When I started my business, I knew I’d need a few software tools to succeed. The first one I sought out was an accounting system, because I knew that wasn’t something I wanted to handle manually—nor was a large enough to warrant my own personal accountant. Happily, I stumbled upon FreshBooks in my search, and it has become one of my most valuable resources as a small business owner.
I was looking for a system that could track my revenue and expenses, track time spent on each project, generate invoices, and help me report on important financial data for my business. FreshBooks offers all that and more – affordably – so below I’ll share some of my favorite features and how I use them.
Manage clients and projects
As someone who bills work hourly, one of my requirements for a system was that it had a time tracking mechanism built in. I know there are many time tracking apps available, but I wanted one that integrated seamlessly with my invoices. FreshBooks does this exceptionally. Here’s how it works:
- You enter your client’s information (business name, contact(s), email, phone number, etc.)
- You create one or more projects under that client. For each project, you create individual tasks, which you can bill at an hourly rate or a flat project rate. You can have multiple projects and tasks for each client.
- When you’re ready to work on a particular billable project, open the timer, select the client, project and task you’re working on, and start the timer. Simply stop the timer when you’re done working for the moment, and log your time. (You can log on from any Internet connection, so it’s easy to track time when you’re on the go as well.)
All your billed time shows in a calendar to help you keep track of your billable hours, plus you can run a quick report to see how much time you’ve worked for a particular client. You can bill at different rates for different clients, or even different projects under the same client, giving you ultimate flexibility.
Invoice with ease
When you’re ready to invoice a client, simply select a date range or choose all unbilled hours, and FreshBooks will build a beautiful invoice that summarizes all the projects and tasks you’ve spent time on. Your client will see the projects and tasks, hours spent, rate and total billed for each line item, as well as a total bill.
Plus, the FreshBooks invoice allows for other fantastic features, including:
- Customization with your logo and colors
- The ability to discount a project or entire bill (if, for example, you offered 20% for your client’s first project with you, but you want to show them the full price as well).
- A notes section to add terms of payment or other notes
- The ability to bill clients for appropriate expenses (see section below)
- The ability to email the invoice directly to clients, or save as a PDF and print
- The ability to accept credit card payment via email for quick and easy payment
Manage expenses automatically
Before I left my corporate job and took my business full-time, I did freelance work for several years on the side. During that time, my needs were smaller, so I managed most of my finances, expenses and invoicing manually. For my expenses, for example, I kept a simple spreadsheet of all my expenses, including the date, expense description and cost.
Now, as a small business owner working in a home office with minimal expenses, that isn’t the hugest burden, but anything you can do to automate menial tasks is a win. One of the coolest things about FreshBooks is that you can connect your business bank account, and track expenses automatically. The system pulls in any transaction from the account you connect, and even attempts to categorize the expense for you.
From there, you can delete it (if it’s not a relevant expense, such as a transfer to another account), or edit it to note what the expense is or categorize it correctly for tax time. You can also assign an expense to a client, and later pull that expense into their next invoice to bill them appropriately.
I spend less than 5 minutes a month checking in on the expenses that automatically record from my business bank account, and from there I can generate beautiful reports showing expenses over time, matched against my revenue.
My verdict: Essential for business owners
FreshBooks had made running my business extremely smooth from an accounting standpoint, and at $19.99 per month, it is more than worth it to me. Come tax time, I can easily run profit and loss report to view my net income for the year. If I’m budgeting for the month or quarter, I can see unbilled hours, paid and unpaid invoices, and recent expenses, to get a snapshot of money coming in and going out. Clients love the well-organized invoices, and that I’m tracking my time down to the minute to get them the most value for their money.
I’d love to hear your thoughts as well. Anyone else who loves FreshBooks? Are there other great systems out there that deserve a shout out? Share your thoughts below.