FreshBooks – Invoicing & Accounting for Small Business

What is FreshBooks?

FreshBooks is a cloud-based accounting and invoicing platform designed specifically for self-employed professionals, freelancers, and small service-based businesses who need to get paid faster while spending less time on bookkeeping. Founded in 2003 in Toronto, Canada by Mike McDerment after accidentally saving over an important invoice with an Excel spreadsheet, FreshBooks has grown from a simple invoicing tool into a comprehensive small business accounting solution serving over 30 million users across 160+ countries. The platform has become the go-to choice for creative professionals, consultants, and independent contractors who prioritize beautiful invoicing and exceptional ease of use.

What distinguishes FreshBooks from traditional accounting software is its laser focus on time-strapped service providers who bill clients for their work. While many accounting platforms try to serve all business types, FreshBooks is deliberately built around the workflows of freelancers and agencies: tracking time, creating professional invoices, following up on payments, and capturing expenses. This focused approach results in an exceptionally intuitive interface that makes financial tasks feel effortless rather than overwhelming, allowing users to manage their business finances without accounting expertise.

FreshBooks has evolved significantly from its invoicing origins to include double-entry accounting, expense management, project profitability tracking, and team collaboration features. The platform integrates with hundreds of popular business applications and offers a robust mobile experience that lets users run their business finances from anywhere. With features like automatic payment reminders, online payment acceptance, and late payment fees, FreshBooks helps small businesses maintain healthy cash flow while presenting a polished, professional image to their clients.

Key Features

• Professional Invoicing: Create polished, customizable invoices with your branding, add line items, taxes, and discounts, then send directly to clients with online payment options included.
• Time Tracking: Built-in timers and manual time entry let you track billable hours by project or client, then convert tracked time directly into invoice line items.
• Automatic Payment Reminders: Schedule automatic email reminders for unpaid invoices, reducing the awkwardness of chasing payments and improving collection rates without manual effort.
• Online Payments: Accept credit cards, bank transfers, and PayPal directly through invoices, with payments deposited to your account in as few as two business days.
• Expense Tracking: Capture receipts with your phone, connect bank accounts for automatic imports, and organize expenses by category or client for tax preparation.
• Project Management: Organize work by project, track time and expenses against project budgets, and monitor profitability to understand which clients and projects are most valuable.
• Proposals and Estimates: Create professional proposals and estimates that clients can approve online, then convert approved estimates directly into invoices.
• Client Portal: Give clients secure access to view invoices, make payments, approve estimates, and communicate through a branded client portal.
• Financial Reports: Generate profit and loss, expense reports, invoice summaries, and tax summaries with easy export options for accountants and tax preparation.
• Team Features: Add team members with appropriate permissions, track their time, manage their expenses, and collaborate on client projects efficiently.

What’s New

FreshBooks has introduced substantial updates throughout 2024, enhancing automation capabilities and expanding functionality for growing businesses.

• Advanced Automations: New workflow automation features trigger actions based on invoice events, payment receipts, and time entries, reducing manual follow-up tasks.
• Enhanced Mobile Apps: Redesigned mobile applications provide nearly full feature parity with web experience, including complete invoicing and reporting capabilities.
• Improved Bank Connections: More reliable and faster bank feed connections with expanded coverage of financial institutions and credit card providers.
• AI-Powered Categorization: Machine learning suggests expense categories based on transaction descriptions, learning from your corrections to improve accuracy over time.
• Client Relationship Insights: New dashboards show client lifetime value, payment behavior patterns, and project history to inform client relationship decisions.
• Expanded Integrations: New connections with project management, CRM, and e-commerce platforms streamline data flow between FreshBooks and other business tools.
• Subscription Billing: Improved recurring invoice features support subscription-based business models with automatic billing and client management.
• Custom Fields: Add custom fields to invoices, expenses, and clients for tracking business-specific information beyond standard FreshBooks fields.

System Requirements

Web Browser

• Modern web browser: Chrome, Firefox, Safari, or Edge (latest versions)
• JavaScript enabled
• Stable internet connection
• Display resolution: 1024 x 768 or higher recommended

iOS App

• Operating System: iOS 14.0 or later
• Compatible with iPhone, iPad, and iPod touch
• Storage: 150 MB available space
• Camera for receipt capture

Android App

• Operating System: Android 8.0 or later
• Storage: 100 MB available space
• Google Play Services required
• Camera for receipt capture

How to Install FreshBooks

Web Setup

1. Visit freshbooks.com and click “Try It Free”
2. Enter your email address to begin registration
3. Create a secure password for your account
4. Provide basic business information
5. Customize your invoice appearance with logo and colors
6. Add your first client or import from contacts
7. Connect your bank account for expense tracking
8. Create your first invoice to experience the workflow

iOS Installation

1. Open the App Store on your iPhone or iPad
2. Search for “FreshBooks” in the search bar
3. Tap “Get” next to the FreshBooks app
4. Authenticate with Face ID, Touch ID, or password
5. Open the app after download completes
6. Sign in with your FreshBooks credentials
7. Enable camera permissions for receipt capture
8. Enable notifications for payment alerts

Android Installation

1. Open the Google Play Store
2. Search for “FreshBooks Invoice & Accounting”
3. Tap “Install” to download the app
4. Open FreshBooks once installation finishes
5. Log in with your existing account
6. Grant camera permissions when prompted
7. Allow notifications for invoice updates

# FreshBooks API Integration (for developers)
# Using OAuth 2.0 authentication

# Install FreshBooks Python SDK
pip install freshbooks

# Initialize FreshBooks client
from freshbooks import FreshBooksClient

client = FreshBooksClient(
    client_id='YOUR_CLIENT_ID',
    client_secret='YOUR_CLIENT_SECRET',
    redirect_uri='YOUR_REDIRECT_URI'
)

# Get authorization URL
auth_url = client.get_auth_request_url(scopes=['user:profile:read', 'user:invoices:read'])

# After authorization, set access token
client.set_access_token('YOUR_ACCESS_TOKEN')

# Create an invoice
invoice_data = {
    'customerid': 12345,
    'create_date': '2024-01-15',
    'lines': [{
        'name': 'Consulting Services',
        'amount': {'amount': '1000', 'code': 'USD'},
        'qty': 1
    }]
}

invoice = client.invoices.create(account_id='YOUR_ACCOUNT_ID', data=invoice_data)

Pros and Cons

Pros

• Exceptionally User-Friendly: The most intuitive interface among accounting platforms, making financial management accessible to users with zero accounting background.
• Beautiful Invoices: Professional, customizable invoice templates help small businesses present a polished image that encourages faster client payments.
• Excellent Time Tracking: Built-in timers and seamless conversion of tracked time to invoices perfectly serves professionals billing by the hour.
• Strong Payment Collection: Automatic reminders, online payment acceptance, and late fees help maintain healthy cash flow without uncomfortable collection calls.
• Mobile Excellence: Full-featured mobile apps make it genuinely possible to run business finances entirely from a smartphone when needed.
• Outstanding Support: Award-winning customer support with helpful, knowledgeable representatives available through multiple channels including phone.
• Client Experience: Client portal and branded communications create professional impressions that elevate small business credibility.

Cons

• Client/Invoice Limits: Lower tier plans restrict the number of billable clients, potentially forcing upgrades before features warrant it.
• Limited Inventory: Not designed for product-based businesses; inventory management is essentially non-existent compared to full accounting platforms.
• Basic Reporting: Financial reports are adequate but less comprehensive and customizable than competitors like QuickBooks or Xero.
• Per-User Pricing: Adding team members significantly increases monthly costs, unlike platforms offering unlimited users.
• Limited Advanced Features: Businesses outgrowing FreshBooks may find it lacks advanced accounting features needed for complex operations.

FreshBooks vs Alternatives

Who Should Use FreshBooks?

FreshBooks is ideal for:

• Freelancers and Consultants: Independent professionals billing clients for time-based work find FreshBooks time tracking and invoicing workflow perfectly matched to their needs.
• Creative Professionals: Designers, photographers, writers, and other creatives appreciate beautiful invoices and proposals that match their professional image.
• Small Service Agencies: Marketing agencies, development studios, and consulting firms with small teams benefit from project tracking and team time management.
• Accounting-Averse Owners: Business owners who dread financial tasks find FreshBooks approachable interface makes necessary bookkeeping actually manageable.
• Mobile-First Users: Professionals who work from various locations value FreshBooks excellent mobile apps that enable full functionality away from desktops.
• Client-Focused Businesses: Companies prioritizing client experience benefit from branded portals, professional communications, and easy online payments.

FreshBooks may not be ideal for:

• Product-Based Businesses: Companies selling physical products need inventory management that FreshBooks simply doesn’t provide in meaningful capacity.
• Large Teams: Per-user pricing makes FreshBooks expensive for larger teams compared to unlimited-user alternatives like Xero.
• Complex Accounting Needs: Businesses requiring advanced accounting features, detailed reporting, or complex multi-entity structures will outgrow FreshBooks quickly.
• High-Volume Invoicers: Companies sending hundreds of invoices monthly may find client limits restrictive and per-invoice costs add up.

Frequently Asked Questions

How much does FreshBooks cost?

FreshBooks offers tiered pricing based primarily on the number of billable clients: Lite ($19/month) supports 5 billable clients, Plus ($33/month) supports 50 clients, Premium ($60/month) supports 500 clients, and Select (custom pricing) offers unlimited clients with additional features. All plans include unlimited invoices, expense tracking, and time tracking. Additional team members cost $11/month each. FreshBooks frequently offers promotional discounts of 50-70% off for new subscribers during their first several months.

Can FreshBooks handle double-entry accounting?

Yes, FreshBooks supports double-entry accounting with a chart of accounts, journal entries, and standard financial reports including profit and loss and balance sheet. While earlier versions of FreshBooks used simplified accounting, the current platform has evolved into a genuine accounting system suitable for growing businesses and their accountants. Users can invite their accountants with specific access permissions to review books, make adjustments, and export data for tax preparation.

How do clients pay invoices sent through FreshBooks?

FreshBooks offers multiple payment options for clients receiving invoices. Clients can pay by credit card (Visa, Mastercard, American Express, Discover), ACH bank transfer, or PayPal directly through a “Pay Now” button on the invoice. You can enable or disable specific payment methods per invoice. FreshBooks Payments processing fees are competitive with industry standards, typically 2.9% plus $0.30 for card payments. Funds typically deposit within 2-3 business days after payment.

Does FreshBooks work with my accountant at tax time?

Yes, FreshBooks provides tools specifically designed for accountant collaboration. You can invite your accountant to access your FreshBooks account with appropriate permissions to view financial data, make journal entries, and generate reports. FreshBooks exports data in formats compatible with professional accounting software. The Reports section generates tax-ready summaries of income, expenses, and other financial data. Many accountants are familiar with FreshBooks and can efficiently work with the data you provide.

Can I track project profitability in FreshBooks?

Yes, FreshBooks includes project management features that let you track profitability by project. You can create projects, assign time entries and expenses to specific projects, set project budgets, and generate reports showing how much you’ve earned versus spent on each project. This visibility helps identify which clients and project types are most profitable for your business. The project dashboard provides at-a-glance status of active projects including total time, expenses, and unbilled amounts.

Final Verdict

FreshBooks has carved out a distinct and valuable position in the small business accounting market by focusing relentlessly on the needs of freelancers and service-based businesses. Rather than trying to be everything to everyone, FreshBooks excels at the specific workflows its target users perform daily: tracking time, sending professional invoices, following up on payments, and capturing expenses. This focused approach results in an exceptionally polished experience that makes financial management genuinely pleasant rather than dreaded.

The platform’s strengths shine brightest for independent professionals and small agencies who bill clients for their time and expertise. The combination of built-in time tracking, beautiful invoicing, automatic payment reminders, and online payment acceptance creates a cohesive workflow that gets users paid faster with less effort. The outstanding mobile apps mean business finances can be managed from anywhere, and the client portal elevates small business professionalism in client interactions.

FreshBooks is not the right choice for every business. Companies selling physical products, those with large teams, or businesses with complex accounting requirements will find better solutions elsewhere. But for its intended audience—freelancers, consultants, creative professionals, and small service agencies—FreshBooks delivers an unmatched experience. If you spend your days doing work you love but dread the financial administration that follows, FreshBooks transforms that chore into something approaching enjoyable, getting you paid while letting you focus on the work that matters.