We selected FreshBooks as the best invoicing software for small businesses because this cloud-based accounting software makes it so easy to create and send invoices. It allows you to set up recurring invoices, schedule automatic payment reminders, and accept credit and debit card payments for your invoices online. It monitors the status of invoices after you send them, showing you when customers receive and view them. It tracks billable time and expenses, and allows you to add them to invoices, making it a terrific option for freelancers and self-employed professionals as well as agencies and firms that provide professional services, such as those in creative, IT and legal industries.
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FreshBooks is competitively priced and offers four pricing plans, based on the number of clients you work with. The company sometimes offer promotions, such as the 50 percent discount for six months that it offered when we did our testing. You can also take advantage of the 30-day free trial to try out all the features before you subscribe. Here are details on the plans and costs for FreshBooks.
- The Lite plan costs $15 per month and lets you bill up to five clients. With this plan, you can connect your account to your bank feed, track time and accept invoice payments online. There's no limit to the number of estimates and invoices you can send, and you receive free access to the FreshBooks mobile app.
- The Plus plan costs $25 per month and lets you bill up to 50 clients. This plan adds the ability to charge late fees and send recurring invoices, automatic payment reminders and proposals. It now uses double-entry accounting and allows you to run financial reports.
- The Premium plan costs $50 per month and lets you bill up to 500 clients. This plan is identical to the Plus plan but supports a larger client base.
- The Select plan is priced by quote, so you'll need to contact the company and speak with a sales agent who can customize the plan for your business. This plan is for businesses that bill $150,000 or more each year or have more than 400 clients. In addition to Premium features, it gives you a dedicated account manager to work with.
- Additional users cost $10 per person per month. This applies to business partners, contractors and employees you add to your account. The exception is accountants, whom you can invite to access your account for free.
- FreshBooks Payments, which allows you to accept payments online, costs 2.9 percent plus 30 cents per transaction. Alternatively, you can connect your Stripe account to the system.
- Advanced Payments costs $20 per month plus 3.5 percent and 30 cents per transaction. This add-on service gives you a virtual terminal that allows you to accept payments over the phone and in person. Your clients can authorize recurring payments when you have this add-on.
Ease of Use
Setting up an account with FreshBooks is a quick process, requiring minimal steps. There's no credit card required to open a trial account; you simply enter your email address and a password, then click on a link in the email it sends you.
When you log in to your account, you'll notice how clean, organized and clearly labeled the interface is. On the dashboard, you can see an overview of your outstanding invoices, total profit, expenses and advanced reports. The left sidebar makes it easy to navigate the software, and you can use the Create New shortcut at the top of the dashboard to start creating invoices, estimates, expenses and customer profiles. Each screen greets you with tip, task or short video tutorial suggestions to help you start using different features.
FreshBooks has several features to help you accomplish your accounting tasks easier and faster. The invoice and estimate screens have a WYSIWYG interface, making invoice creation a simple process. You can add new customers, products and services as you go, which is a useful feature – some programs require you to add that information before you begin creating invoices or they don't save the information you've manually added. FreshBooks saves this data so you don't have to manually enter it again on future invoices.
Here are some of the ways FreshBooks saves you time with your invoicing:
- On the invoice screen, you can quickly customize the look of your documents to match your branding. You just upload your logo, then choose a template, a font and an accent color. You can also customize your payment terms, add a note to your customer, request a deposit and create a payment schedule directly on your invoice with just a few clicks.
- You can convert estimates and proposals to invoices in two clicks. It's easy to duplicate and tweak past invoices instead of creating new ones from scratch.
- You can mark the time you tracked on a project as billable and add it to an invoice. You can also easily add billable expenses to invoices.
- You can email invoices and receive updates when your clients view and pay them. If you set up FreshBooks Payments or connect the software to your Stripe account, your customers can click a button on the invoice to pay it, eliminating the time you would normally wait for a check to arrive in the mail.
- The software allows you to schedule recurring invoices to be automatically sent weekly, monthly, annually or as frequently as you choose. You can set the number of occurrences and allow customers to save their credit cards for automatic payments.
- You can send automatic payment reminders before or after the due date to encourage customers to be prompt with their invoice payments. You can also set up the software to automatically apply late fees to past-due invoices, as either a percentage or a flat fee.
- Using FreshBooks' mobile app, available for iOS and Android, you can create invoices immediately after meeting with a client rather than waiting until you get back to the office. You can also use the app to capture receipts, chat with customers and check invoice statuses.
Like other popular accounting solutions, FreshBooks connects to your business bank and credit card accounts and automatically imports your expenses each day. Plus, the Premium and Select plans now use double-entry accounting – which is a significant software upgrade – and allow you to create a chart of accounts and run new reports, such as a general ledger, balance sheet and trial balance. Bank reconciliation wasn't yet available at the time of this review, but the company says this feature is coming soon.
Here are a few more things you can do with FreshBooks:
- You can manage projects and base your billing on an hourly or flat rate. A time budget shows how much time you have remaining on the project, how much of your tracked time is unbilled, and a countdown of days until the project's due date. You can monitor how many hours your team members spend on each project, and also share files and discuss the project with them.
- In addition to the reports mentioned above, you can run profit and loss reports, sales tax summaries, accounts aging and expense reports, invoice details, payment collected, and time-entry details. After running reports, you can email them, print them or export them to Excel.
- Nearly 80 apps and integrations are available from FreshBooks, allowing you to connect this accounting software to many other business services and systems you may already use.
- You can invite business partners, employees, contractors and accountants to your FreshBooks account. The information they can access is determined by their user role. Your business partners can access everything except integrations. Employees can access their projects, tracked time and expenses. Contractors can view only the projects you've added them to, and they can track time toward those projects. Accountants can see your dashboard, reports, expenses and invoices, but they cannot create invoices.
Customer support is available weekdays from 8 a.m. to 8 p.m. ET via phone and email, and now by live chat through the software as well. We tried out the live chat feature during our testing and received prompt, helpful assistance. The company's website has a searchable knowledgebase, a blog, free e-books, and a webinar that teaches you how to use the software.
When you invite your customers to projects, they can set up a client account that allows them to comment on documents, such as proposals and estimates. You can reply to their comments and share files and links with them. They can also save their credit card on file, making it easy for them to pay new invoices.
You can format invoices in several languages besides English, such as Spanish, French, German and Swedish. Multicurrency billing is also available; using FreshBooks Payments, you can accept payments in international currencies. These are helpful features if you have an international client base.
FreshBooks is capable accounting software that makes invoicing easy, but there are a few things to consider before you decide if it's the right accounting solution for your business.
- It lacks inventory tracking and vendor management, but it has time-tracking and project management features, so it's best suited for service- and project-based firms and entrepreneurs.
- There are no batch-invoicing shortcuts, which would be useful if, for example, you're invoicing multiple customers for the same service at the same rate.
- With just two templates and fonts to choose from, its invoice customization options are narrower than those of many of its competitors.
- Although most features are available on the mobile app, you can't view reports. If you need to do this on the go, you'll have to use a browser to access your account, which is less convenient.