A Note From Monique
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Monique
Featured Article: Why Go With QuickBooks When There’s FreshBooks?
Two of my clients have asked me about FreshBooks. This is a great question, especially since they’re both in the startup stage of their business where they’re choosing which accounting system to go with.
So, here’s the short answer: FreshBooks is to QuickBooks like a tricycle is to Lance Armstrong’s racing bike.
And here’s the longer answer: It’s about having the right tool for the job. If all, and I mean all, you are doing in your business is selling your time, then FreshBooks is not a bad option. They’re tag line is “painless billing.” And, yes, it is indeed painless. I took it for a trial run, kicked the tires a bit, got on the phone and asked them a few questions.
Here are some of the salient differences between the two offerings:
QuickBooks offers nine different packages, (five online and four desktop versions) each one targeted to a specific phase in the business cycle. FreshBooks offers one package.
QuickBooks does everything that FreshBooks does…maybe not as user-friendly as FreshBooks, but it does it. The point is that FreshBooks does not do everything that QuickBooks does. FreshBook’s Evergreen plan, at $29.95/month is comparable to QuickBooks most basic plan, Online Simple Start, at $25.90/month. Their merchant solution plan is an addon, at $19.95/month. So FreshBooks is cheaper than QuickBooks for what it does. But here’s the deal:
- you can go with FreshBooks now and really have a “painless billing” experience but when your business takes off and it comes time to scale up, guess what…you have to get some software from a third-party vendor to convert the FreshBooks data to QuickBooks. And that takes time and expertise.
- or, you can go with QuickBooks from the get go and easily, effortlessly, and painlessly scale up to the more robust versions as you need to. It’s a classic case of “pay now, or pay later.”
So, in a nutshell, if you, the business owner, want to do it all yourself, plan to stay below the $300,000 per year revenue level, and are willing to accept a simple reporting structure, then I would recommend FreshBooks. But, if you are a startup with seven-figure plans for yourself and your business, and want detailed information to make the best forward-thinking decisions, then I recommend QuickBooks all the way.
If you have any questions or comments about this, please leave them in the “Leave a Comment” section below.
I just stumbled on your post as I was doing research for both – 1 vs. the other and I really liked how you broke it down. Makes more sense now. Thanks for the advice!
You’re welcome, Donna. Glad I could help. I’d be curious to know which one you eventually pick and why. Would you let me know if you have the time?
Thank you for this! I too was doing research and you did a great job breaking it down! I currently use QB and was trying to decide if I needed to change to an online system. I feel a lot of my time is going towards bookkeeping and was in search of an easier/less time consuming solution. Would you recommend any of the intuit online QB programs or should I just stay with what I currently have, which is the traditional QB?
Thanks again for posting this!
Thank you for the advice given here. I have been struggling with this decision quite some time…
Hi Tim,
Thanks for stopping by.
Things have changed in the FreshBooks world since I wrote this post back in February 2012. Just yesterday they asked for beta testers for Automated Bank Imports (what QuickBooks calls “downloaded transactions.”) And a couple of weeks ago FreshBooks announced that it now offers a Balance Sheet option, which means they’re moving from a simple billing solution into the bookkeeping realm.
I was intrigued by your comment that you’ve been struggling with this decision for a while. Both QB and FB offer 30-day free trials. My advice? Take them each out for a spin and see which one works best for you right now. And remember, what works for you today may not work for you a year from now. You’ll always be reevaluating the tools you’re using as your business changes and grows.
All the best! Monique
This is very helpful. As an attorney starting out on the solo path, I can see that Freshbooks may be helpful in the short term run, but QB has a lot of integration capabilities for future practice. I plan to test drive both and see what works.
Hey Daniel,
I’m so glad you found this helpful. You are so right about your future integration needs. Good luck to you in your path. Would you let me know what you discover after you test drive both?
Thanks!
Monique
I’m in a pickle. I have a 7 figure revenue business, two employees and have been using QB for Mac since I started my business 14 years ago. I’m on QB2014 and they are ceasing support for this product starting in May. I prefer a desktop solution because I’m on the road a lot and having to be online isn’t always practical. However, I’m open to online solutions. Here’s the thing… I’ve hated QB since the beginning. I want something simpler, easier to use and more customer friendly. Being forced to upgrade is not consumer friendly behavior and I don’t want to support those types of practices. My business has vendors, employees and clients that I manage through QB as well as business accounts, business credit cards and other accounts. I run P&Ls and other reports to keep an eye on my business, balance sheets for the accountant, etc. Now that I have until May 2017 to “upgrade” or lose functionality, I am now looking for a non-quickbooks option. I’ve seen Xero and now FB catches my eye due to simplicity. We are a small consulting business and I don’t anticipate growing it much more than it is right now. So… is FB completely out of the question for a business like mine? Do you recommend Xero over FB? I refuse to be sucked into QB’s model. They have really turned me off.
Hey JP, I’m a QuickBooks girl through and through. It’s what I know inside and out. You could call me up at 3am in the morning, wake me out of a dead sleep and ask me about QB and I’d most likely know the answer.
QBO is a better than it was, but I agree, it’s still a much less robust than the desktop versions. QB’s first product was the desktop version for the PC. That still remains the Cadillac.
Then Mac came along and Intuit did a version. In the beginning that was awful too. Much better now. Then they figured out they could make a lot more money with SAAS (software as a service) and rent you the software on a monthly basis.
I only know about Xero from a colleague of mine who uses it exclusively in her bookkeeping business. She’s done with QB too! She loves it. Don’t know much about FreshBooks these days. But generally I’d recommend going with software that offers the full general ledger and dual entry.
Hi JP,
A follow up to my previous reply to you.
I called FreshBooks today (your comment piqued my interest). FreshBooks is a single entry bookkeeping system, meaning that it only tracks income and expenses on your profit & loss statement. No balance sheet, so no things like Asset or Liability or Equity accounts. If you’re running a service business where all you’re selling is time, your’s or staff’s, then FB is an option.
If, however, you have any kind of inventory, no can do with FB. And no accrual basis possible, so no robust analytical possibilities to speak of.
And, FB allows you to import expenses in a .csv format only…no income (because it recognizes income only when invoiced from its system, not when directly deposited into the bank).
I’m in the same situation as you are. I use QB for Mac 2014 as well. I will be purchasing the software and upgrading because I prefer a desktop version.
Hope this helps in your decision making process. Let me know if you have any further thoughts or questions.