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QuickBooks vs. FreshBooks: Which is better?
Intuit’s QuickBooks Online and FreshBooks are two comparable accounting software solutions to help automate and consolidate your financials in one place. Both platforms focus heavily on features for small businesses with limited accounting knowledge.
However, where QuickBooks offers more robust reporting and add-on features for growing businesses, FreshBooks is better for freelancers looking to build lasting relationships with their clients.
| QuickBooks | FreshBooks | |
|---|---|---|
| Pricing | Starting at $15 per month for three months with promo and 30-day free trial. | Starting at $8.50 per month for three months with promo and 30-day free trial. |
| Accounts receivable | Inventory and integrated online sales channel management. | Client account access for invoices and estimates. |
| Business expenses | Contractor and accounts payable plus available employee payroll add-on feature. | Must integrate with Gusto for contractor and employee payroll. |
| Timekeeping | Must purchase Essentials tier for timekeeping features. | Native project timekeeping. |
| Banking and accounting | Focus on budgeting and cash flow predictions. | Focus on basic expense tracking for simple account transactions. |
| Try QuickBooks | Try FreshBooks |
QuickBooks: Best for small businesses selling products
QuickBooks Online is a popular small business accounting platform with essential client invoicing, bill management, and bank reconciliation features. As one of the leading self-accounting platforms out there, it includes additional add-ons for more customization, including:
- QuickBooks Payroll: One of our top payroll software solutions, it helps you automate payroll in all 50 states.
- QuickBooks Time: Includes more advanced timekeeping for a deskless workforce, such as geofencing.
- QuickBooks Payments: Required product if you want to accept online customer payments.
- QuickBooks Checking: Offers a QuickBooks checking account and combines with QuickBooks Payments for Instant Deposit.
- QuickBooks Live: Virtual bookkeeping services with QuickBooks ProAdvisors to help diagnose and maintain your financial accounts.
Despite QuickBooks’ focus on small businesses in general, many of its native features are geared toward retail companies. For example, with QuickBooks Plus, you can track your product inventory and connect all of your online sales channels, such as eBay, Amazon, or Shopify.
With automatic inventory adjustments, as you sell your products online or invoice your products, you can ensure your stock remains up-to-date. It also removes the hassle of double data entry in an external inventory management system or spreadsheet. This gives you more time to focus on selling quality products instead of tracking them.
Pros
Cons
Check out 4 QuickBooks Alternatives for SMB Accounting for other comparable small business accounting solutions.
FreshBooks: Best for freelancers or solopreneurs selling services
FreshBooks is a more bare-bones accounting platform for teams with little to no accounting experience than QuickBooks. As a result, you will find that FreshBooks lacks some of the more advanced accounting features of QuickBooks, including predictive analytics like profitability and cash flow forecasting.
Nevertheless, because FreshBooks does not have some of these more in-depth features, it is a much more accessible tool for new business owners, freelancers, or solopreneurs. In addition, if your business depends on accurate timekeeping to bill for services, FreshBooks includes a native time-tracking tool. This allows you to avoid using third-party alternatives or tracking billable hours manually.
Pros
Cons
Check out FreshBooks in our video overview below:
QuickBooks vs. FreshBooks: A detailed comparison
| QuickBooks | FreshBooks | |
|---|---|---|
| Starting price | $30/mo. | $17/mo. |
| Free trial | 30 days | 30 days |
| Invoicing | Yes | Yes |
| Estimates | Yes | Yes |
| Bill management | Essentials trier and up | Premium trier and up |
| Expense tracking | Yes | Yes |
| Bank reconciliation | Yes | Plus tier and up |
| Timekeeping | Essentials tier and up | Yes |
| Client tools | No | Yes |
| Mobile app | Yes | Yes |
| Payroll | Add-on | Add-on with Gusto |
| Bookkeeping services | Add-on | Add-on with Bench |
Pricing
QuickBooks and FreshBooks follow similar pricing structures, with a monthly subscription rate plus four pricing tiers. Each pricing tier offers more features than the previous one, such as more advanced reporting or automated workflows. Both offer a 30-day free trial and a promotional discount for new businesses for the first three months.
QuickBooks Simple Start, the lowest price tier, offers more starting features than FreshBooks’s comparable Lite tier. However, this means that QuickBooks is a much more expensive solution than FreshBooks, so it may not be the best choice if you’re new to accounting or lack the funds for something more robust.
Accounts receivable
As cloud-based solutions, both QuickBooks and FreshBooks focus on payment collection through electronic methods, such as ACH transfers or online credit card payments. However, QuickBooks’ accounts receivable (A/R) features are geared more toward small businesses selling products. In contrast, FreshBooks’ A/R features are more suited for self-employed individuals billing for services.
QuickBooks includes customizable invoicing on all its price tiers, such as adding your logo or changing the color of your invoices to match your brand. Syncing with your QuickBooks Payments account also allows customers to pay online from their invoices via ACH, debit or credit card, PayPal, Apple Pay, and Venmo.
However, if your company primarily sells products to customers or if you run a brick-and-mortar business, QuickBooks A/R features can help. For instance, you can take onsite payments with its GoPayment app and card reader to collect payments immediately without invoicing later. Combining this with your online sales channels consolidates your payments and reduces your manual accounting work.
In addition, QuickBooks includes a native inventory management feature in its Plus price tier and up. You can enter, track, or reorder inventory from suppliers when it is low. QuickBooks automatically adjusts your inventory according to your invoices or online orders, making it easy to stay on track with your supplies. In turn, QuickBooks tracks purchase orders to keep on top of expenses.
Check out QuickBooks inventory management features below:
If you’re looking for more advanced inventory management features, learn about other solutions in How to Choose the Best Inventory Management Software.
Unlike QuickBooks, FreshBooks focuses on A/R features to strengthen relationships with your primary customers. For example, FreshBooks offers a client portal for customers to conveniently track, save, comment, and view invoices, proposals, or estimates. QuickBooks, however, does not include this feature, so clients must look through their emails if they miss one of your invoices.
FreshBooks also allows you to send invoices in 16 languages and multiple currencies. Through integrations with Stripe and PayPal, you can easily accept global payments. As a result, you can offer your services to a broader international market.
Like QuickBooks, FreshBooks accepts payments through ACH, credit or debit cards, and Apple Pay, with optional services through Stripe and PayPal. However, you will need a separate Square account to use an onsite card reader.
QuickBooks. Here’s why: QuickBooks has more advanced A/R features that accommodate a variety of businesses.
Although FreshBooks includes more client-friendly payment features than QuickBooks, inventory management and in-person payments require third-party integrations. Working out of several tools can be a hassle for your small business, especially when your business’s health depends on them.
Business expenses
Both QuickBooks and FreshBooks include expense tracking in all of their plans so that you can bill clients accordingly and monitor cash flow. However, QuickBooks accounts payable (A/P) software features come standard in its Simple Start plan. In contrast, FreshBooks users must buy a higher-tiered plan or integrate with third-party solutions for similar capabilities.
QuickBooks helps you manage expenses in one place, including accounts payable and contractor payments. With QuickBooks Essentials plan and up, you can add new bills from vendors or utility companies, attach the invoices, and pay directly from the platform with QuickBooks Online Bill Pay.
As you add and pay necessary bills, you can note what expense account you use to track the particular cost, and QuickBooks will automatically add the bill details to that account. Similarly, you can upload a receipt from QuickBooks Online’s mobile app, add it to your expenses, and match it to appropriate transactions during bank reconciliation.
Also read: All Your Accounting Needs at Your Fingertips: Mobile Accounting Apps.
If you employ contractors, the QuickBooks Simple Start plan offers essential contractor support, including payments and preparing 1099 forms. This makes it a more affordable and convenient option than FreshBooks since you do not have to purchase a separate plan and integrate with Gusto.
Learn how QuickBooks allows you to add and pay bills:
FreshBooks does not offer A/P features until its Premium tier. However, you will pay $55 per month for the FreshBooks Premium tier, which is the same price as QuickBooks Essentials.
Like QuickBooks, you can add bills, pay online, and sync transactions to appropriate expense accounts. However, FreshBooks does not allow you to manage or pay bills on its mobile app; you can only upload expense receipts. This can be very inconvenient if you are frequently on the go as you must pay your bills from a desktop computer.
Moreover, FreshBooks does not offer native payroll services. You must pay for a Gusto account and integrate it with your FreshBooks account to track your payroll expenses automatically. Despite being less expensive than QuickBooks Simple Start with Payroll Core, FreshBooks Lite with Gusto Simple is still a costly option if you only hire contractors and need 1099 forms.
QuickBooks. Here’s why: QuickBooks requires fewer third-party integrations to augment its business expense features than FreshBooks.
In particular, FreshBooks lacks contractor payment support, which can make it difficult come tax time when preparing and sending out 1099 forms. Even with the QuickBooks Simple Start plan, you can access contractor, expense, and accounts payable features, which are necessary if you work with many contractors, vendors, and suppliers.
Timekeeping
Although both QuickBooks and FreshBooks include time-tracking features, their approaches are quite different. While QuickBooks offers basic time logging on its Essentials plan and up, FreshBooks incorporates time-tracking elements on all of its plans.
QuickBooks only offers basic time-tracking functionality if you purchase its Essentials plan. Even then, time tracking is limited to manual time entry, where you or your contractor must enter their hours before adding them to your invoices.
For more advanced time-tracking features, especially if you have employees, you will need to purchase QuickBooks Time, starting at an additional $20 per month plus $8 per user per month.
However, the add-on gives you more advanced features, including automated alerts, notifications, and job and shift scheduling. If you have a distributed team, you can get notified if someone forgets to clock in, preventing any missed billable hours for invoices.
Check out how to enter basic time in QuickBooks below:
For more advanced time tracking, check out our Time Clock Software Guide for a complete list.
Compared to QuickBooks, FreshBooks offers time tracking on all of its plans. Users can manually enter their time or leverage FreshBooks timer or Chrome extensions to clock in and out on projects. Afterward, you can add any time marked billable to your invoices.
FreshBooks even allows you and your teams to collaborate and bill for any time spent on joint projects. After creating a new project, you invite team members to the project and assign their bill rates. When adding time, team members can then select which project to bill. This ensures you and your team get paid according to their different contributions to the project.
FreshBooks. Here’s why: FreshBooks offers native timekeeping features in every plan, which is valuable if your business’s income is project- or case-based.
For similar functionality in QuickBooks, you will need to purchase QuickBooks Time. Even then, you may be overpaying for more advanced features you don’t need — especially if you do not hire or pay employees.
Banking and accounting
QuickBooks Simple Start plan includes the three main accounting reports:
- Income statement (profit and loss report).
- Double-entry accounting (balance sheet).
- Cash flow statement.
These features help measure the strength of your business and plan for future growth.
With FreshBooks, on the other hand, you must purchase its higher plans for banking and accounting functionality on par with QuickBooks.
QuickBooks allows you to manually reconcile your bank transactions with your expenses to keep your books up-to-date. Alternatively, you can connect your bank accounts to QuickBooks to automatically match transactions, saving you time on data entering and increasing your chance of finding errors before they become serious.
One of the most valuable features that QuickBooks offers, but FreshBooks does not, is cash flow forecasting. QuickBooks uses historical data to predict your money in and out of your accounts for up to 90 days. You can even add future events, like planned expenses or revenue, and QuickBooks will automatically adjust its prediction.
Cash flow forecasting is a great way to visualize the impact of different expenses and revenue scenarios on your business. Adding this to other tools, like QuickBooks Plus’ budgeting tools and profitability reports, gives you a better understanding of how well you maintain business operations. If you plan to grow your business, these features can make it easy to plan your strategy.
Concerned about your cash flow predictions? Check out how Invoice Factoring Can Ease Your Cash Flow and Streamline Accounting.
FreshBooks banking and accounting features are best for beginners. While this is not necessarily a bad thing, it does mean that it is more concerned with monitoring payment collections than tracking your business’s overall financial health.
FreshBooks demonstrates this by not offering bank reconciliation or balance sheets unless you purchase its Plus tier. Even then, you must connect your bank account to use these features effectively; you cannot customize or manually add your bank or credit card transactions if you worry about syncing your banking information with third-party apps.
However, if you don’t plan to scale your business, FreshBook’s simple profit and loss, sales, and expense reports may be all you need. Moreover, the barrier to entry is much lower with FreshBooks, so if you opt for the plans with bank reconciliation and balance sheets, these tools are easier to navigate. Alternatively, you can invite your dedicated accountant or bookkeeper to view and organize your accounts.
QuickBooks. Here’s why: QuickBooks comes standard with the banking and accounting tools you need to monitor your cash flow and plan strategically for upcoming cash infusions or expenses. Despite user reviews stating there is a learning curve for these tools, QuickBooks does at least offer them.
Meanwhile, FreshBooks does not offer some of the advanced accounting tools of QuickBooks, like cash flow predictions. This makes it a more difficult tool if you plan to expand and need the accounting tools to accommodate.
QuickBooks vs. FreshBooks: Ready to choose?
QuickBooks Online and FreshBooks offer accounting tools for different types of businesses. The best one for you comes down to whether your company sells products or services and whether you expect to grow.
Choose QuickBooks if you are a small business selling products and need scalable solutions to help track your finances as you grow. However, if you’re new to accounting, a solopreneur, or an independent contractor, choose FreshBooks for its simple-to-navigate interface and native timekeeping features for accurate client billing.
However, if you’re still unsure whether QuickBooks or FreshBooks is right for you, explore our Accounting Software Guide for other solutions.
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