Freshbooks is built for small businesses, with a great range of features and first-class invoice creation. Discover whether it’s right for you with our in-depth review
FreshBooks is built for SMEs and is rapidly winning over UK small businesses through a combination of low prices (including frequent deals and discounts), great design and powerful features.
FreshBooks stands out by doing some essential features incredibly well. Its invoice, estimate, and proposal creation tools are the best we’ve used, and it’s also remarkably slick when it comes to managing and creating expenses. It handles things like time and mobile mileage tracking with ease, and has a colourful UI that’s intuitive and clear.
There are some downsides too, though. All FreshBooks plans come with client limits, the support team works US business hours (1pm to 1am UK time), and its tax features are a bit basic compared to some of its rivals.
Overall though, as long as you can cope with these complications, FreshBooks is one of the best accounting software options for small businesses.
We'll cover all this in loads more detail in the review below but, if you’d rather dive straight in and try it for yourself, visit FreshBooks to choose your plan and sign up for a 30-day free trial.
Overview
- Bookkeeping4
- Advanced Features3.6
- Financial Reporting4.4
Like almost all accounting software in 2023, Freshbooks is cloud-based. This means you can access it anywhere you have an internet connection. On PC/Mac, it works through your web browser, while your phone/tablet gets a dedicated mobile app so you can create invoices and keep an eye on your finances on the go.
Freshbooks’ key features include:
- Quickly and easily create professional looking invoices, helping you get paid faster
- Keep track of business expenses, and log receipts by snapping them with your smartphone
- Track how much time you spend working on different projects, and invoice for those hours with one click
- Manage projects with a dedicated projects view, with different access levels for employees, contractors, and clients
- Create a range of financial reports that show you exactly how your business is doing
- Advanced accounting tools, including automated bank reconciliation and bill management
- Create MTD VAT reports, and submit them directly to HMRC
- Manage your business on the go with the Freshbooks mobile apps
- Take online payments through Stripe or Paypal (for an extra fee)
Visit Freshbooks today to find out more about these features.
Freshbooks Pros and Cons
✔️ Built for small businesses
✔️ First-class invoice, estimate, and proposal tools
✔️ Dedicated project tracking
❌ All plans have client limits
❌ Charge for additional users
❌ Phone support operates on US business hours
Pricing – How much does Freshbooks cost?
Freshbooks has three standard price plans.
All three come with a 30-day free trial, and prices are frequently discounted. At the time of writing for example, Freshbooks is offering 60% off all plans. You can also save money by paying annually instead of monthly.
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Plan Lite | Plan Plus | Plan Premium |
Cost | Cost | Cost |
Features
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Client limits
All three of these plans come with client limits, and the way these work is a bit complicated.
Freshbooks advises that these limits refer to “the number of both active and archived clients in your account”. However, “if you’re no longer billing or working with a client, you can delete them to free up spots for new clients”, and retain access to their invoices and information. You are also able to delete and undelete clients as you wish.
How much this impacts you will, of course, depend on how many clients your business has – but it’s definitely something you should carefully consider when choosing the right plan for your business.
Going over could mean you’re automatically charged for a more expensive plan, so you need to make sure you can stick within your limit.
User Experience (UX) – What is Freshbooks like to use?
Freshbooks is a bright, colourful take on accounting software, with all your options clearly laid out and most functions accessed via a blue side menu.
When you log in, you’re presented with inspirational business quotes – one example is “Your most unhappy customers are your greatest source of learning,” courtesy of Bill Gates – before being presented with the dashboard above.
Scrolling down this page shows the following:
- Outstanding revenue – outstanding revenue is in yellow, while revenue that is overdue is in red
- Total profit – This is shown as a line chart, with profit in green and loss in red
- Revenue streams – a donut chart shows where your revenue is coming from
- Spending – a donut chart shows how much you’re spending in different categories
- Unbilled time – a donut chart shows the unbilled time on different clients/projects
The green “create new” box in the top right corner opens a drop-down menu, which lets you quickly do things like create a new client, add an expense, or produce a new invoice (along with seven other common actions).
This works well, but is only marginally quicker than doing the same thing through the side menu.
When you do almost anything in Freshbooks, you’ll be greeted by a message congratulating you, often in a tone that seems infused with Californian tech company enthusiasm.
Whether you find this charming or irritating will of course be a matter of personal preference, but it’s fair to say it might get a bit grating on a bleak and grey February morning.
Generally though, Freshbooks is pleasant to use. Performing most tasks is intuitive, and the bright, colourful design means everything stands out nicely.
Freshbooks Key Features
Invoices
Here at startups.co.uk, we’re big fans of Freshbooks’ invoice creation tool. It’s really easy to use, and the finished invoices look great.
The screen shown above is the actual invoice creation screen, so there’s no fiddling about in separate menus, and you always feel like you’re working directly on the invoice.
Adding lines to the description of the work done is as simple as it gets (simply click and type), and Freshbooks speeds things up by remembering what you’ve entered into previous invoices.
You can add a client in a couple of clicks, and the subtotal and total are worked out automatically. Once you’ve registered your business with Stripe, then being able to accept online payments is also just a click away.
In terms of customisation, you have a choice of two templates – modern (as seen above), and simple. You can also easily change the highlight colour (selecting from a full colour wheel if you’re really picky), and choose between two fonts.
Adding visuals is also easy – the modern template lets you effortlessly add and edit images for the banner at the top, while the simple template lets you add your company logo in the top right corner. These options strike a nice balance between creative freedom and overwhelming complexity.
You can also use the same tools to easily produce professional looking estimates and proposals – just scroll to quotes in the right-hand menu.
Tracking invoices is nice and straightforward as well – selecting invoices in the right-hand menu takes you to this screen:
This lets you easily see how much is outstanding/overdue, while scrolling down reveals the status of each invoice you have created so far.
Better still, the statuses are colour coded to make everything 100% clear at a glance.
This comprehensive approach to invoice creation and tracking means that handling invoices is a doddle with Freshbooks.
Expenses
Handling your expenses in Freshbooks is pleasingly straightforward.
Selecting expenses in the right-hand menu takes you to the screen shown above. This clearly shows which expenses have been entered in different categories, and the value of those expenses.
To add a new expense, click “new expense”, either in the top right-hand corner or in the blank box under Recently Updated.
This brings up the following screen:
The left-hand part of the screen makes it easy to add a category, merchant (i.e. who you paid the money to), taxes, and a photo of the receipt.
The options on the right-hand side let you assign this expense to a client/project, make it recurring, change the currency, or associate it with the costs of goods sold.
Clicking any of these opens up further options (how often you want the expense to recur, for example) on the right-hand side, while the actual expense information stays visible on the left.
Connecting your bank account
The easiest way to import expenses is of course to connect your bank account, and this is a simple process in Freshbooks. You can simply search for and select your bank, before being taken to their website to log in, and then being sent back to Freshbooks when the process is complete.
Once you’ve done this, expenses will be imported into Freshbooks daily, saving you the hassle of entering them manually.
If you’re on the Plus or Premium plan, then you’ll also get bank reconciliation.
(The video is for the US version, but does a good job of explaining how the process works.)
So, bank reconciliation is basically a really good way of making sure your records are correct. Every time money comes in or goes out of your account, it should match an entry in Freshbooks.
To speed this up, Freshbooks tries to match most of the entries itself. You can then approve these suggestions, before tackling any entries that don’t have a suggested match.
It’s an easy way of making sure that your records match the money actually coming in and going out of your business.
Finally, you can also add expenses via the Freshbooks mobile apps. This is easy to do, and you can add a photo of the receipt with your smartphone camera, although Freshbooks doesn’t include the receipt scanning technology offered by some of its rivals.
Time tracking
While relatively simple, Freshbooks’ time tracking tool is a real boon for any service-based small businesses.
It’s found through the right-hand menu. Simply click on time tracking, and you’ll get the screen above.
Then, follow these three simple steps:
- Click “start timer” to get things going, and use the pop-up menu to assign the time being tracked to a client or project.
- If you need to correct anything, either click and type in the pop-up or, after you’ve finished, click the entry and make the necessary changes.
- Here’s the clever bit – because the time tracked is properly assigned, invoicing for that time is simply a matter of clicking “generate invoice” in the top left corner and entering the rate that should be charged.
You can then send that to the client with another click.
It’s a straightforward setup that makes it easy to manage multiple projects/clients, and ensure that every hour worked is properly accounted for – all without ever having to leave Freshbooks.
Reports
One great feature of accounting software is how easily you can create reports that show you what’s going on with your business.
To find these in Freshbooks, return to that trusty right hand menu, scroll to the bottom, and click reports.
You’ll then be offered a wide array of reports, including detailed breakdowns of your invoices and expenses, various payment summaries, accounting reports that show cashflow and profit/loss, and reports that break down your time tracking data and illustrate the profitability of different projects.
Given how colourful and user friendly Freshbooks is generally, the actual reports are a tiny bit disappointing. Yes, they do the job and give you the required information clearly, but they have very little visual impact, and some come with default accounting jargon like accounts receivable (money owed to your business).
MTD VAT returns
This reports section is also where you need to go to submit your MTD VAT return (if your business is VAT registered).
Simply click VAT return under accounting reports, and a pop-up screen will then invite you to download the necessary data as a CSV Excel file.
You can then head to the Freshbooks MTD portal to file your return. This portal also allows you to review past submissions/payments, and see outstanding liabilities (i.e. money you owe to the government).
Again, this does the job, but it doesn’t feel particularly user-friendly. It also lacks the energy that characterises the rest of Freshbooks.
Overall, reporting in Freshbooks is useful, but the rather bland functionality makes it feel like a box that has been ticked rather than a feature that has been carefully designed to really help small businesses (many of whom will lack the accounting knowledge to make sense of these reports).
Manage your accounts on the go
As you’d expect from any decent accounting software in 2023, Freshbooks offers a range of mobile and tablet apps so you can run your business on the go.
Once you’ve downloaded and logged in, you’ll first be greeted by the dashboard. This shows your outstanding revenue, total profit, and total spending, and is essentially a mini version of the main Freshbooks dashboard.
You navigate through the app using the bottom menu. There are dedicated sections for invoices, expenses, and time tracking, while “more” offers you the choice of mobile mileage tracking, estimates, and clients.
The app makes it easy to add expenses and create invoices – although it’s worth noting that invoices are rather basic compared to the ones you can create on your computer.
The most exciting part of the mobile app is mobile mileage tracking.
This lets you track the miles you’ve travelled using your phone’s GPS, and then easily sort which journeys were personal and which were business (i.e., which can be dedicated as a business expense come tax time).
Like the app as a whole, it’s slick and easy to use, and could make a huge difference to anyone whose business involves a lot of travel.
Online payments
Freshbooks offers a choice of two online payment services – Stripe and Paypal.
As you can see from the breakdown above, Stripe is cheaper, but you might find PayPal more convenient – so it’s nice to have the choice.
To show you how much each would cost, we’re going to break down the fees for a £100 transaction.
Stripe
For Stripe, the fee charged is 1.4% for each transaction plus 20p.
So, for a £100 transaction, you’d pay:
£1.40 (1.4% of £100)
PLUS
20p
So, £1.60 in total.
PayPal
For PayPal, the fee charged is 2.9% plus $0.30.
So, for a £100 transaction, you’d pay:
£2.90 (2.9% of £100)
PLUS
$0.30 (approximately 22p)
So, £3.12 in total.
In other words, the PayPal fee is basically double the Stripe fee, so unless you’ve got a very good reason to go with PayPal, we’d recommend going with Stripe.
Freshbooks Add-Ons
While Freshbooks standard pricing was discussed at the start of this guide, there are two optional extra fees that are worth looking at in more detail – additional users and advanced payments.
Additional users
Whichever plan you’re on, adding additional users to Freshbooks costs £7 per person per month. If you do want multiple logins, make sure you bear this in mind when deciding if Freshbooks is the right fit for your business.
Advanced payments
If your business uses a lot of remote payments, then you might want to consider adding advanced payments to your Freshbooks plan.
This costs an extra £15 per month, and gives you the ability to save the card details of customers and charge them regularly. You'll also be able to take card payments over the phone, offer subscription-based billing, and benefit from a virtual terminal.
Freshbooks Support – What help is available if I get stuck?
Freshbooks offers support in four ways: via its online help centre, through webinars, by email, and on the phone.
The help centre is essentially a big online instruction manual – it's full of detailed guides that explain how to do almost anything on Freshbooks.
While these guides do the job, they won’t be suitable for everyone – they’re mostly just text and images.
If you need something more dynamic, then Freshbooks runs regular webinars, and these are archived on the Freshbooks Webinars YouTube channel.
Sometimes though, you need help from a real person, and Freshbooks offers both email and phone support.
You can either send messages to a dedicated help email address, or ring a freephone help number.
One thing you really need to be aware of, though, is that Freshbooks support operates on North American business hours – that's 8am to 8pm Eastern Time. In the UK, this translates to 1pm to 1am GMT. Depending on the hours you work and how much help you need, this could be a significant factor in your choice of accounting software.
Freshbooks Verdict
Freshbooks is a strong contender when it comes to the best accounting software for your small business.
Its invoice, estimate, and proposal creation tools are among the best we’ve come across, the UI is colourful and intuitive, while extra features like time tracking and mobile mileage have been designed with care, making them a pleasure to use. Generally, this can also be said for the whole experience of using Freshbooks – it does everything you want it to, and it’s easy to work out how to use it without having to delve into online guides.
However, it's important to bear client limits in mind, with a five client limit on the £11 a month basic plan. The reports could be easier to understand and have more visual impact, and the support team working on US hours (1pm to 1am UK time) may require adjustments in how some users work.
We think this is a great accounting software for small business. If you're interested in finding out more, visit Freshbooks today.
