FreshBooks was founded in 2010 and claims that more than 10 million people have used the cloud-based accounting software. The key word here is “people” and not customers meaning that there is likely a much smaller customer base actively using the application. Still, there is no doubt that FreshBooks is a popular option for many smaller businesses – especially for those who are self-employed or very small professional service firms that bill for time (contractors, agencies, consultants, etc.). FreshBooks is NOT a great product at all for inventory-centric businesses like distributors or manufacturers.
It is very clear that FreshBooks target is the start-up and very small business. A letter from the CEO states, “There are 60 million small businesses in the English speaking world and only about 17% of them use accounting software. The rest mostly use Word and Excel.” That tells us exactly who they are targeting and why not – they have a great point. But don’t be mistaken, FreshBooks is not a mature accounting application like Intuit QuickBooks or Sage 50 US.
A few of the great things about FreshBooks are the incredibly clean and modern user interface and the simplicity of the application itself. The heart of the software is invoicing which has some surprising features including recurring invoices, automatic late fees, and reminders. Time entry is fairly robust for an entry-level accounting application but there are limiations in the project system and larger firms will be better served with a true professional services automation (PSA) application or SMB ERP system with project accounting or job cost modules.
There is no true accounts payable module but small companies can manage basic expenses. Basic reporting and credit card processing is also available. The application can be accessed anywhere you have a secure browser connection including your mobile device. They provide web APIs for developers to integrate third party applications and there are currently 15 apps available on their marketplace but nothing that would extend FreshBooks outside its core target market into any other industry segment.
FreshBooks pricing is based on the number of clients or customers actively managed in the software. Lite is $15 monthly for up to 5 clients; Plus is $25 monthly for up to 50 clients; and Premium is $50 monthly for up to 500 clients. There is no pricing beyond this point so we assume that companies with more than 500 active customers will most likely be using another product.
The company is based in Toronto and employs more than 200 people. FreshBooks has had great reviews and is likely the second largest online accounting application in North America (second to Intuit QuickBooks). Although they face significant competition from others like Xero.
The company was born out of the co-founders’ previous business, Anicon, which provided internet marketing services. It launched as 2ndSite but was rebranded in 2006 as FreshBooks.
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