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Freshbooks - 28%

28th Nov 2012
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Freshbooks - Online Invoicing System, wrongly named as Cloud Accounting for some reason is a nice invoicing system for freelancers and startups who need no more than then just an awesome invoicing app, yet we hardly believe that Accountants may love the system due to lack of double-entry, adjusting capabilities, etc. It lacks most of core accounting functionalities and its great user inteface is not inline with basic concepts of accounting and imposes unproportional high learning curve for such simple functionalities.

Since Freshbooks claims to be an accounting solution, we will regard it so in this review.

Getting Started

Signing up and getting started in Freshbooks is intuitive, and provides overall guidelines on its dashboard.

Creating a customer and adding contacts is straightforward. Optionally you may opt to import contacts from your listing, however it is very inflexible to use their importing feature. First of all, Freshbooks offers only Outlook and Freshbooks Compatible format (no idea what compatible format is). CSV format has been a standard, and not being able to bulk upload a custom CSV file is cumbersome or as we called it - WRONG and we could not bulk upload customers. CSV templates that we tried to import were from existing accounting software.

Invoicing

Invoicing, as it  is meant for, is great. However, if clients do not have any email, you are not invoicing them. Freshbooks basically states invoice transactions must go through email. It is a matter of personal taste, however leaving email as transaction trigger is a bit lame.

Custom email template is not really a custom. If you exclude logo from an invoice, there is no more customization left.   You are either choosing a Classic Layout or a Clean Layout invoice.

Expenses

Adding customer was an easy task. Now you might be interested in adding a supplier or vendor. Two words most widely accepted naming is disregarded in Freshbooks. Look for "Contractor" instead. However, you cannot add a supplier without any email. For a person willing to track bills from suppliers, email may not always be an option. Most likely, Freshbooks is superimposing their strategy of inviting your suppliers into the system over your need to track basic bills. Sad... Freshbooks looked ok for simple finance, but imposing a lot of restrictions for just recording purposes.

Registering expenses looks simple, yet inflexible for accounting systems and totally weird for us.

  • You cannot add multiple expense items. Thus each check you write or expense you incurred you will register separately.
  • No idea how to track expenses paid and from what bank account

Bills tracking is another disappointment.  You can register bills or how they call it "Received Invoices" only by inviting your suppliers into the system.  If your suppliers are not in Freshbooks, use spreadsheet or track separately if you are much into using this app.

User Management

Freshbooks offers a basic user management, that is, you can add your sales people who can invoice and register expenses as well as contractors, who can see invoices issued to them. As for custom user role management, there is none. Which means you cannot create a custom user group, assign custom roles and permissions to users you invite into the system. Even though Freshbooks offers some user management it is not providing proper segregation of duties that an accounting software should be providing.

Freshbooks is not an accounting software, yet, as I mentioned, we are regarding it as an accounting software judging by their bold statement on their home page.

Inventory Management

Freshbooks does not have it at all. In fact you should not be expecting any balance sheet report from this "Cloud Accounting" application as you cannot track inventory value on hand. (Accounting 101, basic financial statements  are P&L, Balance Sheet, Cash Flow, Retained Earnings).

All it allows is quantity management, that is, how many left.

Document Management

As we followed Freshbooks for new features, we were delighted to hear that as of recently you can upload documents in the system. As it turned out, you can attach files, specifically receipts into your expenses and only. However, in most cases, businesses if sending invoice via email would usually attach files, contracts, etc... Much ado, about so little.

Conclusion

Freshbooks is a nice invoicing application, and it not a double entry accounting suite. Thus, if you run a small business Overall user experience with Freshbooks from accountants and non-accountants perspectives state that designers' vision superimposes basic accounting concepts, and does not provide expected logical workflow. Freshbooks, however, tries to compensate it be offering in-application guide per screen, but for simple functionalities it provides, things could have been  much easier.

To understand why Freshbooks, as an "accounting" download comparison table

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Replies (4)

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By Gary Mirsky
30th Nov 2012 20:23

FreshBooks is all small service-based professionals need

Hi Matthew, You say that accountants wouldn't love FreshBooks because it isn't double entry - that's correct - it isn't designed for accountants.  FreshBooks is designed for small service-based professionals who want to run their business effortlessly, get paid fast, track their expenses and then engage with their accountant on higher value work.

It seems like you took a good look at the product, and noticed how easy it is to get going and start running your business. However, I wanted to clarify a couple of points, as they are inaccurate.  You mentioned that "FreshBooks basically states that invoice transactions must go through email".  That's not the case; user can print an invoice and mail it, and FreshBooks even offers a "snail mail" service where we will mail the invoice for the user. Also, in your comparison table you indicate that FreshBooks doesn't do invoice reminders - when it in fact it has the ability to send 3 customizable reminders per invoice, and offers the ability for users to charge late payment fees to their customers.

If readers have questions on this or other points, we're around to answer calls and emails or they can use our extensive FAQ section.

FreshBooks isn't for all businesses - as you showed when discussing inventory needs - but after 9 years of receiving great customer feedback, we do know that FreshBooks is right solution for small service based professionals of 1 to 10 people.

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By Mathew
04th Dec 2012 12:03

Hi Gary,

Usual process with invoices, etc is to save it so that they reflect in Balance Sheet (A/R) and P&L (Sales & COGS/Expense).

Now, what i did, is I saved an invoice as draft, since I did not want to snail mail nor email. Just registering. As I assumed from your comments, saving an invoice as a draft triggers a transaction. But when I did so, P&L is 0. I would expect it so, since it is a draft. If I understood you incorrectly, then there is a huge problem with your reports.

What the review imparts, is there is no way to register an income without e/mailing.

We are an IT company, and looking for an accounting solution, and sharing our findings. So no offenses

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By Gary Mirsky
21st Dec 2012 19:09

Hi Matthew,

No offense taken.  Just want to try and clarify things.

A draft invoice would not show up on the P&L etc.  That's because its not a completed transaction, just allows someone to start working on an invoice to get it ready.  When they decide to send it, it becomes a transaction.  If you just want to print it and hand it to someone, all you would have to do is mark it as sent, and it shows up in the P&L.

Thanks for looking into FreshBooks.

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Replying to ireallyshouldknowthisbut:
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By computerminds
11th May 2015 20:17

Hey Gary,

I know this is an old thread - but we have actually just started using over at https://www.computerminds.co.uk and ran into the same issue as the earlier post - I think the problem being when editing / creating the invoice there is no option to 'Mark as send' - only 'Save as draft' and the snail mail / email buttons.  The solution seems to be to use the invoice listing screen to select the invoice and then mark it as sent ... thought this might help someone out :)

I'm going to pester the FreshBooks support folk to see if it would be possible to get the 'Mark as sent' or even better 'Print and mark as sent' button added into that edit screen - would save me a couple of clicks a month :)

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