Professional Invoicing and Financial Tracking for Freelancers: FreshBooks Review

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A few weeks ago, I wrote about the decline in freelance business over the holiday season, and I showed you a little screen grab of a chart that displays my monthly earnings, like this.

chart

This is from my dashboard in my accounting/invoicing software, FreshBooks. This monthly income tracking chart is 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.

invoice

Way more professional. It should also be noted that the invoices in the new version of FreshBooks are even better. They have a header space where you can insert your logo or an image, and everything is brighter and even cleaner. I am so excited to get switched over to the new version. Everything is more visually appealing, and they’ve added some new features, which I will get into later. The reason I am not switched over is that I paid for the software in full for a year, and the new version costs a little bit more. I also have the smallest available package because my business is still fairly new. The company sent me a very nice email explaining that my switch would be made soon, but it was taking a bit longer because they want to ensure that my pricing and package are not changed in the process. Once they get me switched over, I will update this post and make a full tutorial on how to use the program.

For now, I’d like to outline all the ways FreshBooks can help freelancers run their business.

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. 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.

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.

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.

Detailed Income ReportsThat little chart I showed you is 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. 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.

The Updates

Since I haven’t been switched over to the new version of FreshBooks, I can’t give you first-hand accounts of how to use the new features. However, since I am a FreshBooks member, I’ve been getting lots of emails about the updates. So let me tell you what I know.

Stellar DashboardThe whole dashboard has been totally redesigned to make things even easier to find and add a whole lot more visual appeal that will make you happy when you look at it. Don’t believe that a pretty dashboard can make you happy? Look at my chart up there, and then look at the chart images on the new homepage. Tell me your heart didn’t pitter patter (or maybe I’m just weird). Anyway, it’s all much prettier, and the charts appear a little more detailed, too.

Knock-Out InvoicesYour invoices are going to look AMAZING. The invoices in the old version are professional, clean, and great, but the new ones put them to shame. You’re going to look like you either run a design company or you have the dough to hire one to do your dirty work. They have different templates to choose from now, so you can choose a style that fits best with your logo type and your personal preference. You can even change the freaking font! (God, I feel like a nerd; I’m just a little too excited about this.) You will be able to easily set up automatic payment reminders to gently nudge that client who tends to be a little scatterbrained. You can also set up automatic payments if you work with a client who gives you a set amount of work at a set rate each week/month. Got a client who takes forever to pay? You can use the software to add a late fee to the invoice after a certain amount of time has passed. That’ll get their butt in gear.

Projects Tab: “Projects” used to only be a thing in the Time Tracker system. Now you can create a project page where your employees or contractors can all talk and contribute to/update the project details and components. Based on the emails I’ve received, it looks like a Facebook page for your team.

Time TrackingThe Time Tracker software also got a major redesign. It’s so colorful! It’s color-coded to help out people who work with teams. Each team member is designated a color, and then that color appears in the log when that member works on the project and uploads their time.

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.

When I get switched over (and they assure me it won’t be too much longer) and I’ve had time to test out some of these new features for myself, I will come back and update this post to let you know just what I think. I’ll also provide some side-by-side screenshots of my invoices before and after.

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.

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% 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.

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