REVIEW: FreshBooks

October 14th, 2009 | by Christian Harris | 1,731 views

Billing is a pain. Sure the thought of getting rich is incentive enough, but contemplating using SAGE, QuickBooks, or even Excel to create your invoices and manage your books is enough to make you want to pack it all in and go and live on a desert island. That’s where FreshBooks comes in.

The hosted software works impossibly well and gets the job of billing your clients done—without the pain. Wave goodbye to having to do 100 steps to get one thing done in QuickBooks and forget Excel’s exemplary performance in producing poorly formatted invoices. FreshBooks (formerly 2ndSite) makes it beyond easy to handle billing and invoices.

What is FreshBooks and who is it for?

Running a business is hard enough without the headache of financial record keeping. FreshBooks is designed for individuals and small businesses looking for an easy and fast (and perhaps even fun) solution that eases the burden of managing invoices.

While the software keeps features to an absolute minimum—allowing you to get on with running your business—it’s still detailed enough to satisfy all but the most prudent accountants. The best thing of all is that your account is available from any browser connected to the Internet, which is perfect when you’re travelling or justifying expenses at your accountant’s office.

Does it do it well?

Billing should be simple. FreshBooks is probably the most intuitive accounting software we’ve ever used. After creating your account, in a matter of seconds you can send an invoice no matter what level of experience you have—seriously, we timed it. It’s an uncomplicated service that removes all unnecessary steps.

Similar to any good business-focussed software application, FreshBooks lets you customise your experience by adding a business logo and changing the colour scheme to suit. This is great for those who intend to allow customers to access their billing information. You can, of course, change all your company details, set sales tax levels, and set staff permissions (limit those who have project access and the ability to send invoices and estimates).

There’s even an option that allows client to dispute invoices, though you’ll probably want to turn that off! Finally, you can select from a list of payment gateways if you’d like to receive money using the likes of PayPal, Google Checkout, 2Checkout and others.

The free version of FreshBooks lets you manage up to three clients. Another limitation is that your e-mail includes an ad for FreshBooks. Upgrading to a 25-client licence costs $19 per month, while the top-of-the-range account costs $149 per month and supports 5000 clients. Other paid-for perks include giving staff members access to your account.

Creating a client requires you to input the usual data, but you can upload a CSV file (easily created by Excel or any other spreadsheet) that contains your clients’ contact information. Further options let you import contact details from Outlook, Gmail, Yahoo! Mail, vCard (e.g. Mac OS X Address Book), QuickBooks (2004, 2005), and Simply Accounting.

FreshBooks comes into its own by streamlining the accounting processes. Recurring invoices eliminate the chore of regular invoicing, and automated late payment reminders are a real time saver. You can also generate invoices based on time, expenses, and fixed cost services/items—or any combination thereof. Our ultimate favourite feature is auto-billing, which automatically charges your client’s credit card. FreshBooks makes looking like a pro and impressing your clients easy—you can give your clients online access to their invoices and account history.

Invoices can be sent by e-mail using your mail client, ground mail, printed at home, or saved as a PDF. When your client gets their invoice in the mail they can access their own online account, with their account history, and, if you permit it, your clients can pay you online, as well as decide if they want to get future invoices by e-mail.

For a nominal fee you can get FreshBooks to post invoices straight to your clients. Each invoice is printed by FreshBooks with your logo and includes a return envelope for the client’s convenience. To use this service you need to buy stamps up front, which start at $1.79 for 1-99 stamps and drop in price to $0.99 for over 500 stamps. No more envelope licking!

Security is a massive issue, especially with financial data. Your FreshBooks account is backed up in real time to three sources in two different locations. For additional protection it is further backed up to tape at an off-site location nightly. All facilities are SAS 70 compliant. All data is transmitted using 256-bit SSL encryption and stored behind firewalls.

Where does FreshBooks disappoint?

FreshBooks isn’t a full accounting package. It does invoicing, accounts receivable, collections, and basic time tracking. In order to prepare financial statements and reports, such as profit and loss and balance sheet, you’ll have to use another package. Depending on your perspective, this is either a good or a bad thing.

From the positive standpoint it removes the sales and invoicing functionality from the accounting one, providing for more security and audit control. The opposing view holds that having to run an integration exercise between FreshBooks and a back-office accounting application is far from ideal. You be the judge on this one.

Our biggest criticism is that FreshBooks doesn’t allow for multiple currency invoicing within the one account. Users that need to invoice in multiple currencies need to set up separate accounts for each currency, which is a pain. FreshBooks has rudimentary time tracking functionality―not enough to run high level project management but plenty for contractors working for a few different clients at any one time―and it doesn’t do inventory. You can create your own products within FreshBooks and invoice those products, but you can’t use FreshBooks to track your inventory.

Would we recommend FreshBooks?

Invoicing is necessary and is not going away. It used to be done on paper and by post, but there’s no excuse in today’s modern business world not to do it by e-mail. FreshBooks delivers on all fronts. If you send out invoices from a small business, or even if you’re just sending out your own invoices as a part-time contractor or consultant, FreshBooks is an absolute joy. It’s brilliantly simple and gets the job done.

The best thing about FreshBooks is that it’s a highly focused online service, not a jack-of-all-trades that overwhelms the non-accountant. FreshBooks’ interface is tight and it’s impossible to get lost. The snail-mail invoice feature is a great add-on, too. FreshBooks isn’t suitable for larger companies used to the likes of SAP, NetSuite, or Sage, but the hosted service is certainly a quick and easy way to track time and invoice your customers.

The company goes heavy on customer support―any question or problems are readily answered on its forum or via its help support―and FreshBooks has fantastic API support. All parts of the application are open to integration with third-party products including Basecamp, Salesforce and MailChimp.

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