Bottom-line Up Front: If you’re in a service-based business, Freshbooks will save you time, money, and headaches when it comes to invoicing, payments, and billing reporting. (Click here to share this — thanks!)
Every service-based-business owner knows how much of a pain billing and invoicing for your services can be. From estimating services, to tracking time, to creating and sending invoices, and then tracking down the status of payments, a considerable amount of your business management time can go just to all of the varied activities required to get paid.
Freshbooks is a software-as-a-service application that makes the whole process easier and much more streamlined and systematic. If there’s any place in your business you want ease, streamlining, and this-works-and-makes-sense systemization, it’s payment, as that’s the very place where owners and clients alike can get squirrelly. Your clients want service, you want to get paid – Freshbooks helps both parties get what they want.
What’s Great About Freshbooks
Here are the major highlights of what makes Freshbooks great:
- It’s dead simple to make and send invoices AND get paid. No more having to mess around with a document template, save it as a PDF, send it, and then explain how the client can pay you. When your client gets his invoice, it includes the payment options, and your client can click and go to a secure payment system right from the invoice. You can also set up recurring payments with Freshbooks; this is great for clients on payment plans or with retainer agreements because you no longer have to remember to bill them and/or chase down payments.
- New feature as of Q4 2015: you can get deposits for work. Rather than sending multiple invoices for deposits, clients can just pay a deposit on the invoice you sent.
- You can see when clients look at invoices, how long they take to pay, and what’s happening with your invoices. You don’t have to think about whether your client has seen the invoice, so if you send one and notice that after a few days, no one has taken a look at it, you can check in to make sure he got it. This multifaceted view of your payment process goes a long way with cashflow projections, as it helps you more accurately predict when you’ll get paid.
- It provides a unified place to keep track of and pay independent contractors. It’s excellent on this front in two ways: 1) you can have all of your IC invoices in one place, and 2) if your ICs use the Freshbooks time-tracking app, you can see how much time your team is working per day, per week, and per month. This is really helpful when it comes to capacity planning – for instance, I don’t have to ask some of my teammates what their weekly capacity is because I can look back and see what it’s been on average.
- Speaking of teammates, staff members can use your account, too. Your staff can track their time and create and follow up on invoices, which is great if you’re in a team that has multiple client-facing people. You can see who’s doing what, and, more important, you don’t become a bottleneck to billing and invoicing.
- Freshbooks is mobile, just like you. Freshbooks has a fairly robust mobile app so you can do your estimating and invoicing when you’re on the go. Imagine how a prospect feels when she can agree to the service over coffee and pay before she leaves the table if she wants to. Imagine how you’ll feel when you don’t have to wait until your mobile service staff get “back to the office” to do their estimates and billing.
- Their partnership with Fundbox provides new cashflow options. Fundbox is a service that lets you borrow against your due invoices, so if you need the cash today but know your client won’t pay until next week, Fundbox can help there. Freshbooks and Fundbox are integrated so that Freshbooks invoices are available in Fundbox to borrow against.
- You can have a good view of all invoices in the same place. Since Freshbooks is a service that allows you to both receive and send invoices, you can easily see what’s incoming and what’s outgoing. You’ve got enough random bits of information to chase down – invoices shouldn’t be on that list.
- Freshbooks plays well with others. Freshbooks has a robust API that allows you to hook it into other services, especially if you use a service like Zapier that hooks into other applications. Want people who pay for an invoice to show up in ConvertKit? No problem. Or maybe you want a form submission to turn into an invoice that’s sent to the submitter? Easy.
What Would Make Freshbooks Better
There is a lot to love about Freshbooks, but the following are some items that need improvement:
- Creating a link to an invoice is harder than it needs to be. To be clear, you can do this, but it’s not as easy to do as other actions within Freshbooks, so the clunkiness here stands out more. Having the link to an invoice is useful when you want to send an agreement with payment instructions right in it – which we do – because it removes a few steps in the sales process and speeds up payment and service.
- There’s no auto-bill-only setting for invoices. When clients pay recurring invoices, they have to specifically choose automatic billing, and it’s a small call-out on the invoice. Inevitably, some clients will miss it or forget that they need to do it – despite being both instructed and shown how to do it – so you’ll either need to get their payment information or be prepared for there NOT to be regular payments the following month as your clients stall on the invoice. Making an auto-bill-only payment setting would eliminate this hassle.
- Reports cannot combine recurring and non-recurring billing. You can get projections that account for recurring billings and reports that show open invoices, but not one report that accounts for both – which is exactly what you need when you’re doing cashflow projections. Having to flip between two screens that could easily be consolidated is inconvenient and ineffective. If Freshbooks was just aiming to be an invoicing and payment service, I’d be less adamant about this, but they’re positioning themselves as “cloud accounting;” to deliver on that, they’re going to have to step up their reporting views so that we don’t need to go to spreadsheets or QuickBooks Online instead.
- PayPal can no longer be used with auto-bill. When Freshbooks updated their platform in Q3 2016, they changed the payment gateways through which you can receive auto-payments from your customers. You no longer have the option to use PayPal as a payment gateway for auto-billing. You can still use PayPal for one-time invoices, but for auto-billing you have to use Freshbooks’ new payment gateway, Stripe, or Authorize.net. Due to our business streamlining to use PayPal for all online purchases, this change pushed us away from using Freshbooks, despite many conversations with Freshbooks folks about it.
Buying Advice: Get Started with Freshbooks Today
If you want to have a great business, you have to do more than just deliver great results to your clients. You also need to manage your business and figure out ways to save time and energy. Additionally, starting out with a professional billing and payment process helps establish confidence in your service early on.
UPDATE AS OF 2019: Freshbooks offers accounts starting at $15 per month for 5 clients and goes up to $50 per month for 500 clients. You can add access for other team members for $10/month each. Every time I do an audit of how much time and energy a business is spending on billing, it shows that the team is spending many multiples of $40 and still doesn’t have an easy, streamlined, and systematic billing and payment process.
If you do nothing else, check out the free account to see how Freshbooks might give you ideas for how to improve your billing and payment processes. As I mentioned above, if there’s any place you want professionalism and peace of mind, it’s in how you request payment and get paid.
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Affiliate disclaimer: The links to Freshbooks in this piece are referral links, so if you use them, I will receive a commission if you choose to subscribe to the service. I recommend only products and people I use or trust, and if I wouldn’t recommend something without a commission, I wouldn’t recommend it just because it has a commission. I hope this review helps you make an informed purchase decision, but fundamentally, I hope it helps you spend less time getting tripped up with invoicing and getting paid, and more time taking care of your clients and yourself.