FreshBooks — Independent Software Review

Invoice and Accounting Software for Small Businesses

Compliance Transparency Index

Grade: B — Score: 83/100

Best For

• Solo freelancers and service-based self-employed professionals who invoice by the hour and need time-entry to invoice conversion.
• Small agencies on Plus or Premium that want double-entry books, automated recurring invoices, and proposals without hiring a bookkeeper.
• US service businesses with 1-10 employees that want payroll, invoicing, and AP in one account rather than stitching Gusto to QuickBooks.
• Businesses switching from spreadsheets or an older tool that can use the Easy Switch migration service on Select.

Not Ideal For

• Product-based businesses that need inventory management. FreshBooks does not offer inventory tracking or cost of goods sold. Xero Established or QuickBooks Online Plus fit better.
• Companies above 50 billable clients on a budget. You are forced onto Premium at $70/mo or Select with custom pricing, which is steep compared to Xero's unlimited-invoice Growing plan at $55/mo.
• Buyers requiring a SOC 2 report. FreshBooks publishes PCI DSS Level 1 attestation but does not advertise SOC 2 Type II, which is a blocker in enterprise procurement.
• Teams needing native SSO. FreshBooks does not support SAML single sign-on, so identity providers like Okta or Azure AD cannot enforce access centrally.

Operational Overview

Pricing Structure

Lite: $23.00/mo (billed monthly)

• 5 billable clients
• Unlimited customized invoices and estimates
• Unlimited time-tracking and expense tracking
• Card, ACH, Apple Pay, Google Pay, Affirm, Afterpay payments
• Tax-time reports

Plus: $43.00/mo (billed monthly)

• 50 billable clients
• Everything in Lite
• Double-entry accounting reports and bank reconciliation
• Automated recurring invoices, late fees, and payment reminders
• Proposals and client retainers
• Accountant access and expense receipt data capture

Premium: $70.00/mo (billed monthly)

• Unlimited billable clients
• Everything in Plus
• Bill receipt scanning with multi-line item capture
• Accounts payable and project profitability
• Lower credit card and capped ACH transaction fees
• Customizable email templates and FreshBooks branding removed

Select: Custom pricing (contact sales)

• Everything in Premium
• 2 team member seats included
• Advanced Payments included (normally $20/mo)
• Easy Switch data migration and custom onboarding
• Dedicated phone support

Alternative Consideration

Consider switching to QuickBooks: QuickBooks offers more advanced accounting features suitable for larger businesses.

Frequently Asked Questions

How does FreshBooks compare to QuickBooks Online for service-based businesses?

FreshBooks Plus at $43/mo is cheaper than QuickBooks Online Essentials at $75/mo and ships with a tighter time-entry to invoice flow that freelancers and agencies consistently rate higher on G2 and Capterra. QuickBooks Online Plus at $115/mo wins if you need inventory tracking, 5 named users, or a SOC 2 report for enterprise procurement. Intuit's ecosystem is roughly 10x larger, but if you bill by the hour and do not carry stock, FreshBooks fits the job more cleanly.

How does FreshBooks compare to Xero for small businesses with multiple users?

Xero includes unlimited users on every plan, while FreshBooks charges $11/mo per team member on top of the base subscription. That makes Xero Growing at $55/mo cheaper than FreshBooks Plus at $43/mo plus a handful of seats. FreshBooks wins on UI simplicity and time-to-invoice conversion. Xero wins on inventory, multicurrency accounting (not just invoicing), and team size, which is why most reviewers recommend it for product-based or multi-user businesses.

Does FreshBooks work for product-based businesses that carry inventory?

No. FreshBooks tracks basic billable items and reduces stock when an invoice is sent, but it does not support reorder points, cost of goods sold, warehouse management, or serial numbers. Reviewers on Capterra, G2, and Merchant Maverick consistently flag this as the single largest feature gap. If you sell physical products, QuickBooks Online Plus at $115/mo or Xero Established at $90/mo are the standard alternatives.

What are the transaction fees when using FreshBooks Payments?

FreshBooks Payments is powered by Stripe and charges 2.9% + $0.30 per transaction for standard credit and debit cards and 3.5% + $0.30 for American Express. ACH bank transfers cost 1% per transaction for US customers. Premium and Select plans get access to lower credit card transaction fees and capped ACH fees, which is the main reason a high-volume business would upgrade past Plus.

Does FreshBooks handle multi-currency invoicing and international clients?

Yes for invoicing. FreshBooks supports 25 currencies and lets you set a default currency per client, so every invoice, estimate, and proposal for that client renders in the chosen currency. The limitation accountants flag is that consolidated P&L and balance sheet reporting do not fully convert across currencies, so multi-currency accounting is weaker than in Xero Established. If you bill international clients but keep one reporting currency, FreshBooks is fine.

Does FreshBooks include payroll or do I need Gusto?

FreshBooks offers its own US payroll add-on at $40/mo plus $6/mo per employee, which runs pay runs, tax calculations, and filings inside the same account. Gusto is also available as a native integration, which is typically the better choice if you already run Gusto or need payroll outside the US. For a brand-new US business, FreshBooks Payroll is simpler because there is nothing to connect or reconcile across two systems.

How do the FreshBooks client limits work across Lite, Plus, and Premium?

A billable client is anyone you invoice in a given period, not a one-off contact. Lite caps you at 5 billable clients for $23/mo, Plus at 50 for $43/mo, and Premium and Select give you unlimited clients. There is no cap on invoices per client, so a retainer with 5 repeat clients on Lite can still generate unlimited monthly invoices. Cross the 5 or 50 thresholds and FreshBooks will prompt you to upgrade.

Does FreshBooks offer bank reconciliation and double-entry accounting?

Yes, but only on Plus at $43/mo and above. Lite gives you expense tracking and tax-time reports but no double-entry ledger and no bank reconciliation. Plus adds double-entry accounting reports, bank reconciliation, and accountant access. Premium adds bill receipt scanning with multi-line capture and accounts payable. If you need formal books that an accountant can close, skip Lite and start at Plus.

How do I migrate from QuickBooks or a spreadsheet to FreshBooks?

FreshBooks offers Easy Switch, a data migration service that moves clients, invoices, expenses, and historical transactions from your current system. It is included on the Select plan with custom onboarding, and available as an assisted service on Premium. For Lite and Plus users on a tight budget, manual CSV import covers clients and a trial balance, which most freelancers can finish in an afternoon. Plan for a one-to-two week reconciliation window regardless of method.

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