Professional Invoicing and Financial Tracking for Freelancers: FreshBooks Review

affiliate-link-png

freshbooks-review

If you’ve ever read any of my income reports, you’ve probably seen a screen shot from my FreshBooks dashboard, which looks a little something like this:

Home Page

 

FreshBooks is my accounting/invoicing software. The two income tracking charts displayed here are only a fraction of the conveniences FreshBooks offers. This company and their software make my life so much easier, and I’m so glad I learned about it from the forever lovely Gina Horkey.

Before FreshBooks, you know how I kept track of my income? In a damn journal. I scribbled down who paid me, what they paid me for, and how much they paid me. I tried keeping track of expenses by paperclipping my receipts to the journal … yeah. That was okay, I guess, when I was only working part-time, but when I decided to dig in my heels, boost my rates, and go full-time I knew keeping track of financials was going to be a HUGE headache. Too bad I didn’t make this switch and discover Freshbooks until May because this tax season, I’m going to have to rustle up that journal and pray to God it’s accurate and that I didn’t miss anything for those first few months of 2016.

Before Freshbooks, you know what my invoices looked like? Uh, well, I didn’t have invoices. First, I used Upwork, and they kept track of it all for me, but no one was viewing me as a professional/expert on Upwork. When I got off Upwork, I was just using email and PayPal. I didn’t send an actual invoice; I just agreed on the price with the client, and then when the job was done, they sent me the payment through PayPal. Luckily I had good clients who didn’t need to be reminded to make payments. Still, with that method, I was coming across as a kid with a hobby, really. I still wasn’t getting paid professional rates, and whenever I got a new client there was usually an instant haggling game because people sensed they could push me around. Now my invoices look like this.

Mock invoice

 

Way more professional, especially since the recent update. Before, the invoices were professional, but very simple. Now you can add the personal touch of a picture header. They’ve also added some new features, like the easy, customizable reminder feature circled in dark purple. It will remember your reminder preferences for each client.

How FreshBooks Can Help You

Look Legit: You want clients to view you as a business person? You want them to respect you and your rates? Your business has to look like a business. When you send a clean, official-looking invoice that has a time limit for payment listed under “Terms,” your client is more likely to pay attention and get you paid as soon as possible.

All-in-One Payment SystemFreshBooks provides a secure payment system called WePay right through their invoices (circled in light purple in the image above). When the client receives the invoice, a link is provided that sends them to the payment system where they can quickly pay with a credit card. If you choose to use this method (it is optional), payments made this way will automatically be catalogued and the small fee taken by FreshBooks (very similar to PayPal’s) is automatically logged into your Expenses. It’s convenient for both parties. Inserting a payment made via check or PayPal, etc., isn’t difficult; it just takes a few clicks. But if you use the WePay system, you don’t even have to think about it.

Easy Time TrackerDo you work under hourly rates a lot? FreshBooks has a Time Tracking software that allows you to not only be 100% certain about the time you’ve logged, but also allows you to easily attribute that time to a certain project and a certain task within that project. So say a client was having you build a website for them. You could log everything just under that project, titling it “X’s website.” Or, you could log how much time you spent doing the homepage, the testimonial page, etc. You plug in “X’s website” for the project, “Homepage” for the task, and hit the start button on the timer. After you’re done, you can generate an invoice based on that tracked time with a few simple clicks and send it to the client with a detail of everything you did with the exact time lengths and any notes you jotted down along the way.

Time Tracker

Create EstimatesDoes your line of work make it hard to create fixed rates for your services? You can create estimates that detail all of your charges. If you were, say, putting together a book project, you might have a charge for research, a charge for crafting an outline, a charge based on estimated word count, an extra charge for fast turnaround, etc. You can write out descriptions detailing what each service includes and the price of each. The total will be displayed at the bottom. If you offer multiple packages that offer varying levels of service, you can send an estimate that details what is in each package and what each package costs. If the client wants to go ahead with the project after considering the estimate, the software allows you to easily convert it into an invoice.

Estimates

Log ExpensesNo more paperclipping my receipts to a journal page. I recently bought a new theme for my business site. That is a deductible business expense. All I had to do was fill in what I bought, select a category (you can create your own or use the ones FreshBooks already has loaded like Education/Training, Taxes and Licenses, Subscriptions, etc.), and insert the payment amount. Even better, FreshBooks lets you upload images or files to the expense log, so I saved a PDF of the receipt for that purchase. Now I don’t have to worry about printing out the receipt and trying to keep track of a piece of paper. FreshBooks will also automatically log the small fee they take from each invoice for their secure payment services (just like PayPal), as seen in the screenshot below of my expenses page.

Expenses

Detailed Income ReportsThe dashboard charts I showed you are the tip of the iceberg. FreshBooks uses all the data from your invoices and your uploaded expenses to create tons of different reports for you. You can see every invoice you’ve ever billed, who you sent it to, and when/if they paid you. You can view your invoices within a specific date range or by client. You can even select if you want to view them by the day you billed the client or the day you received the payment. There are also reports that let you see which clients are taking the longest to pay you and which clients provide you with the most work/income. You can get a Balance Sheet at the touch of a button and, if your business deals with buying and selling products, you can view a tax report. You can also get a report on your profits and losses to make sure you’re making more than you spend and gauge where you may need to cut back on your spending.

These reports will be indispensable come tax time, which is always a huge headache for small business owners, especially those with no affinity toward numbers whatsoever, like myself. These reports also helped my husband and I out when we were trying to get approved for a mortgage. Even though I hadn’t been freelancing long enough for the mortgage company to consider it a steady, reliable income (so sucky), our loan officer was still able to use them to prove an additional cash inflow that added to my husband’s income. She was very impressed with them, and I felt like a badass.

Work with OthersFreshBooks has features for business owners who have employees or work with other freelancers a lot, too. For instance, you can add team members to your account and projects. You can receive and log estimates and invoices from other people on your account. Under the new “Projects” tab, you can create a project page where your employees or contractors can all talk and contribute to/update the project details and components. When in full use, it looks like a Facebook page for your team.

Add Hourly Project

However, as I don’t use these features, I am not the best person to speak to their usability and convenience. I’d wager, based on all the features I am familiar with, that these other aspects of the software are awesome, too, but I’m not going to try and personally detail them for you, as I can’t speak from actual hands-on experience with them. Just know they are available if you need them.

App CollaborationFreshBooks has created relationships with 14 (for now) other common freelancing/small business management apps like Stripe and Google for Work. You can connect all your business apps, easily find all your relevant info, and use all of your programs without hassle, which is pretty damn cool.

Pricing, Packages, and Fees

First off, you can try a free 30-day trial for all three of the available packages. That’s what I did, and there’s really no reason not to. They aren’t tricky about the trial. You don’t have to put in a credit card number to sign up, so they aren’t going to charge you if you forget to cancel; you just won’t be able to access the account until you upgrade. They also send you a reminder when your trial period is almost up. I fell in love with it after only using it a week, and when my thirty days were up I bought the smallest package, the Lite.

There are three packages to choose from. All three offer all of the same perks, so you don’t have to sacrifice any of the great features because of a smaller budget. The difference between the packages is how many active clients you can have at one time. With the Lite, you can bill 5 clients at once for $15. With the Plus, you can bill 50 for $25 a month. And with the Premium, you can bill 500 for $50 a month.

Notice it says “active clients.” I have had way more than five clients over the past year, and I have billed them all with the FreshBooks account. It’s not like you can only put in the information for five clients and then you have to upgrade to Plus to input a sixth. Clients can be deleted and new clients put in. You just can’t have more than five with active invoices. And FreshBooks makes managing clients super easy. I have recurring clients who are authors. I delete them from my active list after I finish editing one manuscript for them, but when they need an edit on their next manuscript, I can just go into a list of my deleted clients and “restore” that client with all their relevant contact information.

The only complaint I have about the whole FreshBooks system is the huge gap in active clients between the Lite and Plus packages. There’s only a $10 difference but the gap between the client amounts is pretty huge. Why can’t the Lite package have like 15 active clients if it isn’t that much of price difference to get 50? There’s no way I’m going to bill 50 clients at once right now, so buying the Plus doesn’t seem worth it. However, I may need to switch anyway because five is starting to push it for me. I’m getting to the point where I have to delete one client on Monday, wait for someone to pay their invoice, and then restore that deleted client on Thursday. If you do traditional freelancing and you have to wait for editor approval or even publication to get your paycheck from a magazine/journal, you may want to go ahead and buy the Plus plan. The Lite works for me because I’m lucky enough to have clients who pay quickly, like within the week. There is a pretty huge gap in client numbers between the Plus and Premium, too, but I feel like if you have a couple hundred clients, you aren’t that worried about jumping to $50 a month.

Still, my complaint really isn’t that large because it’s totally worth the money just for the sheer convenience the software provides.

One other minor irritation is that some people’s emails will divert your first invoice to their junk file because it doesn’t recognize the sender. However, because I know this, I now tell new clients when I’m going to send the invoice and let them know to check their junk folder if they don’t receive it shortly.

Lastly, like any secure payment program that allows you to accept credit card payments, there is a fee taken when someone pays you through the WePay system. For Visa and Mastercard transactions, it takes 2.9% + 30 cents (the exact same amount PayPal charges), and for American Express, it takes 3.5% + 30 cents. This reimburses FreshBooks for the transaction processing fees and is entirely standard in the industry. Plus, it’s WAY better than the whopping 10–20% a site like Upwork takes from you.

Final Thoughts

FreshBooks helps you look professional even if you are just starting out. If you are brand new and don’t have any paid samples, but you can give a client who is on the fence about hiring you a professional-grade estimate, you suddenly look way more attractive. You have your shit together. Once your career gets started, you’re going to be so grateful to have something keeping track of everything you’ve billed, everything you’ve paid for, and everything you can deduct from your taxes all in one place. If you want to invoice like a freelancing rockstar and save yourself a whole lot of tears at tax time, go sign up for the free trial. You won’t regret it.