FreshBooks is a more robust solution if you’re looking for more than just basic financial tracking for your business. I previously blogged about how you can set up the free Mint.com to track your business’s finances (which Intuit featured on their blog). While Mint.com is a great tool for small businesses with straightforward cash flow, often you need additional functionality.

Mint.com is a “tracking-only” solution. It grabs your transactions from your bank accounts, credit cards, etc., and lets you categorize them. But that’s it. There’s no way to create and manage invoices, track expenses related to those invoices, or monitor invoice status with customers, etc

What FreshBooks Does

That’s where FreshBooks comes in. It’s a simple, easy to use, invoicing tool. It’s not free, but is well priced, and does a lot more than just typical invoicing. Here’s some of the things it’ll allow you to do:

• Expense Tracking: it allows you to import expenses from your bank statements, or add them manually, then link them to invoices, so you can make sure to bill your client for stuff tied to their project.
• Time Tracking: along with expense tracking, it helps you track your time into a project. That way you can bill your client accurately, at your hourly rate. Plus employees or subcontractors can track their time as well.
• Client Account Management: you add client profiles to FreshBooks, so you can easily send new invoices to them, as well as view data to determine what kind of a client they are.
• Online Payments: you can connect your PayPal, Stripe (our favorite), or one of several other merchant accounts to FreshBooks, so clients can pay the invoice instantly, online.
• Recurring Invoices: do you have clients you need to invoice for the same amount monthly, or yearly? FreshBooks makes it easy and automatic.
• Estimates: make an estimate now, then turn it into an invoice if the client accepts it.
• Reports: various reports can be generated for tax time, annual assessment, etc.
• Mailing Printed Invoices: FreshBooks even includes a certain number of
• 3rd-Party Integrations: in addition to various payment gateways, you can also integrate FreshBooks with other webapps such as Gmail, Basecamp, Zendesk, MailChimp, or our new favorite estimate creator: QuoteRoller.

What FreshBooks Doesn’t Do

At Fiddler Online we seem to be perpetually on the hunt for an awesome small business accounting solution. So we’ve tried a few (hope to blog about more soon). Here’s the deal with FreshBooks: it’s not a full accounting solution. I asked support about things like categorizing general business expenses and other things required for tax purposes, and here’s what Phil (a support agent) responded:

At FreshBooks we designed ourselves specifically around the very small business. So we’ve kept things as simple as we possibly can so that as you mentioned… you don’t have to have an accounting degree to use us.

Now that being said, because of that simplicity we’ve left out certain things – some of which may be needed by you. For example we do not do bank reconciliation. You can connect your bank account to FreshBooks, but we only import expenses.. not deposits to the account. So this saves you manually creating expenses, wether those are internal expenses or expenses
that you plan on re-billing to your clients.

Because we don’t do bank reconciliation, we don’t know what is actually deposited to your account or when. So it’s not possible for us to record what fees were taken off by your payment gateway (as they don’t send us that info). So you’d need to record the fee as an expense manually in FreshBooks.                     So that might be something that doesn’t work for you.

All the reports in FreshBooks will be based off of the invoices that have been marked as paid and the expense that have been entered. Those numbers will then be used for your reports and that can be exported and shared with your accountant.

So if you want a full-featured accounting solution, this is not it. However, if you rely heavily on invoicing, FreshBooks will make your life many times easier.

Who is FreshBooks Perfect For?

Small businesses and 1-man shows, where the majority of their income is through invoiced services. If you bill hourly for your services, or put together proposals for services-based projects, then this is for you. If you’re a larger company, or require full-accounting like bank reconciliation or expense categorization for tax purposes, you could still use FreshBooks, but you’d probably need to use it in conjunction with a full-fledged business accounting solution like QuickBooks online. Or possibly just with free Mint.com, as I outlined previously.

30-Day Free Trial of FreshBooks

UPDATE (3/23/15): Freshbooks reached out to me and let me know about a new web tool they’ve launched: FreeInvoiceCreator.com. It’s a simple webapp to create invoices. There’s no login required, you just put in the info in each step, then tell it where to email the completed invoice (PDF). However, it’s just a basic invoice. No online payment options or anything like that, such as what InspirePay (also free) offers.