QuickBooks vs. FreshBooks | Which Business Accounting Tool is Better?

QuickBooks is one of the most well-known accounting software platforms available. FreshBooks, however, has recently become much more popular, particularly among freelancers and small business owners.

While both software picks can provide some accounting services, they also have slightly different focuses and features. Let’s break down QuickBooks vs. FreshBooks in detail to see which business accounting tool is better for your particular needs.

What is QuickBooks?

QuickBooks is the older of the two software companies, and it actually comes in two types: QuickBooks Online and QuickBooks for desktop computers. In most cases, people now use the online version, as it allows accountants and other financial professionals to use the software anywhere they can connect to the Internet without having to physically install the software on their computers.

QuickBooks is designed for heavy accounting and banking functions and is preferred by many accountants due to its complexity and robust features. Furthermore, the Online version of the software is constantly being updated and has recently become much more intuitive than the original desktop variant.

What is FreshBooks? 

FreshBooks, on the other hand, was founded in 2003. It was created to offer extremely small businesses and freelancers some accounting and financial assistance in the form of a user-friendly and intuitive toolset that includes invoicing, time tracking, estimate creation, and other functions.

Note that, while there is some significant overlap, both FreshBooks and QuickBooks have certain features that the other does not. This means that either software could be the better choice for your business depending on your needs.

In short, FreshBooks is software primarily created for invoicing and expense tracking for small businesses and freelancers. QuickBooks is much closer to “real” accounting software and may be preferred by businesses looking to hire full-time accountants or bookkeepers.

Feature Comparison

Let’s take a more detailed look at how the features of both QuickBooks vs FreshBooks compare before you make any final decision.

Invoices

Invoicing is a key part of any accounting or financial software. QuickBooks has a lot to offer here, both in terms of raw invoicing software and in terms of invoice formats or templates. You’ll be able to create tons of different invoices for a variety of needs, customers, or clients. In fact, QuickBooks offers an invoice builder that allows you to customize invoices according to your needs.

Added to that, you’ll also be able to add a “click to pay” to any invoices to allow clients to pay you quickly and directly from this platform.

FreshBooks also allows you to customize your invoices and add a click to pay button to them. However, invoices created from this platform will pull data directly from its excellent timekeeping feature (more on that below) provided you mark certain hours correctly. FreshBooks also provides several automated functions, such as recurring invoices and automatic invoicing.

QuickBooks is a little better in terms of customization but FreshBooks has a slight advantage in terms of automation within this category.

Timekeeping

Let’s start with FreshBooks. This software offers built-in time tracking features. In a nutshell, this will allow you to track the time spent on specific cases or projects, making it a particularly good choice for freelancers. All of these functions can be viewed right on the dashboard, helping project managers keep track of various moving pieces for individual employees.

On the flip side, QuickBooks offers many separate add-on features you can pay for apart from the main subscription plan. These allow you to track payroll for both full and part-time employees. Alternatively, you can enter payroll expenses as separate expense items and bill them accordingly.

Both types of software allow you to practice timekeeping consistently. But FreshBooks makes it a little easier thanks to its dashboard design.

Accounting

QuickBooks, being accounting software first and foremost, easily takes this category. It allows for double-entry accounting so any account in your business can easily keep all of your sheets properly balanced and organize your cash flow. Note that many people have a little difficulty with QuickBooks in terms of its complexity, so accountants will be able to take advantage of its robust accounting features more easily than most.

Once the system is figured out, however, you’ll likely find that QuickBooks has everything you need in terms of pure accounting software and more. It also makes it easy for you and/or your accountant to share data back and forth.

FreshBooks doesn’t offer any accounting software at all, though you can manually enter data through blank balance sheets to do your own accounting work. Still, this just emphasizes the different purposes of both software.

Integrations

QuickBooks is a market leader in terms of integration with other software. In fact, you can integrate your QuickBooks with over 400 different software add-ons, including add-ons for bank transactions, e-commerce transactions, and more. With a little time and some well-researched downloading, you’ll have a complete software suite on your hands in no time.

FreshBooks does allow for some integrations, but most of these are geared toward freelancers and various small business types. For instance, add-on tools include human resources apps, tax filing add-ons, and more.

Overall, both make integrating different pieces of software relatively easily, though QuickBooks offers a little more variety.

Tracking Expenses

When using QuickBooks, you’ll be able to track both debit and credit expenses. This makes it easy to keep track of all your profit and expense margins at every step of your business’s evolution. Note that QuickBooks relies on a little more manual entry and regular accounting work. But that’s just because the software is designed on purpose to show different line items overall for a bird’s eye analysis of your financials.

FreshBooks, in contrast, emphasizes invoicing and payment collection. This means you may have to pay for an additional expense tracking or accounting system. However, it does include certain special expense features. These include sales tax management, project-specific time tracking, and even receipt tracking.

Reporting

Lastly, QuickBooks makes it easy to generate and send reports using its platform. This, again, is perfect for trained accountants that need this functionality to do their jobs. Available reports you can generate include:

  • Accounts payable reports
  • Accounts receivable reports
  • Products and inventory reports
  • Sales tax reports
  • Expense reports

FreshBooks does have a reporting feature that will allow you to create reports for things like your profit margin. However, it’s more of an invoicing or time tracking platform and doesn’t have the same variety or depth as QuickBooks.

User-Friendliness

Fortunately, both software choices are pretty user-friendly and intuitive at first. Their user interfaces are streamlined and easy to understand. But QuickBooks quickly becomes more complicated, especially as you dive into the accounting aspect of the platform.

In this regard, FreshBooks is a little more user-friendly, if only because it’s a simpler product overall and doesn’t have as many complex accounting functions or tabs to manipulate.

Customer Support

Both QuickBooks and FreshBooks offer several customer support channels, although QuickBooks users will have to pay extra for real support. It only offers phone support by default (alongside a built-in product knowledge base). This can make finding support for a specific technical problem a little tricky unless you pay extra

FreshBooks, on the other hand, does offer another detailed knowledge base, plus phone and email support. This makes it a little easier to get in touch with someone who can guide you through a software tutorial or help you navigate the user interface for the first time.

Overall, FreshBooks is a bit better in this category.

Pricing

You’ll also want to consider pricing before making a final decision.

QuickBooks Online offers a few different plans with prices ranging from $25 per month to $150 per month. The higher you go in the subscription tiers, the more features you’ll get and the more customer support you’ll get as well.

In contrast, FreshBooks is much more affordable at every step. For instance, its basic “Lite” plan is just $15 a month while its highest-priced “Select” plan has variable pricing based on what exactly you need. Still, FreshBooks is overall more affordable and is thus an exceptionally good choice for smaller businesses with tighter budgets.

Summary – Which Software is Right for Your Business? 

As you can see, neither QuickBooks nor FreshBooks is really “better” than the other. Instead, they serve different purposes and are designed for different target customers.

Which should you choose? If you’re a freelancer working by yourself or have a very small online business, FreshBooks is probably the better choice. It’s more affordable, has more features that you can take advantage of without needing extensive bookkeeping software (such as timekeeping and invoice generation/automation), and is a little simpler to learn.

But if your business is taking off or if you need dedicated accounting software for your accountant or CPA, you should look into QuickBooks. It offers some of the best deep accounting software in the industry, plus has a bunch of additional features and add-ons you can install onto the platform as you need them, helping your business to run more smoothly.

Overall, both software choices have their place. 

Looking for more business resources? Check out Seek Capital’s small business funding options or our blog for more helpful business best practices and info!

 

Sources

https://www.picpa.org/consumers/cpa-locator/what-does-a-cpa-do

https://www.investopedia.com/terms/i/invoice.asp

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