QuickBooks Online vs FreshBooks: Which Fits a Service Business?

What each one is

FreshBooks is cloud accounting software. Cloud means you log in through a web browser instead of installing software on one computer. FreshBooks is built around a service business. A service business sells your time and your work to clients. So FreshBooks is strong at invoicing, time tracking and client billing.

QuickBooks Online is also cloud accounting software. The difference is scope. QuickBooks Online is built for a wider range of businesses, including ones that sell products, hold inventory, or run more than one location. It has more plans and a much larger app marketplace.

The real choice is about what you sell. If you bill clients for your time, FreshBooks is built for that. If you also sell products, run a team, or want room to grow into more tools, QuickBooks Online gives you more space.

How FreshBooks is built

FreshBooks has plans named Lite, Plus, Premium and Select. The plans are organized around how many billable clients you have. A billable client is a client you send invoices to or track time for. So you pick a plan by the number of clients you bill, not by the number of people who log in.

Where FreshBooks shines is the client side. Invoicing, time tracking and client billing are the core. Invoicing means you send a bill to a client for what they owe. Time tracking means you log the hours you worked, so you can bill for them. Client billing means you track who paid and who still owes you.

The limits move with the plan. A smaller plan caps the number of billable clients. A larger plan adds more clients and more tools. Check FreshBooks' own pricing page for the current limits, because plans and limits change over time.

For a solo service business, a designer, a consultant, a coach, FreshBooks can feel built for you. The screens are organized around the client, and the day to day work of billing time shows up front.

How QuickBooks Online is built

QuickBooks Online has four plans named Simple Start, Essentials, Plus and Advanced. The number of paid users grows by plan, roughly 1, 3, 5 and 25. So if more than one person needs to log in, you move up a plan.

Bill management and time tracking start at Essentials. Inventory, purchase orders, class and location tracking, and project profit are on Plus and Advanced. Advanced adds more users, custom roles and analytics. The tools you get depend on the plan you pick.

It also has a very large app marketplace. If you use other software in your business, there is a good chance it connects. Many bookkeepers and CPAs already know it, which makes the year end handoff smoother. When your CPA knows the system, you answer fewer questions about where a number came from.

Plan names, limits and prices change often. Check Intuit's own pricing page before you choose. We never state prices here, because they move.

FreshBooks vs QuickBooks Online side by side

A made up example for teaching

How we do it

We are QuickBooks Online Accountants (QBOA), so we work in the accountant side of QuickBooks Online every day. We work in Xero too. We do not work inside FreshBooks.

We work inside your QuickBooks Online or Xero file. You do not have to switch. If you already use one of them, we log in there and do the work. If you are on FreshBooks and you want help that needs more room, we help you move to QuickBooks Online or Xero. A move needs planning, and we clean the books first so errors do not move to the new system.

We start with clean and reconciled books. That means we reconcile every account and sort every transaction before we move forward. Reconcile means to match your software balance to your bank balance and explain every cent of the difference.

Then we close each month by the 10th. We categorize and reconcile in the first week. We send you one list of questions on day 8. We lock the period on day 10 and send your reports. The monthly routine matters more than the brand. Reconciled accounts, the same categories every time, and a month end close are what make the books trustworthy.

Mistakes we fix

• Picking a tool for invoicing alone, then doing the rest of the books by hand.
• Switching systems to escape messy books, then carrying the same errors into the new file.
• Leaving bank feeds disconnected, so transactions stop flowing and the month falls behind.
• Using too many categories, so the reports stop being useful.
• Tracking income and expenses in two systems that never talk to each other.

What we do

We do monthly bookkeeping, and only bookkeeping. We work in QuickBooks Online or Xero, we close your books by the 10th, and we hand clean reports to your CPA at year end. Book a free 20 minute call and we will help you pick the system that fits your business.

Questions people ask

Is FreshBooks good for a service business? Yes. Invoicing, time tracking and client billing are the core, and the plans are organized by the number of billable clients. If you bill clients for your time, FreshBooks is built for that.

Do I have to switch to work with you? We work in QuickBooks Online and Xero. If you are on FreshBooks and you want help that needs more room, we help you move. If you have no software yet, we help you set one up.

Can FreshBooks do inventory? Limited. If you sell products on a shelf, hold stock, or want profit by location, QuickBooks Online on the Plus plan or higher is a better fit.

Will moving fix my messy books? No. A move needs planning, and you should clean the books first so errors do not carry into the new file. If your current tool works and the books are clean, moving rarely helps on its own.