Freshbooks Vs Quickbooks Vs Xero: Small Business Invoicing & Billing Made Simple (and which software is the best)

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Business invoicing can be a major pain in the butt if you don’t have the right system in place that’s easy to use. But I’m guessing you already know that. In this article, we’re going to go over the differences between some of the best invoicing software systems on the market, and compare their pros and cons. By the end of this article, you’ll be able to decide which is the best invoice software for your small business.

A little backstory…

My Freshbooks Review & Experience As A Customer

Freshbooks Review Comparison: Freshbooks VS Quickbooks VS Xero When I first started in the web services business many years ago, I was doing a lot of proposals, and business was still done in more traditional ways before everything went online. It was very common to get an email like: “hey we like your proposal, send us an invoice and let’s get started.”

The only trouble was, it took longer to make custom invoices and bill these clients, than it did to do the research on their business and put together a proposal! It should be the other way around!

Enter my Freshbooks experience…

I started poking around for a simple invoicing system that I could use for my billing, and somewhat automate most of to save me tons of time. I came across Freshbooks, and was able to setup my custom invoice template with my logo, letterhead, email, etc… And from then on, all I had to do was log in and enter in the clients billing info, and it spit out these great looking invoices and even automates a lot of the followup. Accepting payments is a breeze, and it’s still sending out recurring invoices as we speak to this day. My experience has been super easy to use, and most important, very reliable. (I still get email reminders from Freshbooks about things I forgot about from YEARS ago. I like that.)

Do You Need An Accounting Software System Or Will Freshbooks Do Everything You Need For Taxes?

You can export all of your transactions from Freshbooks and import them into any account software of your choosing come tax time. (or simply hand them off to your CPA if you have an accountant)

But for a lot of startups and small business owners, I think a full featured accounting system is a bit of a focus killer. It can take a while to learn how to use it, and if you’re not generating substantial income yet, that should be your main focus. My point is, Freshbooks helps you get paid, and Quickbooks helps you do your accounting and taxes.

If you’re just starting out, or your a small business, the only thing that’s going to move the needle is sales, so make sure you stay focused and not get lost in setting up complex systems when you don’t have the revenue yet. (this is a mistake I made early on many years ago… I wasted sooo many hours setting up these complex systems “perfectly” so when the day came that I made all this money, everything would flow smoothly. Trouble was, I was focusing on the wrong thing, and that money never came until I stopped wasting time on bullshit.)

>> read this article to find out if Freshbooks has all the P&L features you need…

Truth is: that accounting package is probably going to be complete overkill for the majority of small businesses. In fact, I’d go so far as to say that the entire concept of general ledger accounting is completely unnecessary in many businesses in their early stages.

The key question would be: do you want to learn how to be an accountant, or do you just want to generate bills, keep track of who owes you money, and make sure your books are in good order for tax time? – Freshbooks Blog

Is Freshbooks The Best Accounting Software For Small Business?

If you need a full features accounting software for taxes, no it’s not the best for giving your account or cpa user accounts, charting different account expenses, and so on. But the invoicing and billing system is far simpler and more professional than you’d get with a traditional accounting system. They’re really designed for two different things, and throughout the year for billing clients on a monthly basis, Freshbooks will excel in that department and make your life easier. Later in this article, we’ll talk about what to do in order to get ready for tax time as a Freshbooks user.

Something you normally cannot do…

One of the nice things with Freshbooks, is that clients can make partial payments which isn’t normally allowed with most billing systems. You can accept credit cards for this as well, all you have to do is enable “Partial Payments” on the credit card payments page in your account.

Enter the small business accounting & invoicing software system comparison…

Freshbooks Vs Quickbooks Vs Xero Comparison: Which Is Better For Invoicing, Billing, & Tracking Expenses?

Keep in mind, this is not a business accounting software comparison intended to do everything. It’s focused on getting you paid faster, more professionally, and with the most flexibility for your clients (partial payments, credit cards, online invoices, etc… ) If you’re looking for the best fully featured accounting software for businesses for tax time, click here to read my review on the best small business accounting system.

First let’s compare price before we get to the pros and cons:

* Compare Pricing:

*prices may change after the time of original publication

Freshbooks VS Quickbooks

Freshbooks Vs Xero

Which is better is a hard question to answer right out of the box, without taking into account what your primary needs are. Based on the functionality listed below, and how you plan to grow your business in the future, will help you determine which is the best solution for your business. Freshbooks is primarily targeted at business owners who want a sleep trimmed down version of an invoicing and expense tracking software in the cloud. Xero trys to do both, but when it comes to expense tracking, it leaves a bit to be desired. If you’re looking for an all in one solution, neither are it. They both excel at different things, and you have to get really clear on what your most important needs are today.

Xero is a fully functioning account software system like QuickBooks Online, and Freshbooks is streamlined to make invoicing as simple as possible (much like how Grasshopper makes toll free numbers easy as pie), by intentionally removing some of the features that would normally clutter up an accounting system (that tries to send invoices regularly). Again, Xero is a fully featured accounting software, versus a focus on billing and invoicing only with Freshbooks.

  • Freshbooks is almost half the price depending on your price plan needed
  • It’s harder to add expenses to Xero
  • Freshbooks doesn’t have payroll, although they integrate with other options that do
  • Xero is better at other account functions like Quickbooks Online
  • Freshbooks is focused on making online invoicing and online billing as simple as possible

Quickbooks Vs Quickbooks Online

There’s really no reason I see in this day and age to buy local software unless you need it to work offline. Personally, with the way computers are rolling over these days, I’d rather have it in the cloud, and download a local backup for catastrophic recovery… That way I can work on my books from any device: laptop, computer, cell phone, ipad, etc…

I should note, that I haven’t personally ever purchased a full license for the downloadable PC version of QuickBooks Pro. When I signed up for QuickBooks Online, I saw right away that you have to pay for multiple users for the local version, and that was part of the draw for me in the first place… Being able to sync everything up, and give people access/user accounts for certain tasks. There’s only one reason I can think of not to go cloud based, and that is if you have a larger company where your staff is trained on QuickBooks integration and it’s a part of their daily workflow. When they update Quickbooks Online, the interface changes slightly each time they add new features. If you happen to have non techie employees, this might pose a problem to retrain them more frequently than you’d like.

Freshbooks Vs Quickbooks Online For The Self Employed

QuickBooks lacks a little invoice customization compared to Freshbooks, and you also have to pay for one the more expensive packages (pricing plans) if you want to be able to track 1099 info as well. But then again, QuickBooks has the ability to create a user login for your accountant or CPA to access all your data securely, which comes in handy at tax time. It really depends on what you intend to do with it…

The other major downside to QuickBooks for invoicing, is client data loss if you happen to grow beyond your current market reach and expand. More specifically, if you only serve the US markets now, but grow and expand into international client base, you would need to switch from Quick Books Online US to Quick Books Online GLOBAL… which is something you definitely want to know up front. The reason being, there is no import system to send your US customer data to the Global platform, and you would have to essentially start over and lose all that data input stored in your system. Not a huge deal for some, but it’s a monstrous task for others who have recurring billing to the tune of thousands of clients. I think eventually they will update their system to integrate cross platform and sync with Freshbooks too automatically.

Don’t Need No Stinkin’ Software And Do It The Old Fashioned Way?

Some people actually prefer to do their bookkeeping and account manually in 2016 and beyond. I’m not one of them, and really appreciate all the modern software systems available to me, since I’m not an excel pro. However, I do get the desired simplicity for some.

Quickbooks Vs Excel

Come on really? A lot of business owners are old school and just do it the old fashioned way using Microsoft Excel. Sure a spreadsheet bullet proof practically, but you miss out on some of the automated features I couldn’t live without like general ledger calculation graphs.

I’d imagine if you’re an excel wizard, you can easily create a pivot table to automatically calculate what you need. But that’s not for me, and I’d imagine most business owners don’t want to fool with it either!

Bottom line, if you know about all these details up front, it can save you a lot of hassle later on when choosing your invoicing system. Any of them are constantly getting better and better as time goes on, and are well supported.

The Major Difference Between Quickbooks VS Freshbooks

Freshbooks doesn’t track profit and loss on a per project bases like Quickbooks does. Certain types of inventory tracking that aren’t based on invoicing will be tough to do with Freshbooks also. You cannot do double entry accounting with Freshbooks either to my knowledge. But for time keeping and billing, Freshbooks is way easier to use for an invoicing system if you already handle your bookkeeping. Quickbooks will be pretty difficult to track time and expenses for multiple people/projects at the same time, unless you’re a one man band and intend on staying that way.

Which One Should You Choose?

  • Freshbooks – go with Freshbooks if you want the easiest software to invoice and bill clients professionally
  • Quickbooks – go with Quickbooks if you want complete online accounting

Freshbooks Alternatives

> Click here for a features comparison between Freshbooks and Quickbooks…

  • Wave Apps
  • Xero
  • QuickBooks
  • GoDaddy Bookkeeping

Conclusion: The Best Simple Business Invoicing Software Is…

Freshbooks, but it’s not a full blown business accounting software system that’s going to do everything under the sun. And that’s exactly what makes it the simplest invoicing software on the planet, so you can quickly and easily send professional looking invoices to clients, and get paid as fast as possible. It’s great for client billing and invoicing, but if you think you’re going to replace a fully featured accounting system that you can give your CPA access to, you’re sorely mistaken.

What I would recommend…

Use Freshbooks for all of your client billing, and use QuickBooks or Wave Accounting for bookkeeping/taxes because they’re both going to make your life easier in their own way.

Get Your Free Trial Of Freshbooks Here

Free Trial Of Freshbooks Online Invoicing System

Quickbooks & Freshbooks Integration: How To Sync Freshbooks And Quickbooks

Your best bet is to export journal entries from the reports section. If you don’t see a “Journal Entry” option under the “Reports” tab, just give our friendly support team an email at support at freshbooks dot com, and they can turn that on for you. – Tim from Freshbooks


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