August 29, 2019

QuickBooks vs. FreshBooks: Which Accounting Tool Is Right For Your Needs?

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Tags: HR

Quick summary:

  • Many people think QuickBooks and FreshBooks are built for the same purpose, but this is a common misconception.
  • QuickBooks works best for companies that sell products and require a scalable, fully-fledged accounting software.
  • FreshBooks works best for service-based businesses and for freelancers and solopreneurs that need a way to track expenses and revenue for simple reports.

While the names suggest these products perform the same functions, you should compare the features of QuickBooks vs. FreshBooks before you switch to either. These two options contain a lot of the same features, but they don’t exactly work the same way.

For instance, FreshBooks tracks invoicing for small businesses and freelancers, whereas QuickBooks provides actual accounting software used by businesses of all sizes.

Also read: 5 QuickBooks Alternatives for SMB Accounting

But that doesn’t mean these systems are mutually exclusive, either. QuickBooks offers features FreshBooks doesn’t and vice versa, but these solutions still overlap in significant areas. Comparing QuickBooks vs. FreshBooks will help you decide what’s best for your business’ needs.

If you’re ready to find the right accounting software for your small business, click the image below or contact us. Our Technology Advisors will listen to your needs and match you with a list of five vendors who meet your requirements. If you’re still doing research, read on for a comparison of QuickBooks vs. FreshBooks.

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Let’s take a closer look at each.

Timekeeping

QuickBooks vs. FreshBooks: FreshBooks Time Tracking

FreshBooks offers built-in time tracking capabilities that are helpful for project- and case-based businesses where employees track billable hours alongside other project expenses. The dashboard and project views of these hours help you keep your entire project and individual employees on the right task at the right time. Depending on the size of your team, you’ll likely import this data into your accounting system once compiled.

QuickBooks offers an additional add-on feature that tracks payroll for full or part-time employees. Otherwise, you’ll have to enter payroll as an expense, and bill it by categorizing the employee’s service as a product. It’s not the most efficient way to track employee time, so you’ll likely need to look into other payroll or time clock software to go along with this.

Invoicing

QuickBooks vs. FreshBooks: FreshBooks Invoice Generator

FreshBooks also includes customizable invoice design and a click-to-pay button for online invoices. The invoices pull data directly from the timekeeping feature, as long as you mark your hours as “billable.” Automations include recurring invoices and automatic invoicing of billable hours, as well as follow-up emails for overdue payments.

QuickBooks connects to some outside time tracking apps like Google Calendar or TSheets to track billable hours and include these on your invoices. The invoice builder in QuickBooks contains a lot of customization features so you have control over the design of your invoices before you send them to clients. Include a click-to-pay button on your invoice to let your clients pay directly from the invoice, and set reminders and recurring payments directly from the platform.

Inventory tracking

QuickBooks’ inventory features tie in with its accounting software, which means you can enter payments made to suppliers, inventory on hand, and making future orders based on inventory output. These features support small-to-medium retail and manufacturing outfits with complicated accounting procedures. FreshBooks doesn’t include any inventory features.

Expense tracking

QuickBooks supports both debits and credits, keeping your apprised of profit margins at every step. This may take some more manual entry on your (or your accountant’s) part, because QuickBooks is designed to show line-items rather than some of the more nuanced breakdowns.

FreshBooks mostly focuses on invoicing and payment collection, so you may have to purchase or connect to another accounting system anyway. That said, it does offer special expense features like receipt tracking, project time tracking, and sales tax management.

Accounting

QuickBooks vs. FreshBooks: QuickBooks dashboard

QuickBooks makes keeping track of your accounting easy. Features like double-entry accounting keep your sheets balanced and help organize cash flow, but these features don’t come easy to all. A common criticism for QuickBooks is that its abundance of features makes the software difficult to learn. A healthy amount of accounting or bookkeeping knowledge will help users navigate the software.

Once you figure the system out, balancing both sides of your sheet will take much less time than doing it by hand. Your accountant likely uses QuickBooks too, so you can share data directly with them.

FreshBooks doesn’t provide accounting in the form of fully automated balance sheets and the like, but if you want to put in some work, you can enter your own data to fill out balance sheets. This can be time-consuming, depending on how many clients and projects you run at a given time.

Integrations

QuickBooks boasts over 400 native integrations with payment software, your bank, CRMs, e-commerce, and many other software categories to ensure maximum visibility and control over your financial data and sales processes. Some other helpful tools like ReceiptBank and PayPal keep your transactions updated with necessary details.

FreshBooks includes many integrations as well, but these target freelancers and small businesses. Connect your app to human resources and tax filing tools for small businesses to round out the payroll-tax-invoicing circle. Track payments from your Moodle course with an integration, or connect your FreshBooks to Zapier to process and organize actions in tons of other systems.

Reporting

QuickBooks vs. FreshBooks: Quickbooks Reports

QuickBooks includes a variety of reports with their product, and the majority of these follow what you’d need for accounting purposes. Each group of reports includes sub-reports that drill down to the details you or your accountant needs for proper analysis:

  • accounts payable
  • accounts receivable
  • products and inventory
  • expenses and purchases
  • sales tax reporting
  • employee reports (basic time and product or service reports)

While this list is impressive, you’ll find that many of these reports only work with manual-entry and tagging. You’ll need to keep detailed records to fully access each of these.

FreshBooks reporting centers on profit margin, and their central dashboard shows your periodic input versus output. Because FreshBooks works best as an invoicing and time tracking tool, the reports focus on payment collection and a couple of tax-related reports. The software has filters to help you build more granular reports, and some of the reports are time-based to help you stay on top of your payments due.

Still weighing your options? We can help!

If you’re still not sold on QuickBooks or FreshBooks, visit our accounting software page to explore more accounting solutions. Or if you’re short on time, fill out the form on the accounting software page to receive a free, no-hassle shortlist of the best accounting solutions for your business. Getting started is easy and takes less than five minutes.

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