When it comes to Accounting packages, it's never been so easy for startups and small businesses to access great accounting functionality affordably through great cloud-based solutions. Our clients who prefer cloud-based solutions have primarily worked with QuickBooks Online and Xero, but recently we encountered a client using FreshBooks, which I had always assumed was 'the same thing'. It's not. FreshBooks, despite it's marketing, is NOT really an Accounting package. This became crystal clear when I attempted to compile the Balance Sheet for the client and the software presented me with a blank sheet that I had to fill in numbers for. Seriously??!! I immediately googled 'FreshBooks Balance Sheet' to make sure I wasn't dreaming about a tool that calls itself "Cloud Accounting" and discovered other kindreds out there who shared my strong reaction to their marketing position.
I prematurely rushed to the conclusion that FreshBooks is a terrible rip-off that is scamming entrepreneurs with this broken system that is comparably priced to the legitimate accounting tools. But upon further reflection, and consideration of the specific needs of my service-based client, I had a change of heart. The fact is it is a very simple system that has enough bells and whistles to nicely handle the needs of a minimalist business. I have changed my position to a warning of 'buyer beware' because there are, in fact, some great reasons why Startups and Small Businesses may be just fine on FreshBooks.
FreshBooks does a pretty good job of making it easy for people with no accounting background to generate invoices and track spending. For Consultants this is almost all you need in order to file HST and Income Tax Returns. If you have a experienced Accountant on standby they can take your FreshBooks file and with a few questions will be able to complete your tax filings accurately for you. FreshBooks handles time tracking, expenses, and even collaborating with subcontractors quite nicely and without the complexities of extra bells and whistles which can overwhelm novice users.
This software is not for every entrepreneur though. Without true functionality of a true Accounting software, users will be limited in their abilities to assess Net Worth, manage cashflow, or issue Financial Statements to secure loans, etc. And because traditional double-entry accounting is not being tracked you will need to engage Accountants when it comes time to graduate into a full Accounting package. This could be a costly transition depending on the nature and scope of your business.
All this to say, FreshBooks MAY be a great choice for your business if you want to do your own books. If you aren't sure what the best software is for your business, feel free to share your situation and I'll be happy to help you decide.