FreshBooks Alternativesfor Cloud Accounting
17 July 2017
If you run a small business and you need to buy accounting software, you may have come across FreshBooks during your research. A great feature of this software is that you don’t have to install it on your computer. This accounting package is available online. That means that you can access it from anywhere — not just on your office computer.
You might be tempted to jump in and sign up for FreshBooks right now. However, before you commit, take a look at our run down of FreshBooks alternatives.
Cloud-based Accounting Solutions Explained
You have probably used online utilities, such as grammar checkers or virus scans. These programs seem to be on your computer. However, they run on computers that are far away and you access them over the Internet through your browser. These are cloud-based services because both the storage and execution of programs occur remotely.
Cloud-based accounting solutions take those familiar productivity programs that you run on your computer up to another level. Rather than just spreadsheets and word processors, these utilities tie in other capabilities that help you run your business.
What is FreshBooks?
Big multi-national corporations use complicated suites of programs, called ERPs, to automatically generate all of their accounts from operational data. FreshBooks is a version of this type of system that caters for small businesses.
FreshBooks is not the only cloud-based accounting solution out there for small businesses. In this article, you are going to read about the capabilities of FreshBooks and also five other cloud-based solutions that do roughly the same work. For another perspective, you could also read through an article on Quickbooks Alternatives.
Why do we choose FreshBooks Plus Plan for price comparison?
FreshBooks offers a range of plans, and so do the other cloud-based systems that you will read about in this review. In order to get a fair comparison, this report will just focus on the FreshBooks Plus plan and equivalent packages available elsewhere. This plan is the most frequently subscribed to at FreshBooks because its allowance of 50 active clients suits a larger number of small businesses. The company’s cheapest plan allows five active clients, which may be too small for many. The FreshBooks Premium plan includes an allowance of 500 customers, which would be suitable for a mid-sized enterprise.
Send unlimited number of invoices
Accept online payments
Import expenses details from bank
FreshBooks Plus Plan
Create and send unlimited number of invoices
Encrypted data back-ups
Compatible with more than 300 cloud apps
Small Business Essentials
Generate and send invoices using really beautiful interface
Easily manage inventory and purchases
Xero Standard Plan
Mobile POS system
SAP Anywhere Starter Plan
Accept online payments
Generate and send invoices
Automatically compiles accounts
Automates bank reconciliation
Zoho Books Basic
FreshBooks Alternatives Reviewed
FreshBooks vs Quickbooks
The desktop version of Quickbooks is widely used by accountants. FreshBooks lists the ability to export reports in Quickbooks format as one of its features. Using the same accounting software as your accountant simplifies data exchange. You can even give your accountant online access to your cloud-stored data to get your accounts compiled faster.
The Small Business Essentials package of Quickbooks closely matches the capabilities of FreshBooks. You can send out digital invoices and track payments with this service. Like FreshBooks, you can accept online payments with PayPal with Quickbooks. Another good match between the facilities of these two online accounting systems are the bank reconciliation procedures that both operate. You can connect your bank account to your Quickbooks service and get live feeds on your payments to appear directly in the app. FreshBooks focuses on invoicing.
Quickbooks has other service plans, which gives you the option to upgrade your account and get more cloud-based facilities. The extra services that you can add on later include inventory and purchasing management. Getting both your AP and AR together in one place opens up the possibility of fully compiling your accounts from transaction data, just like the big corporations do with ERPs.
FreshBooks vs Xero
At $30, the Xero Standard plan is more expensive than the $25 FreshBooks Plus plan. However, you get a lot more facilities with Xero and a lot more interoperability. FreshBooks allows you to compile invoices. Part of that process involves time tracking for employees that have a charge-out rate. The app allows you to accept online payments and keeps track of overdue accounts. You can also import bank statements into FreshBooks. That just about covers all of the functions of the FreshBooks system.
Xero is a fully-integrated accounting package that will compile your books from your operational data. When you issue an invoice with Xero, the information from that document automatically flows through to your sales ledger and GL. Xero also has a purchase ledger module, which FreshBooks lacks. With both AP and AR covered, Xero can get outgoings logged as well as income.
FreshBooks integrates seamlessly with other resources, such as PayPal, Shopify, and ZenDesk, and so does Xero. However, Xero has a list of more than 500 other apps with which it can exchange data.
The Xero website has a wealth of information and guides. These cover accounting topics and they also include tips for new entrepreneurs on how to run a business. In short, FreshBooks is an invoicing app and Xero is a business management system.
FreshBooks vs SAP Anywhere
SAP caters to the big corporations and SAP Anywhere seems to be the company’s effort to cater to the little guy. Its pricing plans don’t really suit the small business market. The headline rate of $534 per month for the cheapest plan with SAP Anywhere doesn’t tell the whole story — they also expect a one-time payment of $1,098 to open up an account.
Small business cloud services, such as FreshBooks are suited to owner-operated enterprises where the owner is also likely to be the key worker in the business. SAP Anywhere has a lot of big-business utilities that a busy entrepreneur would never have the time to learn or operate.
FreshBooks and SAP Anywhere are simply not in the same league. A start-up that can get by on the invoicing and cost management functions of FreshBooks wouldn’t be in the market for the customer support database and inventory management functions of the SAP cloud tool.
SAP Anywhere is a very comprehensive business management tool, which requires a workforce to operate. A small business owner would be better off with a light app, such as FreshBooks and hope to expand the business far enough to need SAP Anywhere some years down the line.
FreshBooks vs Wave Accounting
The Wave invoicing system has a completely different charging structure to that run by FreshBooks. Waveapps seems to be competing with PayPal as a payment processor rather than positioning itself as a business software provider. For this reason, Waveapps doesn’t charge anything for access to its invoicing tool. Instead, it charges a per-transaction fee for payment processing.
FreshBooks allows you to accept online payments by linking through to PayPal. However, you also have to pay the PayPal payment processing fees that are imposed on business accounts. If you have a PayPal account you could just issue invoices from within that system. FreshBooks aims to provide smarter invoices and more comprehensive time tracking, which PayPal lacks.
Wave Accounting approaches its target market from a different direction. It encourages customers to ditch PayPal and use the Wave payment processing system instead. The company attracts customers by offering better invoicing capabilities than PayPal and also includes an optional payroll management system — for a fee. The Waveapps payment processing fees are lower than those charged by PayPal. So, this company offers the same services that the FreshBooks and PayPal combination creates, but at a much lower cost. Its payroll capabilities are extra features that FreshBooks cannot match.
FreshBooks vs Zoho Books
Zoho Books offers a module-based cloud accounting system that allows its customers to add on functionality. The Basic package offered by the company matches the facilities that FreshBooks offers. By adding on modules, you could take your package up to the accounting flow-through capabilities of Xero with both AP and AR populating your general ledger for you. You could then keep going and add on CRM capabilities to end up with a full “bells and whistles” business management system that would compete with the utilities of SAP Anywhere.
As with FreshBooks, you can create and send invoices electronically, accept online payments and track overdue accounts. Zoho Books also has a bank reconciliation feature that works automatically with data feeds from the bank account, just like with FreshBooks. However, the Zoho system allows you to set up processing rules so that each transaction can be automatically filed under different accounting expenses categories.
The timesheet management systems of both Zoho Books and FreshBooks have very similar capabilities. Both packages include receipt scanning and both also have mobile-friendly apps so the busy business owner can track sales while on the move.
The capabilities of these FreshBooks alternatives range from a payment processor with free invoicing software through to full enterprise management systems. FreshBooks provides all of the capabilities that a small business owner needs to send out invoices and collect payments, but then, so does Waveapps.
The monthly price and the high set-up fee of SAP Anywhere probably made you gasp, especially when viewed alongside the much cheaper offers of Zoho Books and Xero, which have almost the same functionality. FreshBooks, Quickbooks, and Xero offer a 30-day free trial, so you have a no-risk opportunity to give each system a spin. Your preference for a specific cloud-based accounting package will depend on the size of your enterprise and the range of utilities that you have time to implement.