Which is the Best Bookkeeping Software for Small Business?
There is no shortage of bookkeeping software solutions for small businesses. The availability of so many choices, in fact, overcomplicates the decision-making process. The first step, however, is to identify your business needs and then compare them with the features offered by each software program.
The two most popular bookkeeping software in the market include QuickBooks and FreshBooks. Small business owners are often confused among the two, but this article provides a meaningful comparison, thereby allowing you to make the right choice. Keep reading and you will have a complete idea of the two platforms by the end of this article.
Many business owners consider QuickBooks and FreshBooks to be substitutes for each other. However, this is in reality a common misconception. While there are some overlapping features, both software programs are designed for different purposes. QuickBooks is a full-fledged accounting software that works best for companies selling products, whereas FreshBooks is mainly an invoicing and expense tracking software that works best for freelancers and service businesses. Let’s explore the offerings of each platform in detail to reach a conclusion.
FreshBooks offers comprehensive time tracking capabilities that are helpful for project-based businesses. The employees, as well as the contractors, can track their billable hours and this data can easily be included in the invoice. In fact, time tracking is one of the main features marketed by FreshBooks that differentiates it from other bookkeeping software.
QuickBooks, on the other hand, offers an add-on feature that can be used to track payroll for the employees. Alternatively, this time has to be entered manually in the bill, which is not as efficient as FreshBooks. You can also use time tracking apps such as Google Calendar to include billable hours in the QuickBooks invoices.
FreshBooks did not have a built-in inventory tracking feature as it was designed as an invoicing and time tracking software. While a basic inventory tracking feature has recently been added, it is not too comprehensive or customizable.
QuickBooks, being a full accounting software, includes a complete inventory management tool, which can be used by businesses in the retail or manufacturing industries. You can add new inventory items, mark them as trackable or non-trackable and run reports to view key inventory insights. The inventory management tool, however, is only available in the QuickBooks Online Plus Subscription.
FreshBooks allows you to create customizable invoices and include a click-to-pay button in the invoices. It also allows you to include billable time on the invoice and other additional items such as late fees, deposits and retainers.
The QuickBooks invoicing functionality is more or less similar to FreshBooks. You can create unlimited as well as recurring invoices and include a ‘Pay Now’ button in the invoice. However, it slightly lags behind FreshBooks in terms of ease of including the billable time. Users normally rate QuickBooks invoicing feature slightly difficult to use, especially in the beginning.
You can integrate third-party apps with FreshBooks. FreshBooks currently offers the option of integrating more than 70 apps into the platform.
QuickBooks clearly outperforms FreshBooks in terms of the option to integrate apps. You can integrate more than 650 popular business apps with QuickBooks. Therefore, if you use a number of external platforms and want to automate the bookkeeping process, QuickBooks should be your first choice.
FreshBooks allows you to run a number of reports related to profit margins, payment collection and taxation amongst others. However, a head-to-head comparison reveals that the range of reports is fairly limited.
QuickBooks offers dozens of standard and customizable reports centered not only around bookkeeping but the entire accounting process. Each group of reports includes sub-categories that you can drill down to in order to have an in-depth insight. If you need a lot of reports for decision-making, QuickBooks should be your default choice
FreshBooks is renowned for offering quick and excellent customer support. It has, in the past, marketed how it outperforms its main competitor QuickBooks in terms of customer support.
While QuickBooks has published thousands of blogs and hundreds of training videos to help customers navigate around the platform, it has received more complaints in relation to delayed customer support. However, this could be due to its popularity and a relatively larger customer base.
By default, FreshBooks has been designed for business owners, non-accountants and freelancers. This means it does not use accounting jargon, complicated accounting rules and the need to record double entries.
QuickBooks has been designed primarily for accountants. While there is an option for switching to business view from accountant view, the maximum benefits of the platform can only be extracted by specialized bookkeepers. While learning the platform can be daunting in the beginning, it definitely brings long-term benefits.
Having analyzed the key differences between the two bookkeeping software programs, we can now reach a conclusion about when to choose QuickBooks and when to go for FreshBooks
When to Choose QuickBooks?
You should select QuickBooks if you sell products and need a comprehensive inventory management tool. Since QuickBooks is a complete accounting solution, you may want to choose it in case you want to keep all of your features on a single platform. Having a dedicated bookkeeper who knows who to operate QuickBooks can also be a decisive factor. Finally, you should choose QuickBooks if you have a mid-sized or large business, or a small business that is growing rapidly. This is because FreshBooks may fail short of fulfilling all of your needs beyond a certain stage.
When to Choose FreshBooks?
FreshBooks is recommended for freelancers and other businesses operating in the service industry. You can use its superior time tracking feature to manage your projects and directly include this time in the invoice. FreshBooks is also rated to be more user-friendly and is ranked better in terms of customer support. If you have started a new business and wish to use software for invoicing and expense tracking that does not use too much of accounting jargon, FreshBooks should be your first choice.