Shouldn't accounting be easier with all of today's modern technology? That's one of the most common laments among small business owners. Whether you're trying to track income, note expenses, create budgets, or file your taxes, everything can seem just as complicated as it did thirty years ago.
Accounting software aims to put a stop to that. The point of accounting software is to use computer programs to automate a lot of the calculations, tracking, and financial management of a small business. There are dozens of different programs available.
Some programs have free tools, while others have a variety of paid versions that have different feature limits. Some can help with month-to-month bill management, while others may have trackers for expenses and travel mileage. The right software for you will vary depending on your specific needs.
Two of the most popular options on the market are Freshbooks and Quickbooks. Quickbooks is well-known for being an accounting software used by accountants dealing with large corporate finances. Freshbooks, on the other hand, is better known as a system used by freelancers and contractors.
I've taken a look at the features and setup of both programs to help you figure out which will work better for you.
Overview of Freshbooks and Quickbooks
Unique Freshbooks Features
Unique Quickbooks Features
When Freshbooks was first launched, the software didn't have a huge number of features. Over the past few years, though, it's been outfitted with enough features to rival the competition. It's best for sole proprietors, since the program structure doesn't allow a lot of room for an expanding business.
One of the more recent features is the addition of acceptance of ACH payment. There's also the ability to input information about retainers. This is ideal for accountants, attorneys, and other self-employed professionals who frequently work on retainer.
Another feature that makes Freshbooks a strong competitor is the use of double-entry accounting software. Whenever you enter a financial transaction, the system will make a corresponding transaction.
When you open the dashboard, some of the immediate things you'll see include:
It's also easy to invoice with the software. Rather than needing to add clients in a separate location, you can add new clients to your business as you create their invoice. Each invoice can be customized with different settings and payment options. You can set up recurring invoices and further customize invoices from your entry screen.
Another selling point is that the system automatically imports your business banking transactions and expenses. The software has the ability to track time, ideal for creators and professionals who price based on an hourly wage. This allows you to create invoices, proposals, and estimates based on how long a project takes to complete.
There are limited options to manage your clients and vendors through the system. You can create an automatic prompt to tell your clients if their invoice is past the due date. It's also possible to add late fees and change your preferred language and currency for different clients. Your accountant can access your data without any extra charge.
With Quickbooks, you'll find many of the same features that you get with the other system. There are most of the same invoice customization options, including the ability to create recurring invoices. You can manage retainers through the software, but it's not as easy.
Different plans have different available features. The Simple Start plan has the most basic accounting features. When you get into the more advanced premium options, you get tools like bill payment, inventory management, and time tracking. It's also possible to connect your bank accounts to create automatic reconciliation.
By using the Accountant option, you can share your program data with your accountant or CPA.
The vendor and customer management capabilities are much more advanced than in Freshbooks, which makes this software ideal for those with larger enterprises that manage complex clients. Some of the account-to-account preferences that you can customize for each client include:
Freshbooks wins because most of the features are easily accessed without needing to purchase a premium account. For the average small business owner, everything you need is included for a fraction of the price. However, if you need more advanced client management software, you should definitely go with Quickbooks.
Freshbooks has extended business hours during which people can use telephone and email support. For subscribers, there's a toll-free number to help with program issues, troubleshooting, and sales questions.
There's also in-product help and an in-product messaging system that lets you contact support staff. Online, you'll find a knowledge base with a ton of articles and easily-searched FAQs.
Quickbooks allows you to contact support agents through email, one-on-one messaging, or phone calls. There are also featured articles and training options. Online is a searchable knowledge base that also includes featured articles about how to use the system.
Quickbooks wins because it has messaging support available more readily than other forms of user support. If you prefer to solve problems through the telephone, though, the Freshbooks support is much better equipped.
Ease of Use
The Freshbooks dashboard walks you through the setup process and tells you how much is left. It has a very easy-to-navigate interface that lays out all of your options and different resources. If you need help, you can start a chat from any screen.
Quickbooks is fairly easy to set up, and the interface isn't difficult to use. However, it doesn't have the same in-system educational resources available. This means that you might have trouble navigating if you're new to financial management software and don't have an accounting background.
Because of the amount of help and ease of setup, Freshbooks comes out ahead here. It's one of the best choices for people who aren't used to financial management software and don't know where to begin.
Pros and Cons of Freshbooks
Pros and Cons of Quickbooks
Final Thoughts: Which Is Better?
Both of these financial management systems are good choices to help small business owners and freelancers handle their affairs.
Quickbooks works best for those who have larger enterprises that need managing. It's outfitted with premium features that allow ongoing management of month-to-month expenses and bills. You can also use customized invoices and manage your clients. However, since it's not as intuitive, it's best for those with some accounting background.
On the other hand, Freshbooks works wonderfully for those who want an affordable and easy-to-use software. If you're a freelancer or contractor who doesn't have much business background but needs an easy way to keep track of expenses and income for tax time, this software comes with everything you need for a fraction of the Quickbooks price.