FreshBooks Review: Is It the Right Accounting Software for You?

FreshBooks is a great basic accounting software tool for sole traders and new small businesses, such as startups.

It was one of the easiest-to-use accounting platforms that we tested and has excellent customer support options, making it a great choice for those new to accounting. Plus, it provides enough invoicing, expense, and VAT management tools to support the needs of individuals or very small businesses.

However, it is missing the kind of advanced reporting and financial forecasting tools that more established, growing businesses rely on to effectively plan for the future, so it’s not a very scalable option.

In this review, we’ll go over our experience with FreshBooks, assess its accounting features and pricing, and help you decide if it’s the right option for your business.

FreshBooks Review: Summary

Here’s a quick summary of our thoughts on FreshBooks:

Who is FreshBooks best for?

FreshBooks is best for those new to accounting software, such as newly registered freelancers or startups. The platform is very user-friendly and comes with readily available help and support, earning it a spot in our ranking of the best accounting apps for the self-employed.

Its invoicing and expense management tools are particularly well-suited to service-based businesses, including project-based freelancers and tradespeople, thanks to features like billable hours and mileage tracking.

We don’t recommend FreshBooks to established businesses looking to grow or ones that sell physical products, since FreshBooks is missing the budgeting, forecasting, and inventory management tools to support these types of businesses.

Our experience using FreshBooks

FreshBooks was one of the easiest-to-use accounting platforms we tested, coming in second place behind Zoho Books in the usability category.

Several factors contributed to making FreshBooks easy to use. The first is that the menu on the main dashboard was generally well organised, with key features highlighted by clear terms. This meant that we didn’t have to do much digging to find the tools we needed.

FreshBooks’ invoicing and quote tools were also very intuitive to use. This was mainly because there wasn’t an overwhelming number of fields to fill in, which was the case with competitor Xero. Additionally, settings, such as currency or automatic payment reminders, could be set up directly from the invoice we were working on, saving us from having to go to a separate settings page. This was something we had to do with competitor QuickBooks.

The one task we struggled with in FreshBooks was messaging clients. There’s no clear way to send clients tailored messages through the FreshBooks system that isn’t just resending them an existing quote or invoice. The FreshBooks system also doesn’t generate sales receipts, which made confirming a payment with a client tricky, since we had to resend an updated invoice.

FreshBooks: Key Features

FreshBooks offers good basic accounting tools, such as invoice and expense management, and time tracking. However, its reporting and budgeting tools are a little limited, and might not suit growing businesses.

Invoices and quotes

FreshBooks’ strong suite is its invoicing and quoting tools. Quotes can easily be turned into invoices at the click of a button and it’s easy to keep track of invoice statuses in the dashboard, such as whether it’s been paid or viewed by the client. Other tools that make managing invoices easier include the ability to set up recurring invoices and quotes, and automate payment reminders.

FreshBooks also facilitates invoice payments by integrating with multiple bank accounts and allowing invoices to be paid by bank transfer (BACS) or via a payment link through a payment processor (Stripe).

The only feature FreshBooks is missing is that it doesn’t support multi-currency invoicing, unlike competitors Zoho Books or QuickBooks. However, this won’t be an issue for most in the demographic that FreshBooks is tailored for as these will be small UK businesses or sole traders who only operate domestically.

Expense management

FreshBooks offers decent tools for expense management.

Users can track and log an unlimited number of expenses from the cheapest plan, the £15 per month Lite plan, and expenses can be logged manually via receipt data capture or bank feed integrations. Additionally, all expenses can be assigned to employees or clients.

Uploading expenses from receipts can be done easily on a smartphone through the FreshBooks mobile app since it only requires a picture of the receipt. That said, we did notice some discrepancies in how expenses are categorised when using the receipt data capture method. For example, a petrol receipt was categorised as “Supplies” instead of “Mileage”.

Another way to track expenses on FreshBooks is via bank feed integration. This method saves the most time. However, you still have to manually categorise expenses after the fact, since FreshBooks doesn’t offer automatic categorisation for bank feed transactions.

Some of FreshBooks’ competitors, such as Xero and QuickBooks, offer automatic categorisation for expenses uploaded via bank transfer and receipts, and we noticed a higher degree of accuracy when testing these platforms.

Time tracking and project management

FreshBooks offers an easy-to-use time-tracking tool that allows you to track time spent on work, assign work to a specific project, and generate billable invoices based on time spent working.

This is a valuable tool for freelancers or project-based contractors since it makes charging clients and remaining transparent easy. We also liked that this tool is available on all FreshBooks plans and not as a paid add-on, as it is with competitors QuickBooks.

That said, we’d advise that you create a project to assign work to before you launch the timer since we had a lot of trouble creating a new project retroactively and accidentally deleted our time stamp in the process.

Mobile app

Like many modern accounting software platforms, FreshBooks offers a mobile app version of its software, which is particularly useful for businesses that do a lot of work on the go.

The app’s highlights include a tool that can track mileage as you drive, automatic data capture from receipt pictures for easy expense categorisation, and client messaging. Users can also create and send quotes and receipts directly from the app. These features make FreshBooks’ mobile app particularly well-suited to tradespeople who travel to complete jobs for clients.

However, FreshBooks’ mobile app isn’t a replacement for the desktop version of the software, since it can’t be used to view reports or send payments. Most competitor apps share similar limitations, although Zoho Books’ mobile app allows users almost the same amount of flexibility as its desktop software.

Tax preparation

FreshBooks offers reliable tools for calculating tax and submitting returns.

From the £15 per month Lite plan, FreshBooks’ cheapest pricing option, users can apply VAT to goods and services with the rate automatically calculated, access VAT return forms, and easily submit returns to HMRC, since FreshBooks is compliant with the MTD (Making Tax Digital) scheme.

The above is standard for most accounting software platforms and we don’t recommend choosing a platform that doesn’t offer these features.

However, FreshBooks doesn’t support all forms of tax. For example, FreshBooks doesn’t support CIS (Construction Industry Scheme) tax calculations and submissions, which means it’s unsuitable for construction industry businesses. Competitors that do support CIS include QuickBooks, Xero, and Zoho Books.

Reporting and analysis

FreshBooks’ array of reporting and analysis tools is a little weak compared to competitors, but it should be enough to meet the needs of sole traders or very small businesses.

The platform comes with a variety of useful prebuilt reports, including profit and loss and invoice and expense reports, as well as key financial statements such as income statements, cash flow statements, and balance sheets.

FreshBooks also has a few inventory management tools, such as stock level tracking and fixed asset tracking. However, it can’t automatically calculate and update asset values, accounting for depreciation or amortisation over time (whether the value of assets has gone up or down). This means it’s not the best software for businesses that primarily sell products and need to plan their finances around them.

In fact, FreshBooks is mainly missing tools to help with financial planning. Unlike competitors Zoho Books and QuickBooks, FreshBooks doesn’t offer any type of cash flow projection tool or budget setter.

Tools for accountants

All FreshBooks plans, besides the £15 per month Lite plan, allow businesses to invite their accountant to collaborate. The software supports accounting teams of up to 10 users.

Tools that accounts will find useful include double-entry accounting, a customisable chart of accounts, journal entries, and general ledger reporting.

FreshBooks: Pricing

FreshBooks’ pricing ranges from £15 to £35 per month, plus custom pricing for its top-tier Select plan.

Is FreshBooks expensive?

FreshBooks is generally quite affordable, with an average price of £22.50 per month, less than most competitors.

At £15 per month, FreshBooks’ starting plan isn’t the cheapest since competitors Zoho Books and QuickBooks have plans that start at £10 per month. However, FreshBooks’ maximum price of £35 per month (not counting its custom plan) is very low compared to most competitors, whose top-tier plans usually cost over £50 per month. For example, QuickBooks’ most expensive plan costs £115 per month.

Does FreshBooks have a free plan or discounts?

FreshBooks does not have a free plan, but it does offer a 30-day free trial, leaving you plenty of time to decide if the platform is for you.

Users can also get a 10% discount if they opt to pay for the year upfront instead of month to month. It’s something we recommend taking advantage of, if you have enough saved up and are sure you want to stick with FreshBooks for at least a year, since it’s one of the few ways to save money with this choice of accounting software.

FreshBooks: Help and Support Options

FreshBooks offers great help and support resources, which is part of why we recommend it to those new to accounting.

FreshBooks has a phone line, a support email, and an agent-operated live chat. As a bonus, the support team operates from 1pm to 12am, seven days a week, so they can be contacted outside of the typical nine-to-five hours.

When it comes to self-help resources, FreshBooks offers an AI chatbot and has a relatively well-stocked knowledge centre with up-to-date articles. The one channel FreshBooks doesn’t offer is a user forum, which can be useful for filling in gaps in the self-help guides.

All in all, FreshBooks has a wider net of resources than most competitors. A lot of competitors, such as Zoho Books and ClearBooks don’t offer live support on the weekend, while others, such as QuickBooks and Xero, don’t have a dedicated phone line.

FreshBooks: Alternatives

If you’ve decided FreshBooks isn’t the right accounting software for you, here are some alternatives to consider:

• Zoho Books: If you like how easy FreshBooks is to use, but wish it had better inventory management and reporting tools, then Zoho Books is a great choice. It marries user-friendliness with powerful accounting features.
• QuickBooks: If you’re looking for an accounting platform with an emphasis on reporting and financial planning tools, we recommend QuickBooks. It’s not quite as easy to use as FreshBooks, but it makes up for this with excellent reporting tools that you can access from the cheapest plan.
• Xero: If you’re an established business that needs detailed tools for tracking and recording invoices, expenses, and clients, Xero is your best bet. It’s not the easiest platform to use, but it’s well known among accountants, which makes working with one easier.
• Sage: Sage is a good option for businesses that want to maintain a strong brand image since it allows users to create highly customisable invoices. It also has a payroll and HR ecosystem that integrates seamlessly with its accounting software.
• FreeAgent: FreeAgent is one of the most affordable accounting software platforms on the market, and is free for businesses with a bank account at select banks. Besides being affordable, it’s also got powerful reporting and financial planning tools and is relatively simple to use, making it a great value choice.
• ClearBooks: If you need an accounting tool that can support a wide variety of different tax types, and offers a lot of guidance come tax time, we recommend Clear Books.

For a more detailed comparison, check out our Xero vs FreshBooks and QuickBooks vs FreshBooks reviews.

Methodology: How We Reviewed FreshBooks