FreshBooks started its life as an invoicing solution.
Over the years, it has expanded in scope and grown into the go-to online accounting service for sole proprietors and startups.
Its popularity extends to small to midsize businesses (SMBs) in many cases.
The site went through a major update a few years ago, and many features in FreshBooks "Classic" were left behind, though they continue to be reintroduced.
This new FreshBooks is the best choice for the smallest businesses because of its exceptional usability and aesthetic properties—and its smart selection of features.
It is our Editors' Choice pick in the freelancer category.
How Much Does FreshBooks Cost?
FreshBooks is available for $15 per month for the Lite plan, which lets you bill up to five clients.
For $25 per month, the Plus plan lets you bill 50 clients, and for $50 per month, you can bill as many as 500 clients with the Premium plan (some customers have been asking for a tier between Plus and Premium to be able to bill between 50 and 500 clients).
Custom pricing is available above that level.
Besides the number of clients served, all of the plans offer the same features (though some are added between tiers), and you can enjoy a 30-day free trial at any tier, too.
FreshBooks is expensive when compared to the free Wave and Sunrise, but its usability and tightly focused features make it worth the cost.
Old FreshBooks and New
FreshBooks' site has undergone some very significant changes.
Most importantly, FreshBooks now adheres to the rules of double-entry accounting, the industry-standard bookkeeping method that accountants and other small business accounting websites use.
How does this change affect the way you use FreshBooks? For the most part, it doesn’t.
You still engage in activities like creating invoices, tracking time, and receiving payments the way you always have.
But your accounting records have a new, solid framework that provides more structured record keeping and improved insight into your finances.
Specifically, FreshBooks now has a Chart of Accounts and General Ledger; two new accounts, Other Income and Cost of Goods Sold (COGS); bank reconciliation; and two additional standard financial reports (Trial Balance and Balance Sheet).
FreshBooks still hasn't incorporated all of the tools found in FreshBooks Classic, but it brought over a big one this year: inventory tracking.
It’s also added a new user role (manager), automatic mileage tracking in the iOS app, and checkout links (clients can make payments without being invoiced).
Contractors can track their own time, and managers have greater control over reports.
There are two new tabs in Projects: Invoices and Expenses.
FreshBooks has also added numerous enhancements to invoices and the overall workflow.
For example, there’s a new Preview tab.
Invoices now display unbilled time and expenses.
The client message is customizable, and clients can make partial payments, too.
FreshBooks has made more improvements (both large and small) to its service than any other site I reviewed.
An Effective UI
FreshBooks has also enhanced its onboarding process.
It first asks a few basic questions about your business (such as what you do and how you bill).
You provide contact information and are encouraged to invite your team members to set up accounts.
Then, Freshbooks drops you into the main site, where you encounter a box with three setup steps.
One of those is to customize your invoices (options are limited to two templates, logo, background color, and two fonts).
I had some trouble adding my logo.
Most sites just ask for a graphics file and position the logo on the sales form.
FreshBooks takes your file and uses it to fill an oblong box.
So, I was only able to include a part of my logo.
When you close the setup box, you’re on the site’s Dashboard, with no further guidance on how to get started.
Wave and Xero offer much better onboarding tools that walk you through numerous setup steps.
The Dashboard gives you a quick overview of your company's financial status.
There are five 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.
Spending displays your expenses by category.
FreshBooks added two more last year: Revenue Streams and Unbilled Time.
Links to support and to a page describing what's new in FreshBooks appear in the lower right.
Links in the upper right take you to pages where you can invite team members (including an accountant) at various permission levels and create new records and transactions.
Unfortunately, you have to scroll a lot to see the charts, and there's no to-do list, like in GoDaddy Bookkeeping.
A vertical pane to the left of the dashboard displays navigation links to the core areas of the tool: Dashboard, Clients, Invoices, Payments, Expenses, Estimates, Time Tracking, Projects, My Team, Integrations, Reports, Accounting, and Add-ons.
Click the link above this list, next to your company name, and a list of the site’s settings opens.
Here you can, for example, add additional businesses, contact support, create item and service records, and integrate third-party apps (there are 100+ now).
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, then FreshBooks connects to their websites and imports your account transactions.
And by signing up for FreshBooks Payments or Stripe, you can start accepting credit cards.
Finally, the small bell icon in the upper left takes you to updates about your clients, team members, and other business issues.
Overall, FreshBooks has the simplest, most intuitive, and most attractive screen displays of all the services I've reviewed recently.
It's easier to read at glance than Kashoo, for example.
It can, however, take a while for a user of the old FreshBooks interface to get oriented.
Fortunately, FreshBooks offers plenty of guidance, including a searchable help database and email and phone support.
Creating Invoices in FreshBooks
Click the Invoices tab in the toolbar to open a screen that tells you everything you need to know about your accounts receivable (though the site doesn't use that accounting term) status.
With the "from me" tab highlighted ("to me" opens a page for invoices you've received from other FreshBooks users), you'll see dollar totals for invoices that are overdue, outstanding, and in the draft stage.
Below are links to your most recently updated invoices.
A list of all invoices and recurring templates appears at the bottom.
FreshBooks’ Invoice page provides a lot of information about your recent and historical invoices. FreshBooks supports two additional types of transactions: estimates and proposals, both of which can be converted to invoices.
A proposal is a much more detailed version of an estimate that can be signed by the client on acceptance (FreshBooks allows electronic signatures).
It can include descriptive text and tables and can span several pages.
No competing tools offer such an advanced option.
New since the time of our last review is the ability to create retainers, which you can use when you're setting up an ongoing business relationship with a client who may require more complex invoicing.
To get started here, click New Invoice.
An invoice template opens with your contact information and logo, the current date and due date, and an invoice number filled in.
You complete the rest by selecting items or services and entering quantities.
If you've created sales tax rates already, then the correct one should be assigned.
You can add a discount, which many sites allow.
But you can also request a deposit and set up a payment schedule.
The latter is unique to FreshBooks.
Once it's completed, you can save or send it.
FreshBooks gives you some control over the look of your invoices. One caveat here: 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), FreshBooks will bill you at the higher cost starting on your next payment date.
Your customers can make payments to you by using FreshBooks' own payment function (which is actually rebranded from payment processing service WePay).
It costs 2.9 percent plus 30 cents per transaction, which is effectively the industry standard.
You can also accept payments through Stripe.
FreshBooks makes your most commonly used invoice settings available to you when you’re working on an invoice. You can set up sales taxes right from your invoices, too.
There's an Add Taxes link directly below each item's rate.
Click on it, and a small window opens where you can define multiple sales taxes.
You can either check a box to apply those taxes to all line items on the invoice or assign them individually.
FreshBooks does not directly integrate with a sales tax service like gold standard Avalara, but even without this, it handles sales taxes like most competitors do.
The Sales Tax Summary report will help you fill out any necessary related reports.
Context-Sensitive Settings
As you work on invoices, FreshBooks displays links to context-sensitive settings.
This is unique to FreshBooks.
Other tools have one giant section of the site in which you define all of its settings.
This context sensitivity is great feature, one that saves time and constantly reminds you of options available.
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, and set up online payments.
Additional context-sensitive settings appear once you save an invoice.
If you're using any version of FreshBooks except for Lite, you can send reminders at designated intervals and charge late fees, which is unusual in this group of tools.
You can also reopen any saved invoices and edit it, or click the More Actions button for additional tasks, such as emailing the form, applying a payment, or creating a PDF file.
You can also view the invoice's history.
When you create a new Client record in FreshBooks, you basically only supply contact information.
But your client home page will eventually populate with information.
Client records display their contact as digital business cards of sorts.
They contain fields for each client's name, mailing and email addresses, and phone numbers.
A chart next to the client card shows how much outstanding revenue is associated with that client, and breaks it down into draft invoices, available credit, unbilled time, and unbilled expenses.
Below is a table that displays lists of invoices, retainers, credit, expenses, estimates, time-tracking, projects, and reports for that client.
You can toggle between them by clicking tabs.
While you record individual expenses in FreshBooks, you can change some settings on the fly and attach a receipt. Click the Relationship tab at the top of the screen to see a transaction history.
This is a terrific, comprehensive set of screens that unparalleled in this group of websites.
If you've connected one or more bank accounts to FreshBooks, you see a list of recent transactions when you click the Expenses tab in the left vertical pane.
FreshBooks tries to automatically categorize these (with choices like 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, which you definitely should, as this information is very important for use in reports and taxes.
Whether you enter an expense manually or edit one you've imported, you can add or modify a lot of detail.
The five most recently updated expenses appear at the top of the Expenses screen; they look like strips of cash register tape.
Individual expense records in the list below that contain fields for the vendor, category, date, source, client/project/description, and amount/tax/status.
You can attach a file, drag and drop a receipt image, mark the expense as billable to a specific client, change the currency, and designate it as Cost of Goods Sold (COGS).
No competitor in this group offers such comprehensive expense records.
But FreshBooks doesn't estimate quarterly income tax payments, like Intuit QuickBooks Self-Employed and GoDaddy Bookkeeping do.
FreshBooks offers richer project management functionality than its competitors.
To get started, give your project a name and assign team members to it as admins, managers, employees, or contractors (each role has its own access restrictions).
You can assign it to an external client if you're doing the project for someone else, so they can collaborate and be billed, and enter an hourly budget and end date.
You have two billing options: hourly or flat project rate.
If you select hourly, you can choose from among a single hourly rate or rates by team member or service.
FreshBooks allows you to thoroughly document your project hours and expenses.
It provides a detailed overview of the project. To specify the services for a project, click the Add Service button and type a descriptive name.
FreshBooks adds each one to a list of all the services you've added, which it displays every time you create a new project.
When it's time to start adding time entries for your project, you have two options: start and stop a timer or enter the hours manually by filling out the fields in a small window.
You can add expenses here, too, and earmark both them and time entries billable.
Each project has its own home page, where you can review your entries and add more, as well as exchange messages with your team members.
Invoice templates don’t include a field for Project, but you can, of course, bill clients for the hours worked and expenses incurred.
When you select a client in an invoice that has either of those items, you'll see them in the list that drops down.
Click Add to include it on the invoice and a new window opens displaying unbilled time and expenses.
You can select any you want included and they appear as line items when you return to the invoice.
Both Time Entries and Projects can be automatically converted to invoices.
FreshBooks' Mobile Apps
FreshBooks offers Android apps and iOS apps that are largely...
FreshBooks started its life as an invoicing solution.
Over the years, it has expanded in scope and grown into the go-to online accounting service for sole proprietors and startups.
Its popularity extends to small to midsize businesses (SMBs) in many cases.
The site went through a major update a few years ago, and many features in FreshBooks "Classic" were left behind, though they continue to be reintroduced.
This new FreshBooks is the best choice for the smallest businesses because of its exceptional usability and aesthetic properties—and its smart selection of features.
It is our Editors' Choice pick in the freelancer category.
How Much Does FreshBooks Cost?
FreshBooks is available for $15 per month for the Lite plan, which lets you bill up to five clients.
For $25 per month, the Plus plan lets you bill 50 clients, and for $50 per month, you can bill as many as 500 clients with the Premium plan (some customers have been asking for a tier between Plus and Premium to be able to bill between 50 and 500 clients).
Custom pricing is available above that level.
Besides the number of clients served, all of the plans offer the same features (though some are added between tiers), and you can enjoy a 30-day free trial at any tier, too.
FreshBooks is expensive when compared to the free Wave and Sunrise, but its usability and tightly focused features make it worth the cost.
Old FreshBooks and New
FreshBooks' site has undergone some very significant changes.
Most importantly, FreshBooks now adheres to the rules of double-entry accounting, the industry-standard bookkeeping method that accountants and other small business accounting websites use.
How does this change affect the way you use FreshBooks? For the most part, it doesn’t.
You still engage in activities like creating invoices, tracking time, and receiving payments the way you always have.
But your accounting records have a new, solid framework that provides more structured record keeping and improved insight into your finances.
Specifically, FreshBooks now has a Chart of Accounts and General Ledger; two new accounts, Other Income and Cost of Goods Sold (COGS); bank reconciliation; and two additional standard financial reports (Trial Balance and Balance Sheet).
FreshBooks still hasn't incorporated all of the tools found in FreshBooks Classic, but it brought over a big one this year: inventory tracking.
It’s also added a new user role (manager), automatic mileage tracking in the iOS app, and checkout links (clients can make payments without being invoiced).
Contractors can track their own time, and managers have greater control over reports.
There are two new tabs in Projects: Invoices and Expenses.
FreshBooks has also added numerous enhancements to invoices and the overall workflow.
For example, there’s a new Preview tab.
Invoices now display unbilled time and expenses.
The client message is customizable, and clients can make partial payments, too.
FreshBooks has made more improvements (both large and small) to its service than any other site I reviewed.
An Effective UI
FreshBooks has also enhanced its onboarding process.
It first asks a few basic questions about your business (such as what you do and how you bill).
You provide contact information and are encouraged to invite your team members to set up accounts.
Then, Freshbooks drops you into the main site, where you encounter a box with three setup steps.
One of those is to customize your invoices (options are limited to two templates, logo, background color, and two fonts).
I had some trouble adding my logo.
Most sites just ask for a graphics file and position the logo on the sales form.
FreshBooks takes your file and uses it to fill an oblong box.
So, I was only able to include a part of my logo.
When you close the setup box, you’re on the site’s Dashboard, with no further guidance on how to get started.
Wave and Xero offer much better onboarding tools that walk you through numerous setup steps.
The Dashboard gives you a quick overview of your company's financial status.
There are five 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.
Spending displays your expenses by category.
FreshBooks added two more last year: Revenue Streams and Unbilled Time.
Links to support and to a page describing what's new in FreshBooks appear in the lower right.
Links in the upper right take you to pages where you can invite team members (including an accountant) at various permission levels and create new records and transactions.
Unfortunately, you have to scroll a lot to see the charts, and there's no to-do list, like in GoDaddy Bookkeeping.
A vertical pane to the left of the dashboard displays navigation links to the core areas of the tool: Dashboard, Clients, Invoices, Payments, Expenses, Estimates, Time Tracking, Projects, My Team, Integrations, Reports, Accounting, and Add-ons.
Click the link above this list, next to your company name, and a list of the site’s settings opens.
Here you can, for example, add additional businesses, contact support, create item and service records, and integrate third-party apps (there are 100+ now).
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, then FreshBooks connects to their websites and imports your account transactions.
And by signing up for FreshBooks Payments or Stripe, you can start accepting credit cards.
Finally, the small bell icon in the upper left takes you to updates about your clients, team members, and other business issues.
Overall, FreshBooks has the simplest, most intuitive, and most attractive screen displays of all the services I've reviewed recently.
It's easier to read at glance than Kashoo, for example.
It can, however, take a while for a user of the old FreshBooks interface to get oriented.
Fortunately, FreshBooks offers plenty of guidance, including a searchable help database and email and phone support.
Creating Invoices in FreshBooks
Click the Invoices tab in the toolbar to open a screen that tells you everything you need to know about your accounts receivable (though the site doesn't use that accounting term) status.
With the "from me" tab highlighted ("to me" opens a page for invoices you've received from other FreshBooks users), you'll see dollar totals for invoices that are overdue, outstanding, and in the draft stage.
Below are links to your most recently updated invoices.
A list of all invoices and recurring templates appears at the bottom.
FreshBooks’ Invoice page provides a lot of information about your recent and historical invoices. FreshBooks supports two additional types of transactions: estimates and proposals, both of which can be converted to invoices.
A proposal is a much more detailed version of an estimate that can be signed by the client on acceptance (FreshBooks allows electronic signatures).
It can include descriptive text and tables and can span several pages.
No competing tools offer such an advanced option.
New since the time of our last review is the ability to create retainers, which you can use when you're setting up an ongoing business relationship with a client who may require more complex invoicing.
To get started here, click New Invoice.
An invoice template opens with your contact information and logo, the current date and due date, and an invoice number filled in.
You complete the rest by selecting items or services and entering quantities.
If you've created sales tax rates already, then the correct one should be assigned.
You can add a discount, which many sites allow.
But you can also request a deposit and set up a payment schedule.
The latter is unique to FreshBooks.
Once it's completed, you can save or send it.
FreshBooks gives you some control over the look of your invoices. One caveat here: 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), FreshBooks will bill you at the higher cost starting on your next payment date.
Your customers can make payments to you by using FreshBooks' own payment function (which is actually rebranded from payment processing service WePay).
It costs 2.9 percent plus 30 cents per transaction, which is effectively the industry standard.
You can also accept payments through Stripe.
FreshBooks makes your most commonly used invoice settings available to you when you’re working on an invoice. You can set up sales taxes right from your invoices, too.
There's an Add Taxes link directly below each item's rate.
Click on it, and a small window opens where you can define multiple sales taxes.
You can either check a box to apply those taxes to all line items on the invoice or assign them individually.
FreshBooks does not directly integrate with a sales tax service like gold standard Avalara, but even without this, it handles sales taxes like most competitors do.
The Sales Tax Summary report will help you fill out any necessary related reports.
Context-Sensitive Settings
As you work on invoices, FreshBooks displays links to context-sensitive settings.
This is unique to FreshBooks.
Other tools have one giant section of the site in which you define all of its settings.
This context sensitivity is great feature, one that saves time and constantly reminds you of options available.
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, and set up online payments.
Additional context-sensitive settings appear once you save an invoice.
If you're using any version of FreshBooks except for Lite, you can send reminders at designated intervals and charge late fees, which is unusual in this group of tools.
You can also reopen any saved invoices and edit it, or click the More Actions button for additional tasks, such as emailing the form, applying a payment, or creating a PDF file.
You can also view the invoice's history.
When you create a new Client record in FreshBooks, you basically only supply contact information.
But your client home page will eventually populate with information.
Client records display their contact as digital business cards of sorts.
They contain fields for each client's name, mailing and email addresses, and phone numbers.
A chart next to the client card shows how much outstanding revenue is associated with that client, and breaks it down into draft invoices, available credit, unbilled time, and unbilled expenses.
Below is a table that displays lists of invoices, retainers, credit, expenses, estimates, time-tracking, projects, and reports for that client.
You can toggle between them by clicking tabs.
While you record individual expenses in FreshBooks, you can change some settings on the fly and attach a receipt. Click the Relationship tab at the top of the screen to see a transaction history.
This is a terrific, comprehensive set of screens that unparalleled in this group of websites.
If you've connected one or more bank accounts to FreshBooks, you see a list of recent transactions when you click the Expenses tab in the left vertical pane.
FreshBooks tries to automatically categorize these (with choices like 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, which you definitely should, as this information is very important for use in reports and taxes.
Whether you enter an expense manually or edit one you've imported, you can add or modify a lot of detail.
The five most recently updated expenses appear at the top of the Expenses screen; they look like strips of cash register tape.
Individual expense records in the list below that contain fields for the vendor, category, date, source, client/project/description, and amount/tax/status.
You can attach a file, drag and drop a receipt image, mark the expense as billable to a specific client, change the currency, and designate it as Cost of Goods Sold (COGS).
No competitor in this group offers such comprehensive expense records.
But FreshBooks doesn't estimate quarterly income tax payments, like Intuit QuickBooks Self-Employed and GoDaddy Bookkeeping do.
FreshBooks offers richer project management functionality than its competitors.
To get started, give your project a name and assign team members to it as admins, managers, employees, or contractors (each role has its own access restrictions).
You can assign it to an external client if you're doing the project for someone else, so they can collaborate and be billed, and enter an hourly budget and end date.
You have two billing options: hourly or flat project rate.
If you select hourly, you can choose from among a single hourly rate or rates by team member or service.
FreshBooks allows you to thoroughly document your project hours and expenses.
It provides a detailed overview of the project. To specify the services for a project, click the Add Service button and type a descriptive name.
FreshBooks adds each one to a list of all the services you've added, which it displays every time you create a new project.
When it's time to start adding time entries for your project, you have two options: start and stop a timer or enter the hours manually by filling out the fields in a small window.
You can add expenses here, too, and earmark both them and time entries billable.
Each project has its own home page, where you can review your entries and add more, as well as exchange messages with your team members.
Invoice templates don’t include a field for Project, but you can, of course, bill clients for the hours worked and expenses incurred.
When you select a client in an invoice that has either of those items, you'll see them in the list that drops down.
Click Add to include it on the invoice and a new window opens displaying unbilled time and expenses.
You can select any you want included and they appear as line items when you return to the invoice.
Both Time Entries and Projects can be automatically converted to invoices.
FreshBooks' Mobile Apps
FreshBooks offers Android apps and iOS apps that are largely...
