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Accounting, budgeting, and financial technology for businesses

FreshBooks vs. QuickBooks Online

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Naming conventions are a real pain. We call the thing a peanut, but it’s neither a pea nor a nut. FreshBooks, with its stylized name, is actually only very loosely like QuickBooks, with its stylized name.

FreshBooks vs QuickBooks

Because Intuit’s flagship product is the also the industry flagship, there are now lots of financial software solutions with the term “Books” in them. I mean, it also just makes sense from an accounting perspective, but I think the QuickBooks name is the bigger factor.

The problem with FreshBooks is that it’s not really a QuickBooks competitor.

There are a huge number of features that the two share, for sure. FreshBooks, though, isn’t really accounting software – it’s billing software with some cool extra features. Let’s skip right to it.

Comparing QuickBooks Online to FreshBooks

I don’t usually do this, but I’m going to appeal to Wikipedia for a second. Wikipedia defines accounting software as software that “records and processes accounting transactions within functional modules such as accounts payable, accounts receivable, general ledger, payroll, and trial balance.”

QuickBooks Online is a great example. In QuickBooks, you can create invoices, track income, see what bills you have outstanding, track expenses, run payroll, and reconcile your tracked account with your bank. It is clearly accounting software. Your accountant will tell you as much, I promise.

FreshBooks, on the other hand, lacks a few key pieces to count as a truly robust accounting software. Now, before we get into this, I don’t want you to take this as a condemnation of FreshBooks. I think it’s a very good product for people with small, simple businesses. If you’re self-employed, for instance, and run a business that revolves around billable hours, FreshBooks might be perfect.

But talk to your accountant or to someone you trust who has some accounting experience.

What FreshBooks does well

FreshBooks is focused on solving a very particular problem. Freelancers and small, service-based businesses have a hard time getting paid. study that Xero ran on its users found that 60 percent of invoices are paid late, with a third of those late payments coming two weeks after the deadline.

FreshBooks tries to solve that problem by making invoicing and getting paid as simple as possible.

You can send unlimited invoices to your clients, track the status of those invoices, and even accept payments. Then, FreshBooks drops in a whole set of customer management features, making it easier to chase down the money you’re owed without spending a lifetime doing it.

While you won’t be able to track inventory – which is very important for some small business, so take note – you will be able to bill expenses. FreshBooks has excellent billing features that can help you track time, mileage, and expenses, to make sure you get paid for everything you did, not everything you happen to remember.

Finally, you can run a solid series of reports in FreshBooks to give you insight into how things are going. Standards, like a profit and loss report, sti next to more specialized invoicing and expense reporting tools.

What QuickBooks Online does well

QuickBooks Online is, largely, just a reimagined QuickBooks. All of the typical features are included in the online version, with some workflow changes, some additional features, and a small set of missing bits.

I mentioned inventory before in FreshBooks, so i’ll do it here as well. If you want to manage inventory in QuickBooks, you’ll need to get QuickBooks Online Plus, which is the most expensive version of the software.

Charlie Russell has an excellent series on inventory management, and you can check out his piece on QuickBooks as an introduction to the idea.

Beyond that, QuickBooks is exactly what you would expect in a robust accounting system. You get reconcilable entries, bank reconciliation, income and expense tracking, invoicing, and estimate generation.

As you move up the three levels of QuickBooks, you’ll also get access to recurring billing, bill payments to your vendors, purchase order management, billable hour tracking, and budgeting.

As always, you also get a hook into the QuickBooks’ app store, which gives you the ability to integrate with companies like TSheets, Bill.com, and Fundbox.

Making the choice between QuickBooks Online and FreshBooks

To get some of the cool tracking features that FreshBooks includes at its base, you’re going to end up spending $30 or $40 per month with QuickBooks. I’m talking about recurring billing and deeper expense tracking, for instance.

With FreshBooks, you get those features at its basic $15 per month level. Actually, FreshBooks charges you based on your client base, not on a feature set. That means the $15 version is functionally equivalent to the $50 per month version, but for five clients instead of for 500.

If your business is complex in any meaningful way or if you have fixed assets to worry about or if you love integrations or if you need detailed access to your accounts – or if your accountant tells you that you need any of those things – I would go with QuickBooks.

At the end of it all, QuickBooks Online is an accounting solution for almost any small business, while FreshBooks is an invoicing and expense management software for service businesses.

Clearly, these aren’t the only two players in the market. If you’re looking for invoicing software, we’ve got a whole directory of options for you. If you’re looking for accounting software, we’ve got a directory for that too.

Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.

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About the Author

Andrew Marder

Andrew Marder is a writer for Capterra. His background is in retail management, banking, and financial writing. When he’s not working, Andrew enjoys spending time with his son and playing board games of all stripes.

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