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FreshBooks The new version of FreshBooks is a polished, intuitive web service that supports most things small businesses need from an accounting system. However, it now lacks some features from the previous edition that you some users may have liked.

FreshBooks

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MSRP
$15.00
  • Pros

    Exceptional user experience. New team collaboration tools, estimates, and projects. Multiple businesses. Settings are context-sensitive.

  • Cons

    No product or service records. No inventory tracking. Lacks expansive customer records.

  • Bottom Line

    The new version of FreshBooks is a polished, intuitive web service that supports most things small businesses need from an accounting system. However, it now lacks some features from the previous edition that you some users may have liked.

FreshBooks (which begins at $15 per month) recently made a bold move: it started from scratch with its popular online invoicing application. The new FreshBooks provides a much improved user experience (UX) in order to to make the site easier and faster to navigate, improve collaboration, and be able to rapidly deliver product enhancements. At the time of this writing, however, it is still missing some functionality of what the company is now calling FreshBooks Classic. The end result is an excellent online accounting service for freelancers and sole proprietors, but one that's not quite mature enough to take top honors—yet.

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At this writing, old features not included in the new version include product and service records, inventory tracking, expansive customer records, and numerous reports. Additional features are expected to be moved over from Classic, while the new version offers some tools previously unavailable on the site. These future upgrades include bank reconciliation and non-invoice income recording, expanded reporting, and additional partner integrations. Current FreshBooks users can choose to stay on Classic or move to the new version, but anyone signing up will automatically be put on the relaunched website. FreshBooks is not double-entry accounting like its competitors, but its user experience and invoicing tools are exceptional.

Pricing and Setup

FreshBooks is available for as little as $15 per month for the Lite plan, which lets you bill up to 5 clients. For $25 per month, the Plus plan lets you bill 50 clients, and for $50 per month, you could bill as many as 500 clients with the Premium plan. Besides the numbers of clients served, all the plans offer the basic features, and you can try a 30-day free trial at any tier, too. Those are reasonable prices, but consider that Editors' Choice Wave is free.

Once you've signed up, it only takes a couple minutes to get started invoicing. You'll have to supply company contact details and select your industry from a list. You still have access to all the site's features no matter the industry you choose, but FreshBooks displays context-sensitive settings on some screens that are appropriate for your workmore on that later.

An Improved UI

The first screen you see after setup is the site's dashboard, which gives you a quick overview of your company's financial status. There are three charts. Outstanding Revenue tells you who owes you money and who is behind on payments. Total Profit, of course, gives you a real-time number for your current profit (or loss); you can change the date range for this graphic. And Spending displays your expenses by category. Links to six commonly used reports (Accounts Aging, Invoice Details, Time Entry Details, and so on) lie below these graphs. Unfortunately, you can't drill down on these as you can in Wave. Most competitors have moved or are moving in the direction of this kind of dashboard overview, since businesspeople want a quick first look at their overall income and expenses.

A vertical pane to the left of the dashboard displays navigational links to the core areas of the site: Invoices, Estimates, Clients, Expenses, Projects, and Time Tracking. Click the link above it, under your company name, and a list of site settings opens. Here you can, for example, contact support, add team members and contractors, and see your billing information. You can also set up two connections that are critical to FreshBooks operations. If you enter your login credentials for financial institutions at which you have accounts, FreshBooks connects to their sites and import your account transactions. You can start accepting credit cards by signing up for FreshBooks Payments or Stripe, but please note that fees apply.

Click the small bell icon in the upper left, and you get updates about your clients, team members and your business. In the upper right, are two drop-down arrows. One, marked Invite, takes you to links for adding employees or contractors to your FreshBooks account. The other, labeled Create New, displays a list of transactions and records you can enter directly from there, including invoices, clients, estimates, and expenses.

FreshBooks New Expense

Overall, FreshBooks has one of the simplest, most intuitive screen displays of all the sites I've reviewed recently, along with Wave and Kashoo. It can, however, take a while for a user of the old FreshBooks interface to get oriented. This expert design continues through the entire site.

Creating Invoices

Managing billing and invoicing with FreshBooks is a simple task. Though it's still not double-entry accounting like Less Accounting and other competitors, the new FreshBooks is startlingly simple and straightforward.

The choices are all upfront, and the first time you create an invoice you'll probably not have to use the Help function to figure out what goes where. You get to the Invoice screen either by using the left-hand side menu choice or from the Dashboard by using the Create New button in the upper right-hand corner of the screen (which also lets you create new estimates, clients, or expenses). There's really no difference as FreshBooks takes you to the same screen in either case.

As with Intuit QuickBooks Self-Employed, FreshBooks' designers have done a good job organizing features in the software's user interface (UI). The Invoice screen actually contains a lot of information, and there's a toggle where you can view the invoices that you've created, sent, and received as well as those that have been paid. Those invoices might be charges to you that you want to pass on to a customer by adding them onto an invoice you've yet to create.

You can create invoices in this screen or generate them from an Estimate you created earlier. One caveat: Fees for FreshBooks are based on the number of clients you designate as active. If you add a new client during the invoicing process and you previously had five active clients (which is the upper limit of the initial pricing tier), then you might find yourself being billed at the next higher price tier.

FreshBooks - Invoices

You can customize invoices and estimates but don't expect too much flexibility. You can choose between only two formats and several color schemes, and you have the ability to add a logo or image to the top of the form. However, that's the full extent of FreshBooks' customization capabilities, which is a far cry from packages that focus on customizability, such as Invoice2Go.

One of FreshBooks' really nice features is that, when you click on Invoices Due, you get a list of the invoices in various states. This helps you determine whether a particular invoice is in draft or has been sent. You can even tell if the recipient has viewed the invoice. This lets you check a few days after the invoice is sent and follow up with another email or a phone call if the customer hasn't yet even looked at your invoice. Automatic reminders are available and you can set the interval to wait until this feature is triggered.

FreshBooks - New Expense

Another great feature is the ability to create proposals in addition to estimates. An estimate is essentially a tentative invoice that, when accepted, you can easily convert into an actual invoice. A proposal can be much more detailed, have narrative text and tables, and can span several pages. A proposal can also be used as a Statement of Work (SOW), which when signed, becomes a contract. This is a very rare feature in most billing and invoicing applications but comes in handy in many situations.

Your customers can make payments to you by using FreshBooks' own payment function (which is actually rebranded from payment processing service WePay), and costs 2.9 percent plus 30 cents per transaction, which is effectively the industry standard.

Sales taxes are handled easily and you can define several different taxes and/or tax rates. You add the sales tax to an item by adding a line item and clicking on the rate, which gives you the option to add tax. Clicking on this option opens a table of available types of taxes and rates, which are completely editable. Plus, you can add as many types of taxes and/or rates as you need. FreshBooks does not directly integrate with a sales tax service, such as Avalera, but even without this, it manages to handle sales taxes well enough. There's even a Sales Tax Summary report to help you fill out any necessary Sales Tax reports.

Context-Sensitive Content

As you're working on invoices, FreshBooks displays links to context-sensitive settings over to the right of the screen. This is unique to FreshBooks. Other sites have one giant section of the site where you define all of its settings. It's a great feature. You can, for example, switch to a different invoice style here. You can also make the invoice recur at specified intervals, either automatically or manually. Others, like Less Accounting, offer recurring transactions.

If you're using a version of FreshBooks above Lite, you can have reminders sent at designated intervals and charge late fees, which is unusual in this group of sites. Once you've saved an invoice, you can open it again and edit it or click the More Actions button for tasks like emailing it or applying a payment. You can also click a link to view the invoice's history.

Estimates are new in FreshBooks, though Wave has offered them for a long time. You can create and manage them much like you did invoices.

Contacts and Expenses

Every small business accounting website has a section for contact records. You'll complete the fields on these much like you used to fill out paper Rolodex cards. Services like Kashoo offer much more detailed forms, but what FreshBooks offers should be fine for most of its users. When you click on the big green New Client button, the next screen displays a graphical representation of a paper card. You just enter each client's name, mailing and email addresses, and phone numbers. FreshBooks does something in addition that I've never seen a site do. It goes out and looks for a picture or logo online that matches your client's contact information. It worked for us when we entered live clients.

Once you've created a record, it appears in the list on the main Clients page. Click on one, and you'll see a history of transactions and other interactions. You can drill down on these entries to see the original forms.

FreshBooks Office Space

If you've connected one or more bank accounts to FreshBooks, you see a list of recent transactions when you click the Expenses tab (you can also manually add new ones). FreshBooks tries to automatically categorize these (Professional Services, Supplies, Meals & Entertainment, Personal, and so on) when it brings them in, but it doesn't always hit the mark. You have to train it at first by correcting inaccurate categories.

To do so, you click on one in the list. A new screen appears displaying the expense as a strip of cash register tape. Click the big green Edit button, and you can modify anything, selecting from a drop-down list of categories and clicking the Apply to Future Imported Expenses link. You can also attach a file, such as a photo of a receipt that you took using FreshBooks' smartphone app. Wave offers this ability, too. Expense Settings off to the right include the option to mark the expense as billable to a client.

Simple Project Definition

If your small business works with projects, you can define them in FreshBooks. Give your project a name, assign it to a client or to internal staff, and enter an hourly budget and end date, if you'd like. Then you have the option to set a blanket billing rate for the project, either hourly or in total. If you're working solo and you're only charging one rate for your work on a project, that's fine. You can also invite employees and contractors to enter their own hours and share ideas within the project. Clients, too, can join in. FreshBooks handles team collaboration very well.

That said, you can't specify a project on an invoice, as you can in Kashoo. In fact, Kashoo devotes an entire page to each project, listing all related transactions and breaking them out by Net Income, Expenses By Account, Unpaid Invoices, etc. FreshBooks doesn't offer a similar comprehensive look at projects.

You can, however, assign time entries to projects in FreshBooks, so there is a way to track the hours spent. There are two options: start and stop a timer, or enter the hours manually by filling out the fields in a small window or grabbing the bars on a graphical timeline. The Time Tracking page lists all entries and shows hours worked by contributor in the timeline. This is viewable as a bar chart.

Awaiting Features

If you've never used FreshBooks before, you shouldn't have too much trouble learning how the new version works. Its design is exceptional and its navigation tools intuitive, but if you're a FreshBooks Classic user, I'd give it some time before moving over. There's just too much missing still, from product and service records to the rich variety of reports that were available in the previous version. Don't get me wrong, the new FreshBooks is already an excellent service, it just needs a little more time and development to bring it up the top spot. In the meanwhile, Wave wins our Editors' Choice for accounting services for freelancers and sole proprietors.

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