FreshBooks Vs. QuickBooks

FreshBooks: A Fresh LookIf you are in the accounting profession like me, then you have probably heard of FreshBooks. You think of invoicing and you think of FreshBooks. For someone with a simple, service-based business that does not have many expenses, this has proven to be a great solution. For an accountant like me, however, FreshBooks doesn’t solve all of my problems; maybe this is about to change.

In a recent newsletter, Mike McDerment put out a statement that has me wanting to take another look at FreshBooks for a number of reasons. First, what has always held me back from FreshBooks is that, as an accountant, I want a complete accounting solution. If I use FreshBooks for my invoicing, then I need another program to track my expenses and this makes it difficult to see my complete financial picture. In the end, I need to be able to look at a profit and loss statement as well as a balance sheet. The profit and loss statement includes both income (from my invoices) and expenses from checks I write, bills I pay, and credit card charges I make. So I have kept going back to QuickBooks for the simple reason that I can have it all there. Clients have asked me about “simplicity,” and my response has been something like “just don’t use all of the features QuickBooks offers and it can be as simple as you want it.”

So here are the reasons I am taking another look at FreshBooks now:

  • We (in the accounting industry) are screaming for better cloud accounting solutions.
  • Mike McDerment promises in his newsletter that, while he is keeping FreshBooks simple for the business owner and free of accounting jargon, the company will be bridging the gap between the FreshBooks user/small business owner and the accountant who needs more “complex” tools.
  • Mike also promises an account overview that has had a 99.3% adoption rate among existing users. This is a step closer to “accounting,” as he puts it. I am interested in seeing what this is about.
  • There is also a profit and loss statement, which means (I hope) a better emphasis on expense tracking.

The direction in which Mike says he’s going is to stay focused on service-based businesses and not to try and be all things to all businesses. I respect this, however, as someone who is both accountant and small business owner, I need the entire picture tracked in one place. This means income and expenses. I have to believe this can be accomplished without overly complicating things for the sake of the small business owner. In fact, the first two questions that most small business owners in my experience want answered are the following:

  • How much money did I make?
  • How much money do I have in the bank?

What I don’t see here is any mention of a balance sheet, and this concerns me. If there is no balance sheet, I cannot answer the second question. Many service-based businesses will invariably need to borrow money eventually if not right away. This requires a balance sheet for tracking loan balances. The balance sheet is also where your bank account lives. Every business needs to be able to track where the money goes after it is collected from customers and put in the bank. Maybe FreshBooks has another approach to tracking the bank account without offering a balance sheet? See what I found out in my screencast on Taking A Look At Freshbooks.

Article Written by

I help you succeed by taking the complex and making it simple!

I am training the nation's bookkeepers and small business owners in QuickBooks, MS Excel, Accounting, Cash Flow Management, and other productivity based software and technology.

  • http://bkgcom.blogspot.in/ Bharat Kumar Gupta

    I ve heard about freshbooks through lockergnome, i have an account there but since i m not accountant i have not used the service lately, i liked the interface and in my country itself i came across few people who actually use it for business, which is great, again a winning web tool, lets see what comes with regards to updates.

  • Curtis Coburn

    You can learn a lot on Lockergnome. I’m not in accounting, or business owning, but if I ever do get into that, I know Lockergnome, and Gnomes would be the first place I turn to for help.

  • http://twitter.com/creation4use Samuel Guillermo

    Haven’t tried either or so I don’t believe I can really asses this situation.

  • http://www.facebook.com/Wwallender Dakota Wallender

    I havent used Freshbooks, not Quickbooks. i would hope that both these services would use an online backup (automatically) due to the fact when i have to recover data from them is always “I need my Quickbooks”

    • http://www.nerdenterprises.com Seth David

      Freshbooks is cloud based so it is backed up. There is no file for the end user to deal with and the same of course is true for QuickBooks Online. Desktop versions of QuickBooks make it very easy to create backups and now there are so many cloud based file storage solutions like Drop Box and ShareFile that it just makes sense to keep those backups in the cloud.

  • Liam Jackson

    Have no need to use these, but it is good for people to chose, and for competition.

  • kefir

    thanks

  • http://www.facebook.com/Michael.Basil.Albayya Michael Albayya

    i haven’t used any of them but this article has made me want to check them out

  • http://twitter.com/RadSel8 Ahmed A

    And how is this useful to a consumer (not enterprise)?

    • http://www.nerdenterprises.com Seth David

      Not sure it is meant to be useful to a consumer unless you are a consumer who owns a business and needs to invoice customers?

  • Mariette Knoblauch

    FreshBooks is great for invoicing and time tracking, but it’s not a full accounting solution. QuickBooks isn’t the only other choice though. Xero has full balance sheet and journal entry capability, and I believe Saasu, Working Point, Kashoo and Zoho do as well. Xero is the only one I’ve worked with extensively, and the balance sheet and journal entry are just as good as QB online, and in my opinion better. Xero is lacking in inventory, but there’s an inventory add-on (Unleashed) that gives that capability.

    • http://www.nerdenterprises.com Seth David

      Xero is definitely gaining some ground in the online or cloud accounting space but most accountants still favor QuickBooks online over Xero. This may eventually change.

      If you are interested I am hosting Stacy Kildal from QuickBooks Online and Ian Vacin from Xero. We are going to put Xero head to head against QuickBooks Online. Follow me on Twitter for details (@nerdenterprises)

  • Neill Young

    Do either of these help normal people?

    • http://www.nerdenterprises.com Seth David

      Nope! Only abnormal people!

  • http://www.facebook.com/qwilleran.lake Qwilleran Lake

    Although I have no use for these I may need to use them in the future, or perhaps someone I know might have use to these. If I had to chose one I would start out with FreshBooks, but who knows. Maybe that will change. I think I will come back to this at a latter date. See what has changed by then.

  • Jesse Aranda

    I’m actually a bit surprised there isn’t a popular accounting software that is open source. Perhaps there isn’t a huge pool to bring a movement to it – like the amount of office suite users created Open Office and Libre Office. Or maybe I’m just running on an open source kick right now and think there needs to be more. Or is there something I’m not seeing?

    • http://www.nerdenterprises.com Seth David

      QuickBooks has an SDK. I think accounting software by design is a little more complex. You essentially have several layers of multi-relational data tables that all have to connect with each other without conflict, duplication and at the same time with proper segregation. Every transaction has 2 sides (debit and credit) and either or both sides of each transaction can be split and may need to be associated with one or more customers and/or vendors (two different names lists) while populating the right accounts which then need to be categorized and accumulated in the right place (Asset, Liability, Equity, Revenue, Expense) and within each of those account categories you have all different types. So it just isn’t as easy to develop as an office app.

      • Jesse Aranda

        Ah! I knew there was more to it than that! thank you for explaining it.

    • Mariette Knoblauch

      I think PostBooks by xTuple is open source. It runs on Linux anyway. The description is “Free open source ERP, accounting, CRM package for small to midsized
      businesses. Runs on Linux, Mac, and Windows (built with open source Qt
      framework). Business logic resides in PostgreSQL database. Rich API for
      connecting to third-party apps.” I hope that conveys more meaning to you than it did to me ;) I have tried it and it is serviceable full double entry accounting, but I think the learning curve may be a bit steeper than something like Xero.

    • Mariette Knoblauch

      I think PostBooks by xTuple is open source. It runs on Linux anyway. The description is “Free open source ERP, accounting, CRM package for small to midsized
      businesses. Runs on Linux, Mac, and Windows (built with open source Qt
      framework). Business logic resides in PostgreSQL database. Rich API for
      connecting to third-party apps.” I hope that conveys more meaning to you than it did to me ;) I have tried it and it is serviceable full double entry accounting, but I think the learning curve may be a bit steeper than something like Xero.

  • http://ironiclee.blogspot.com/ Jentylee

    With all of the pluses for accountants and the small business own let alone lone user, I think FreshBooks is going to see higher profits in its future. I am looking into them, myself.

  • http://twitter.com/armanzokaei Arman

    I don’t know anything about accounting, but I know someone that I’ve talked to that preferred QuickBooks over any other program or service. If I ever need to use one it would also be QuickBooks, but I’d also try FreshBooks to see which one I like better.

  • Joshie305

    I think many people could use watever they want to as long as if it fit and suceess in YOUR needs

  • http://www.facebook.com/ROBERTO1811 Roberto Van Gilder

    It’s the first time that i see these programs, but they look quite interesting, so I will use them.

  • Mohamed Hisham Hadjazi

    sometimes it is annoying when you can’t import spreadsheets with certain
    layout to your program. that’s why chris’s father still uses excel. If you want something easy you should try xero.

  • http://www.facebook.com/tom.sharples.18 Tom Sharples

    IM ONLY YOUNG SO I DONT REALLY NEED YO THINK ABOUT ACCOUNTING AFTER SEEING THIS IT’S A SERVICE WHICH I PROBABLY WILL USE IN THE FUTURE

  • https://plus.google.com/112301869379652563135/posts Ryan Matthew Pierson

    FreshBooks is my lifeblood as an independent contractor. It handles my invoicing and even sends reminders when a client “forgets” to pay me.

  • http://jp-pc-tech.blogspot.com/ Pascal Fiedler

    My first tought was: QuickBooks would be a Book-On-Demand store.But this is still great. But there’s no balance sheet? Is there money, or not? :O

  • louis percival

    Something I’ve never looked into but I understood a lot from this well written article comparing the difference between the 2.

  • http://www.facebook.com/profile.php?id=606163198 Christopher Micallef

    I like books. #$15amaawesome

  • http://www.facebook.com/KarenMagno Karen Magno

    Thanks for this great information. We have been contacted by some accountants that want to import data from FreshBooks to QuickBooks so I think that there are some accountants out there that are letting their clients use what they want but they then need to use QuickBooks to do the actual full blown accounting.