One of the necessary evils of owning a business of any size is managing your books. Accounting and Finance may not be the most exciting tasks to manage, but it needs to be done. Two platforms, FreshBooks and QuickBooks, make keeping track of your finances easier – especially if you’re an SMB with limited resources.
FreshBooks is a cloud-based accounting and financial solution that focuses on making this process as automated as possible. It allows for invoices to be created and customized, provides for online payments, and you can add customized due dates, payment reminders, and more.
QuickBooks has long been the standard accounting and finance software that is used by individuals and small businesses. Their software was one of the first models to use real-life forms for data entry. It syncs with multiple payment process platforms and creates reports that are useful for tax reporting, profit-and-loss data, and other specific metrics.
In the FreshBooks vs QuickBooks debate, the primary difference is one of purpose. FreshBooks looks to manage your accounts payable and receivable with better speed, accuracy, and automation. QuickBooks offers tracking functions, customized worksheets, and database support.
Here are the other key differences which are worth considering.
1. Labor Tracking
FreshBooks offers time-tracking features that make it possible to track billable hours as a separate budget line when looking at project expenses. This makes it easier to determine how independent contractor or employee costs are affecting the bottom line. It offers a dashboard view and a project view so these hours can be quickly seen and evaluated, allowing productivity to be a beneficial metric to be tracked.
QuickBooks offers a feature that allows for employee payroll to be tracked. To create a similar outcome, it becomes necessary to take the final payroll figures and then bill it as an expense through the categorization of that labor as a “product” budget line. Because of these added steps, many find it easier to use a third-party system of billable hours, such as TSheets or an Excel spreadsheet.
Both platforms allow for customized invoicing to occur and click-to pay features that allow recipients to pay directly from the invoice once received.
FreshBooks pulls the data directly from its “billable hours” feature. The figures are automatically entered into the invoice so that a final amount due is obtained. Additional line-items can be added as needed to create an accurate invoice. Emails about past-due invoices or other AR/AP concerns are also conducted through the invoicing dashboard.
QuickBooks will auto-populate billable hours from third-party systems that are synced to the platform. There is more control offered over the final design of the invoice as well, allowing brands to create optics that are reflective of their overall brand imagery within the invoice with greater simplicity.
Although many reviews note that FreshBooks does not offer an inventory tracking system, it does offer a basic process that can be used. When you go into the “Invoices” section of this platform, you can choose the items menu option. Once there, you can edit the item, let the platform know it is in inventory, and then enter the amount you have. Every time you invoice an item, FreshBooks will then deduct it from the amount entered.
QuickBooks allows you to control current and future inventory output. The inventory tracking features are directly connected to the accounting components of the platform, making it possible to make future orders based on current inventory levels. It is also possible to enter the payments made to inventory suppliers and track current inventories as well.
4. Expense Tracking
FreshBooks allows users to connect their bank accounts and credit cards to the platform. This eliminates the need for manual entry of line-item expenses. You can scan receipts or take a picture of it and then log it into the platform and attach the file with the notation. It will also provide sales tax management and project time tracking.
QuickBooks does require more manual entry logs when tracking expenses. It is designed to show line-item expenses, which makes it easier to see what your current profit margins happen to be. You can track credits and expenses simultaneously while still offering invoicing and payment collection simultaneously.
5. General Accounting
FreshBooks is designed to be simple and intuitive. Its design is based on easy invoicing and tracking expenses so you can see how profitable you happen to be at any given moment. You see when invoices have been paid and which ones are overdue. You can balance both sides of your books, but with its current design, it is a manual process.
FreshBooks integrates with numerous apps, such as Shopify or Stripe, so that the data you might be collecting already can be formatted into accounting and finance information that is easier to understand or use.
QuickBooks offers double-entry accounting processes so that your sheets can stay balanced. This makes it easier to keep your cash flow organized, but there is a learning curve to the number of features that are offered. Instead of balancing both sides of your books by hand, which FreshBooks requires, once you learn this platform, you can have it done automatically and then share that data with whomever needs it.
QuickBooks integrates with over 400 different native integrations. This includes tools like PayPal that may be running orders or transactions for you in real-time.
FreshBooks stays focused on letting you know what your profit margins happen to be. From your dashboard, you’ll always see your input and output data. The reports stay focused on payment collections and how that translates into tax responsibilities. You can build more specified reports by employing certain filters so you can always know what your financial picture looks like.
QuickBooks offers most of the reports that businesses need when releasing their accounting information. The reports can be ultra-specific so that the fine details of your data can be analyzed as needed. You can run your profit margin reports or see the current state of your invoicing, along with the current state of your inventory, what your expenses and purchases happen to be, and access to sales tax reporting.
Which is Better: FreshBooks vs QuickBooks?
FreshBooks is a solid option for individuals or businesses who need to track billable hours, have invoicing responsibilities, and need to generate specific reports for income verification or reporting.
QuickBooks is a solid option for freelancers and SMBs who need a well-rounded accounting platform that can self-manage the data you’re collecting and report it in a way that makes sense. It is designed more for those who sell products rather than services, but the customized invoicing options can accommodate both.
By comparing your needs to what these platforms can provide, you’ll be able to determine which accounting and finance option can work the best for you.