use PayPal, Swipe, or other third party processors.
FreshBooks Expenses
Estimates: You can craft an estimate and send it to a client. If the client clicks “Accept,” you are notified and can easily convert the estimate into an invoice.
Track Billable Time: Log in and set the timer when you work on projects to easily add billable hours to your invoices.
Mobile App: Use the time tracker while on-the-go, take pictures of receipts for your expenses, and send an invoice or estimate on location. The app works on iOS and Android devices, including phones and tablets.
Editor’s Note: Looking for information on payroll services? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need:
Over 20 Reports: Easily produce reports to check on payments owed to you, profits and losses, expenses, taxes, time sheets, revenue per client and more.
FreshBooks Project and Team Management (Evergreen and Mighty Oak Packages)
Create and Assign Projects: Create titled projects or assignment and select a staff member to serve as a project manager and other staff as contributors. You can even choose how many hours are allotted to the project and at what billing rate.
Create Tasks: You can add and assign simple tasks associated with each project so everyone is on the same page.
Customize Staff Access: Choose which staff members can create or send an invoice, manage client information and more.
Track Staff Time: With individual staff log-ins, you can track their billable hours for each project.
FreshBooks Pricing
The Good On FreshBooks
Great integration: FreshBooks has incredibly extensive integration with third party platforms. You can use this program with Gmail, MailChimp, Bidsketch, and QuickBooks, and that’s just for starters. Tax software, third party help desk services, project and team management apps, payroll, CRM, shopping carts, and other business services are all represented in FreshBooks’ add-ons.
“Get paid faster:” One of the main selling points of FreshBooks is the ease of invoicing and charging clients. The streamlined and automated process makes getting paid faster than dealing with lots of paperwork, following up on late payers, etc.
Easy Set-Up: Getting started is surprisingly easy. You fill out a simple form with basic information about your business. Next you have the option to watch a few short videos to familiarize yourself with the dashboard and features. Once you link your bank account and set up contact information for your clients, you’ll be in business.
Security: There are multiple layers of cyber-security employed considering the sensitive information used in this program. Beyond your typical 265-bit SSL encryption, FreshBooks has intrusion and hacking detection, server vulnerability scanning, and AES encryption for credit card and banking information. They also have off-location physical backup servers to keep your information safe in case of damage to or failure of the main server. This should reassure business owners who are skeptical of the “cloud-based” service.
Client read notification: Because FreshBooks sends links for invoices, it can also tell you if and when a client has opened the link, or “read,” the invoice. No more, “I never received it!” confusion.
Separate products and services: The standard invoice has one section for products and another for services. This makes breakdowns and total amounts easier to understand for both the client and the business owner.
Bank connection for expenses: If you connect your business checking account, you can import and convert expenses into a billable item.
May save in fees: If you choose to use FreshBooks Payments, which is run through WePay, you may save in fees over PayPal or Stripe. These fees are also auto-imported as an expense that is passed onto the client. Visa and MasterCard are charged at 2.9% + $0.30 per transaction. American Express processing, which is currently only available in the United States, is 3.5% + $0.30 per transaction.
The big bonus here is auto-billing, which does not charge fees. This can be a sell to your client, since they are charged the processing fees if you choose to use FreshBooks Payments. The auto-bill in turn helps you get paid on time and hassle-free.
Project Management: The interface is very simple, but depending on your business needs, the project management tool may work for you. You can also integrate it with a third party management service like Basecamp.
Invite accountant with their own log-in: One of the newest (and most useful) features is the Accountant Center, a private log-in for your accountant. He or she can have access to necessary information and journal entries to help you keep your accounting in order.
Customer service: FreshBooks has award-winning, quick and efficient customer service. They aim for “small town, small business values,” and they succeed. In fact, the company rotates phone support among all of its employees. If you call their 800 number, you may even have the CEO and co-founder Mike McDermott answering your questions.
The Bad On FreshBooks
Not truly accounting-oriented: Despite the “cloud accounting” tag, FreshBooks is not entirely accounting friendly. It does not allow for double-entry bookkeeping and has no general ledger, among other glaringly missing features. However, as an invoice and billing service, it holds its own among the competitors.
No accounts payable: While you can add expenses from your linked bank account (or add them manually), there is no solid accounts payable. This is especially a problem with bills, since you cannot track who you owe, how much you owe them, or when the due dates are. You will want to track these expenses in another program to get a more accurate measure of your finances with both debts and income balanced together.
No default tax rate: Each time you send an invoice, you will need to select the appropriate tax rate. You cannot save this rate to a client’s information file. This can be a bit tedious if you deal with a lot of invoices.
Buggy unbillable expenses: You are in a bit of a bind if you have an expense associated with a particular client or project but do not want to forward that expense as a cost on your invoice. There is nowhere to save or track these kinds of expenses. It’s either billed to the client or it’s a general expense calculated on your profits and losses.
Limited invoice customization: You are very limited in how you can customize the design of your invoices. You can change the color scheme and add your own logo, but that’s about it. You may have to get creative with how you enter or organize information on your invoices.
Only cloud-based: You must have an Internet connection to work on your FreshBooks invoices and billing. There is no offline downloadable program, although you can use your cell phone’s wireless data plan in a pinch.
Our Verdict On FreshBooks
Although it bills itself as a “cloud accounting” service, FreshBooks is really best suited for invoicing and client billing.
We also recommend taking advantage of FreshBooks’ add-ons. Use it in conjunction with QuickBooks, Xero or another full-fledged accounting software, and you should have all of your bases covered.
Editor’s Note: Looking for information on payroll services? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need:
While you can use FreshBooks for retail or product-based businesses, it seems best suited for service-based industries like photographers, home repair, graphic designers, etc.
Since the accounting features are somewhat limited yet the program itself is also excellent for invoicing, it can be hard to recommend or discourage looking into FreshBooks. Luckily, there is a free trial. We advise signing up for the trial and seeing how well the features and tools suit your needs.