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QuickBooks vs FreshBooks

This article examines QuickBooks vs FreshBooks by concentrating on the main features that accounting software should offer. The data has been collected from QuickBooks’s and FreshBooks’s websites and help articles. We also checked their reviews at Capterra to find the aspects that the actual users are emphasising. 

Review

In Capterra, QuickBooks has a rating of 4.3, with the highest score for Ease of Use. 

Trustpilot introduces QuickBooks as an Excellent tool with a 4.6 TrustScore.

In Capterra, FreshBooks has a rating of 4.5, with the highest score for Ease of Use. 

Trustpilot introduces FreshBooks as an Average tool with a 3.3 TrustScore.

Bookkeeping

Banking

You can connect QuickBooks to your bank accounts, credit cards, PayPal, Square, etc., and QuickBooks’s bookkeeping software will automatically import your transactions.

Automate Data Entry

With QuickBooks, you’ll be able to automate tasks such as entering transactions, performing calculations, and organising your data.

Live Bookkeepers

QuickBooks offers a certified bookkeeper with an extra fee (starting at 200$/month). The virtual bookkeeper will help you with your accounting by:

  • Updating your existing financials
  • Giving personalised insights on your profit and loss report and balance sheet
  • Categorising transactions
  • Reconciling accounts

Automated Bank Reconciliation

Bank Reconciliation involves the comparison between your financial records and the bank transactions you’ve imported. It identifies any inconsistencies that require correction.

Additionally, you have the ability to instantly generate a concise report summarising these findings and export it to Excel.

Online Accountant

FreshBooks and Mazuma collaborate to guarantee the accuracy of your financial records. While FreshBooks monitors each incoming monetary unit, Mazuma takes charge of your monthly financial statements, submissions to HMRC and Companies House, payroll management, and VAT returns. Mazuma provides you with a direct link to an online accountant who guides you through every phase of the process.

Payment

Mobile Payment

  • GoPayment app
  • Mobile card reader

ACH and eChecks Payments

A secure connection between your bank and QuickBooks allows you to send ACH payments and eChecks electronically.

Fast Deposits

  • QuickBooks enables you to create a Payments account and receive eligible payments the next business day.
  • When eligible, QuickBooks allows you to move payments into your bank account instantly for an additional 1% charge.

 

QuickBooks Checking Business Bank Account

  • It is free to open.
  • Accounts are not subject to monthly fees or minimum balances.
  • Instant deposit is available without an additional fee, if eligible.
  • You can save for expenses with envelopes and earn 1.25% APY (Annual Percentage Yield).
  • Insights and projections regarding cash flow are available.
  • You can have seamless integration with QuickBooks Payments and QuickBooks Payroll.
  • You can use ACH transfers for no additional fee.
  • You can withdraw funds at over 19,000 AllPoint ATMs.
  • You can use QuickBooks to pay bills.
  • You can get a free premium debit card with your company name.
  • A maximum of $250,000 is insured by the FDIC.

Payment Links

You can request funds from multiple customers at once by sending payment links through text or email.

FreshBooks Payments (WePay)

FreshBooks Payments Powered by WePay allows businesses in Canada and the US to receive online payments in USD or CAD with credit cards and bank transfers (ACH).

Transaction fees for businesses in the United States:

  • Bank Transfer (ACH): 1% (caps available for Select)

Transaction fees for businesses in Canada and the United States:

  • Visa credit, MasterCard, debit, discover credit, and prepaid cards: 2.9% + $0.30
  • American Express credit and prepaid debit cards: 3.5% + $0.30

Barclaycard

Barclaycard is a payment gateway that allows businesses in the UK to receive online payments in GBP with credit and debit cards by Barclays via SmartPay Fuse.

Transaction fees:

  • Consumer Cards: 1% + 15p for per transaction
  • Commercial Cards: 1.9% + 15p per transaction
  • International Cards: 2.9% + 10p per transaction

PayPal 

PayPal allows you to receive online payments in several currencies with PayPal balances, as well as credit and debit cards. You can find the list of PayPal transaction fees here.

Stripe

Stripe and FreshBooks Payments Powered by Stripe allow you to receive online payments in several currencies with credit cards including Apple Pay, and bank transfers (ACH).

Stripe also supports Pre-Authorised Debit (PAD) for Canadian businesses, BACS Direct Debit for UK businesses and SEPA Direct Debit for European businesses.

You can find the list of Stripe transaction fees here.

Invoicing

Personalise Invoices

You can create custom templates and make tailored invoices by adding your logo and colours.

Add Billable Hours

Using QuickBooks Time and Google Calendar, you can automatically add billable hours to invoices.

Receive Real-Time Alerts

Using the mobile app, you can send invoices, know when they are viewed, and get notified when they are paid.

FreshBooks’ invoice generator helps you create an invoice, customise it, incorporate your logo, and personalise your thank you email. It also enables you to request a deposit on your invoice.

Here are other invoicing features of FreshBooks:

  • Add invoice due dates.
  • Customise invoice payment terms.
  • Offer discounts.
  • Automatically calculate taxes.
  • Preview invoices before sending.
  • Choose your preferred currency.
  • Receive instant updates when an invoice has been viewed and paid.
  • Get invoices from anywhere with the mobile app.
  • Automatically track inventory billed on invoices.

Reporting

Your QuickBooks dashboard gives you a holistic view of your business, including income statements and balance sheets. With a cash flow statement, you can see your income and expenses.

Your business goals can be met by creating a customised spending road map. You can also provide financial statements to investors in order to approve you for a loan.

This list of reports in QuickBooks is as follows:

  • Profit and loss summary
  • Balance sheet summary
  • Open sales orders
  • Pending sales
  • Aged payables summary
  • Aged receivables summary
  • Sales by customer summary
  • Sales by representative summary
  • Open purchase orders
  • Expenses by vendor summary
  • Outstanding checks report

FreshBooks employs dashboard and other kinds of reporting, such as:

  • Colour-coded breakdown of spending
  • Summary of most recent activity
  • VAT return report
  • Profit and loss report
  • Sales tax summary report
  • Accounts ageing report
  • Payments collected report
  • Accounting reports (general ledger, trial balance, chart of accounts)
  • Expense report
  • Invoice details report
  • Report filtering by client, team member, or date
  • Saving, exporting, or printing of financial reports for your accountant
  • Time tracking and project profitability reports

Tax Management

QuickBooks handles sales tax calculations automatically when you add them to an invoice. They calculate the tax rate based on date, location, type of product, and customer.

According to the product category and location of sale you specify, QuickBooks will apply the correct rate to your transactions. Tax categories are automatically sorted based on receipt photos.

The Sales Tax Liability Report lets you see your sales tax information at any time and keep you up-to-date on your taxable and nontaxable sales.

FreshBooks efficiently reduces the time and financial investment of tax professionals through its cloud-based accounting software.

The following capabilities catering to tax preparers are accessible across all subscription plans:

  • Timer to track billable hours.
  • Automatically import expenses.
  • Customisable invoices you can send online.
  • Estimate templates to win new clients.
  • Securely accept credit cards.
  • Simple dashboards to monitor your business at a glance.
  • Financial reports.
  • Project budgets to keep spending on track.

Inventory Management

QuickBooks’s inventory management updates your quantities automatically and helps you make sure you’re not under or overstocking.

It sends low-stock alerts to notify you when it’s time to reorder inventory. To ensure paying the vendors on time, QuickBooks converts the purchase order (PO) into a bill.

The inventory tracking feature in FreshBooks enables you to add, modify, and assess inventory related to items that can be billed in your account.

By including inventory information in FreshBooks items, you will receive notifications for item shortages.

If you’re already monitoring your inventory through platforms like Shopify, Squarespace, BarCloud, or 2Ship, you can import your data into FreshBooks using the specific integration provided by each of these platforms.

Pay Bills

With QuickBooks:

  • You can see at a glance what you owe, when, and to who on the bills dashboard.
  • Your payments will be imported and matched to the invoices of your vendors once you connect your bank or business accounts (such as Apple Pay® or PayPal).
  • You can pay what you owe, and QuickBooks automatically tracks any remaining debt and when it’s due.
  • Bills can be paid via bank transfer for free or via debit card (2.9% fee).
  • You can pay multiple vendors with a paper check or a direct deposit at once.
  • You can manage your expenses efficiently by scheduling payments in advance.

FreshBooks offers an accounts payable function designed to streamline organising your bills, consolidating all your bills into a single, user-friendly location. With this feature, you can easily monitor the due dates, purposes, and amounts of your bills.

Payroll

There are three QuickBooks Payroll plans:

Core: You can easily pay your team and have payroll taxes taken care of.

Premium: Using powerful tools and services, you can manage your team and achieve the perfect payday.

Elite: On-demand experts simplify payday and protect your most important assets.

You can share valuable insights with your accountant by customising, running, printing, or exporting payroll reports.

The payroll reports include information about the following:

  • Multiple workplaces
  • Payroll deductions and contributions
  • Payroll tax liabilities
  • Payroll tax and wage summaries
  • Time activities
  • Vacation and sick leaves
  • Workers’ compensation

FreshBooks integrates with some payroll service providers, including Gusto, a user-friendly payroll solution designed for small enterprises. 

FreshBooks ensures that all payroll transactions are effortlessly imported into your account, registering them as expenses.

In addition to tax calculations, Gusto takes the extra step of automatically submitting these tax filings to the appropriate governmental bodies whenever you process payroll.

Mobile App

QuickBooks’s Mobile App can be used to enter transactions, record expenses, invoice customers, and send reports from anywhere. Data is automatically backed up and synced between all your devices with QuickBooks.

All the features of QuickBooks’s Simple Start plan are available through the Mobile App. However, additional features offered in Essentials, Plus, and Advanced plans are only available on the web.

FreshBooks mobile app enables you to:

  • Respond to your clients’ questions and feedback.
  • Know instantly when a client has viewed their invoice.
  • Know when an invoice has become overdue.
  • Create and send professional invoices.
  • Snap pictures of receipts.
  • Stay on top of important updates.
  • Track mileage for tax deductions.

Pricing

QuickBooks has four pricing plans: Simple Start, Essentials, Plus, and Advanced. The monthly subscription fee is $15 for the Simple Start plan, $27.5 for the Essentials plan, $42.5 for the Plus plan, and $100 for the Advanced plan.

The Simple Start plan allows only one user and one accountant, but you can use tax deductions in all pricing plans. Bill management is available in the Essentials plan, and inventory management can only be accessed in the Plus and Advanced plans. 

FreshBooks has four pricing plans: Lite, Plus, Premium, and Select. The monthly subscription fee is £9.60 for the Lite plan, £17.60 for the Plus plan, and £28 for the Premium plan. The Select plan offers optimised pricing tailored to your business needs.

FreshBooks gives a 10% discount for yearly subscriptions.

QuickBooks vs FreshBooks: Which Accounting Software to Choose?

QuickBooks is a well-developed accounting tool that has dominated the US market. It offers a wide variety of reporting customisations and transaction tagging, which makes it an industry leader. Despite QuickBooks’s limited number of users, all its plans support unlimited invoices. This tool helps businesses stay organised, set goals, and predict trends, which makes it an excellent option for owners who want to grow their operations.

FreshBooks is a user-friendly accounting solution designed primarily for small businesses and freelancers. It offers a simplified approach to accounting with easy-to-use features for creating professional-looking invoices and tracking expenses. FreshBooks excels in invoicing and time-tracking capabilities, making it an ideal choice for service-based businesses. However, it does have limitations when it comes to the number of users. So, it might not be suitable for larger businesses or those with extensive collaboration needs.

We are committed to ensuring that all our comparison articles are factually entirely correct and accurate. If you have spotted anything that you feel is wrong or misleading in this article, we’d appreciate hearing from you.

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