Can Freshbooks replace the need for Accounting Software?

tinkugal · Jun 2/2008 8:48 pm

Hi,

I own a small art gallery and thinking about becoming a customer. I was wondering if I could use Freshbooks for invoicing customers and tracking our business expenses and thereby not have to use Quickbooks at all, or is it not really suited for that purpose?

Our accounting is not very complicated as it is a small company and low volume business.

Thanks,
--tinku

iacprofessionals · Jun 3/2008 2:32 am

Tinku,

Freshbooks tracks your invoiced revenue and expenses that you choose to enter.

It does not give you a balance sheet, nor track assets or liabilities, nor have a reconciliation function where you can assure all expenses are entered.

Freshbooks is not a replacement for an accounting system.

However, it is very easy to integrate Freshbooks into your accounting processes.

Thank you,

Heather

Last edited by iacprofessionals (Jun 3/2008 2:32 am)

Fresh Mike · Jun 3/2008 11:20 am

I'm not going to agree entirely with Heather, though what she says is indeed true.

This was my experience when I was running a small professional services design firm:

1) i needed to accurately track my receivables
2) i needed to keep track of all my receipts (expenses) and bank records

At the end of the year i would total up my receivables in FreshBooks (by running a report for the year) then i would dump all put all my expenses in envelopes with categories on them (medial, auto, meals.). [NOTE: this was before i could track these things in FreshBooks, which I can now do.] I would send my revenue number and my expense category totals *to my accountant*. These things were *not be reconciled*, but any deviation would not be too great, and I would have records to back it all up if i was audited at which time I could pay the difference/fine/whatever and it would not be too big a deal (I may have over-payed after all you know!). My accountant was fine with this way of proceeding and would file using the data i sent on my behalf.

The moral of the story is keeping things *very* simple. There a millions and millions of business that DO NOT use accounting software, nor have an accountant (though I would not advise that). Many should have full blown accounting software, but I'm not convinced all need to.

OK Heather...go ahead and tear me a new one

- mike

tinkugal · Jun 3/2008 4:33 pm

Thanks Mike and Heather

I was thinking the same thing as Mike in terms of keeping it simple. My business is a 1-woman shop right now and I was really looking for an easy way to keep track of my revenues and expenses -- QuickBooks seemed like overkill plus it is expensive.

The only part I need to figure out is if I can track what funds I invest in the business myself by categorizing it as a type of revenue?

I will try FreshBooks for a month and see how it goes...

iacprofessionals · Jun 3/2008 5:50 pm

Mike --- Not going to tear into you - but - you are using what is called the Envelope Method and while it is acceptable (and I even explain how to do it in my new book), it is not safe for various reasons but the main one is what happens if your house catches on fire and you lose your receipts or your kid throws them away or your dog eats them?

This may be acceptable for a very small business, but truth be told, in the future if you intend to grow, it may be very very difficult to transfer to a more solid accounting system. Sometimes it is easier to start when you are small and there is less work, then it slowly progresses into something big, rather than trying to convert 3 years down the road.

I would be willing to bet my business that you don't use the envelope accounting method now.

Also - in the US - remember that once you have an income of $300,000.00 your reporting requirements change and you need a whole heck of a lot more data and in different forms (such as inventory, inventory reconciliations, balance sheet reconciliations from opening to year end etc.)

Then of course the last flaw is assuring the person is as meticulous as you Mike. What if they just always forget to record expenses or save receipts, what will they do then? Without reconciliations to check against they would not know.

So in my honest oppinion, unless you are earning a very small amount (less than $3 - $4 a month) you should at bare minimum implement the Spreadsheet Accounting Method and reconcile your bank and credit card accounts. If you are earning less than $3 - $4 a month or refuse to implement an accounting system - then my best suggestion is to enter ALL EXPENSES out of your business checking account and business credit cards into Freshbooks, and then at the end of every month take your statement and look at your Expense List in Freshbooks and check it off on your statement when you see it in Freshbooks (which is called a eye-check reconciliation).

ooo · Jun 3/2008 9:35 pm

If Mr. McDerment is raking in less than $3 - $4 month, then I shudder to think what Mr. Burns salary is.

Fresh Mike · Jun 4/2008 9:07 am

Well...before you go thinking meticulous means something a scatterbrain cannot do, let me tell you some of my little tricks for capturing and filing and sorting all those receipts (because it's a pain):

1) I pay with *everything* electronically (credit card or debit card) - never with case...even parking meters! Why? Because not only will you have a paper receipt, you will have an electronic record.

2) I put every receipt in my wallet and add (in pen) a label to the top (ie: FreshBooks, dinner, Levi, Mike Joe - strategy discussion). It's important to have those details in case of an audit. If you pay with credit card you will have a pen in your hand so after you sign the merchant's copy, add a note to the top of your receipt - too easy.

3) I store them all in my wallet and dump them out about once a week into a shoebox.

4) At the end of the year/quarter/etc I label empty envelopes with all my expense categories (meals, auto, rent, telephone, etc). I put all my expenses for each category in those envelopes. Then, one by one, I dump out each envelope and title the expenses in each category and write it on the outside of the envelope (this usually only takes about an hour).

5) I run my revenue report in FreshBooks

6) I fax a sheet of paper to my accountant that includes my revenue collected for the year/quarter to my accountant and the total for each expense category.

7) I wait to hear from my accountant how big a cheque I have to write to the tax man.

That's it. My taxes usually take me 1-2 hours a year using this method.

tomtjsol · Jun 4/2008 9:19 am

I use Quicken Home and Home and Business. It is simple and easy. For a one man show it is simpler them QuickBooks. If or when I grow I can move into QuickBooks.

Fresh Taavi · Jun 4/2008 10:27 am

ooo wrote:
If Mr. McDerment is raking in less than $3 - $4 month, then I shudder to think what Mr. Burns salary is.

If my bank account is any indication, it's more than that...

jeffd · Jun 4/2008 10:36 am

Just a quick thought - has anyone ever used www.shoeboxed.com? I have never tried it - but it looks interesting. Seems to be a great complimentary service to the expense tracking in Freshbooks. It might actually answer some of Heather's concerns with the "envelope" method.

yourmanstan · Jun 4/2008 10:49 am

shoeboxed.com does look interesting. i've wondered if there was an alternative to neatreceipts.com

iacprofessionals · Jun 4/2008 1:16 pm

Jeff - shoeboxed.com is also endorsed in my new book (as is FreshBooks) they are excellent. For those of you that do not know basically what you do is store all of your receipts (you scan them in) and then tag them with notes (meetings, dinners, marketing etc.) If you don't have a scanner you can actually mail in your receipts to shoeboxed.com and they will scan them for you.

Excellent product!

williamives · Jun 4/2008 1:18 pm

jeffd wrote:
Just a quick thought - has anyone ever used www.shoeboxed.com? I have never tried it - but it looks interesting. Seems to be a great complimentary service to the expense tracking in Freshbooks. It might actually answer some of Heather's concerns with the "envelope" method.

shoeboxed.com looks very interesting! I wonder if they have plans to add an API. It could link quite elegantly with Freshbooks Expenses. shoeboxed appears to be like freshbooks but at the opposite end of the accounting process...

Alternatively, a question for freshbooks: do you see any chance in the future for a simple ability to link scanned receipts (stored in the Documents section) with Expenses?

I'd understand if you felt that more expenses features would distract from being an 'invoicing' application. But it would be very useful, I rather not use yet another seperate web application. I already have Basecamp, Highrise, Backpack & Freshbooks open all day.

Will

Last edited by williamives (Jun 4/2008 1:20 pm)

yourmanstan · Jun 4/2008 3:26 pm

i just read shoebox terms of service and i can say 100% i will not use it now

here are some exerpts:

You acknowledge and agree that Shoeboxed may suspend or discontinue, without prior notice to you and at the sole discretion of Shoeboxed, some or all of its Services, making the Services unavailable to you or other users.

Shoeboxed may remove any Content or user accounts at any time and for any reason at the sole discretion of Shoeboxed.

Shoeboxed does not guarantee that the Service will meet your requirements or expectations, that your use of the service will be uninterrupted, timely, secure, or free from errors, that information obtained from the Service will be accurate or reliable or that defects in the software of the Service can or will be corrected.

Shoeboxed shall not be liable or responsible for the deletion of, corruption of, or failure to store any Content or other data used in or maintained by the Service.

basically the entire TOS states that no one should have ANY faith in their service, that they can stop the service without reason and without compensation... looks like another SUNROCKET to me. not the place for important documents.

Last edited by yourmanstan (Jun 4/2008 3:27 pm)

iacprofessionals · Jun 4/2008 4:01 pm

Yourmanstan,

The main reason for all of those exerpts is because shoeboxed.com is completely free - unless you are mailing in receipts which then ranges from $9.95 to $59.95. But think about it - have you ever used neat receipts? I did and scanning 100 receipts too me about 3 hours. My time is worth more than $60 bucks ;-)

Also - just FYI I have currently about 8 clients who use shoeboxed.com and I log in there to read tags so I know how to allocated their expenses etc. - we have not had a problem with anyone of those clients.

Just FYI

danenglander · Jun 4/2008 4:06 pm

Just wanted to give a shoutout to all our supporters and users out there. Apparently there are quite a few on the Freshbooks forums! Happy to see that!

Anyway, as many of you have already mentioned, Shoeboxed is a great tool for automating your receipt organization. Digitizing receipts is important and can eliminate the ubiquitous and anachronistic role that paper receipts play in your life. Try our free, do-it-yourself version of Shoeboxed by scanning receipts yourself, or let us do it for you.

http://www.shoeboxed.com
http://www.shoeboxed.com/compare-plans.htm

Shoeboxed is experiencing exponential growth, both in terms of the value of all receipts in Shoeboxed and in the number of receipts that people store on the site. This is in part due to our commitment to your security. We have 128-bit SSL encryption, which is the same encryption used by most bank websites, we are certified by Hacker Safe - one of the most respected organizations for checking website vulnerabilities, and are seeking a certification from TrustE - a non profit that reviews privacy policies and terms of services and makes sure they are appropriate and fair to customers.

We have a terms of service that is similar to most websites that store sensitive information. We have some lawyers that tell us what to write on our TOS, but we've never ever had a situation where we denied service to anyone, discontinued a service, removed an account without it being requested, or received a complaint for content being discontinued or removed.

@yourmanstan: if you are or anyone else is interested in talking more about this, let me know; I am more than happy to talk more with you about it. Call my cell (919.943.5322) or Toll Free (888.369.4269) anytime!

And again, thanks to everyone out there that's using Shoeboxed. We're growing faster than ever!

Stay Organized,

Dan Englander
VP Community
Shoeboxed.com

iacprofessionals · Jun 4/2008 6:12 pm

Hmmmmm..... we are being spied on. ;-)

jeffd · Jun 4/2008 6:30 pm

Seems we are being spied on

Dan, thanks for jumping in. I actually read yourmanstan's post, and quickly dismissed it as just legal jargon, which is what I think you are saying. BUT, rereading it, it does seem a bit over the top... it seems to be screaming "DON'T RELY ON US". Which I assume is exactly the opposite of what you are going for... sometimes I think the legal advice has to be balanced with the business sense, and I'm not sure a terms of service should ever lose you customers (like our friend yourmanstan there). Anyway - just thinking outloud.

I am curious though, do you currently provide service to Canadian customers with your mail-in receipt plans? And do you have an API or one in development? It would be a nice tie-in with freshbooks - and would be fairly simple to implement a quick reconciliation app if the categories matched up on both sides.

danenglander · Jun 4/2008 8:17 pm

Thanks for your feedback everybody. I've already scheduled a meeting with one of our lawyers to talk about the TOS. We'll be looking at it closely over the next week, and we'll make some changes to reflect our status as a reliable, useful and popular service. Sorry it may have turned off one or two people, but consider it under review!

I assure you though, that we're not spying on you. Quite the contrary: we're doing everything in our power to keep your receipts save and secure... oftentimes more secure that they are sitting in paper form on your desk at home!

jeffd: we are looking into an API and other ways to integrate with other software. Not sure what the timeline is exactly for that, but it's definitely coming up. Check out our blog for updates: blog.shoeboxed.com

Also, for Canadians: Our Receipt Mail-In Basic program was designed for Canadians in mind! At this point, we only have the capacity to adjust to the USPS, so we haven't set up our Mail-In operations internationally yet. With Mail-In Basic, though, Canadians can mail us their receipts, we'll scan them in and upload them to their accounts, and then shred and recycle them.

Let me know if you have any other questions! I'm happy to help.

Dan
http://www.shoeboxed.com
Toll Free: (888) 369-4269

ooo · Jun 5/2008 8:59 pm

yourmanstan wrote:
basically the entire TOS states that no one should have ANY faith in their service, that they can stop the service without reason and without compensation... looks like another SUNROCKET to me. not the place for important documents.

lol. Most TOS agreements are worded that way. The following are portions of Freshbooks TOS - http://www.freshbooks.com/terms-of-service.php

5. Accuracy and Validity of Information and Opinions. 2NDSITE INC. will make a reasonable effort to ensure that information it contributes to FreshBooks is timely and accurate. However, 2NDSITE INC. does not endorse or warrant and assumes no responsibility whatsoever for the timeliness, accuracy, reliability, completeness or usefulness of any statement, opinion, advice, service or other information contributed to FreshBooks.

2NDSITE INC. may also intercept and disclose any content, record, use or other information to the extent reasonably necessary to protect the rights of 2NDSITE INC., for mechanical or service quality control as permitted by law, or to comply with any law, regulation, or governmental request.

If subscriber exceeds paid for file sharing capacity or monthly bandwidth (20 times total file sharing capacity), Subscriber shall automatically be billed for such additional file sharing capacity and/or related bandwidth charges at the rate posted on www.freshbooks.com from time to time.

I couldn't find these rates anywhere. I guess since they're posted from time to time they are also deleted from time to time.

2NDSITE INC. DOES NOT WARRANT THAT FreshBooks, OR INFORMATION OBTAINED THROUGH FreshBooks WILL MEET SUBSCRIBER'S REQUIREMENTS, THAT THE OPERATION OF FreshBooks OR FreshBooks WILL BE UNINTERRUPTED OR ERROR FREE, OR THAT ALL FAILURES OF THE FreshBooks TO SUBSTANTIALLY CONFORM TO OR PERFORM SUBSTANTIALLY IN ACCORDANCE WITH 2NDSITE INC.'S SPECIFICATIONS WILL BE CORRECTED. EXCEPT AS EXPRESSLY PROVIDED ABOVE AND IN SUCH WARRANTIES, IF ANY, AS MAY BE PROVIDED BY THIRD PARTY VENDORS OF EQUIPMENT OR SOFTWARE UTILIZED IN CONNECTION WITH FreshBooks, THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF FreshBooks, AND INFORMATION OBTAINED THROUGH FreshBooks IS WITH SUBSCRIBER.

It's all written in uppercase too.

I think Freshbooks conducts business in a very good way but even they can be picked apart if you go by what's written in their TOS.

Fresh Taavi · Jun 6/2008 10:50 am

Aye, that stuff does sound pretty silly. And yet, it's very probably necessary to protect us--and our users--from potentially harmful behaviour on the part of single users.

We do our absolute best to ensure that we uphold the highest standards of customer service, which includes protecting your data, and helping you to do your work through our service. I personally believe in our mission to provide a useful service to small businesses, to help save them time and money. If we took advantage of the power the terms of service specify, we wouldn't be holding ourselves to that standard of excellence.

That doesn't mean that we shouldn't continually re-evaluate the Terms to ensure that they provide necessary and sufficient protection for us and our legitimate users. I'll make sure that Mike reads this (and maybe even comment again!).

Have a great weekend!

yourmanstan · Jun 6/2008 10:55 am

in order of the exerpts

1) if freshbooks fails, we can simply invoice through a different system. that would be terrible, but we could still get by, perhaps without interruption. if we get audited and don't have receipts...we may cease to exist.
2) not a fan of the second exerpt, but disclosure of information is also limited by the privacy policy which states that information will not be disclosed.
3) if you exceed your limits, you will be billed. seems obvious
4) simply states that the system may not meet some arbitrary standard of operation. however, if there is a failure of operation that freshbooks has specified, then it will be corrected.

so NO, ...i think freshbooks TOS is just fine and reasonable to protect the parties.

In my opinion, it is not fine to store vital financial records with a company that essentially states they may go out of operation at any time... can terminate your account at any time without reason...delete content your their own discretion...and provide no resolution for corruption or failure of service. call me crazy.

with that said, it sounds like they will be amending their TOS, in which case I would definitely re-evaluate. i'm sure their service is much better than their terms make them appear. it would certainly be nice to have an online record of receipts, and the ability to have receipts digitized without thinking about it is VERY nice. It would also be nice if they had OCR built into file uploads! definitely a great concept for a website.

tbex · Sep 8/2008 1:34 pm

Hi all,

This is all really helpful! Can anyone recommend a good Mac solution? I have heard that Quicken for Mac isn't up to par.

Thanks!

iacprofessionals · Sep 8/2008 9:53 pm

QuickBooks for Mac is excellent. I personally have not tried Quicken for Mac as I work with companies rather than personal finance.

However, Quicken has an Online version that is fairly simple and works well. QuickBooks online works even better.

Saxi · Oct 4/2008 9:57 am

tinkugal wrote:
Hi,

I own a small art gallery and thinking about becoming a customer. I was wondering if I could use Freshbooks for invoicing customers and tracking our business expenses and thereby not have to use Quickbooks at all, or is it not really suited for that purpose?

Our accounting is not very complicated as it is a small company and low volume business.

Thanks,
--tinku

Not really, there are too many missing pieces to make it fully usable as an accounting system. It's close, but its got a ways to go.

#1 Jun 2/2008 8:48 pm

Can Freshbooks replace the need for Accounting Software?

#2 Jun 3/2008 2:32 am

Re: Can Freshbooks replace the need for Accounting Software?

#3 Jun 3/2008 11:20 am

Re: Can Freshbooks replace the need for Accounting Software?

#4 Jun 3/2008 4:33 pm

Re: Can Freshbooks replace the need for Accounting Software?

#5 Jun 3/2008 5:50 pm

Re: Can Freshbooks replace the need for Accounting Software?

#6 Jun 3/2008 9:35 pm

Re: Can Freshbooks replace the need for Accounting Software?

#7 Jun 4/2008 9:07 am

Re: Can Freshbooks replace the need for Accounting Software?

#8 Jun 4/2008 9:19 am

Re: Can Freshbooks replace the need for Accounting Software?

#9 Jun 4/2008 10:27 am

Re: Can Freshbooks replace the need for Accounting Software?

ooo wrote:

#10 Jun 4/2008 10:36 am

Re: Can Freshbooks replace the need for Accounting Software?

#11 Jun 4/2008 10:49 am

Re: Can Freshbooks replace the need for Accounting Software?

#12 Jun 4/2008 1:16 pm

Re: Can Freshbooks replace the need for Accounting Software?

#13 Jun 4/2008 1:18 pm

Re: Can Freshbooks replace the need for Accounting Software?

jeffd wrote:

#14 Jun 4/2008 3:26 pm

Re: Can Freshbooks replace the need for Accounting Software?

#15 Jun 4/2008 4:01 pm

Re: Can Freshbooks replace the need for Accounting Software?

#16 Jun 4/2008 4:06 pm

Re: Can Freshbooks replace the need for Accounting Software?

#17 Jun 4/2008 6:12 pm

Re: Can Freshbooks replace the need for Accounting Software?

#18 Jun 4/2008 6:30 pm

Re: Can Freshbooks replace the need for Accounting Software?

#19 Jun 4/2008 8:17 pm

Re: Can Freshbooks replace the need for Accounting Software?

#20 Jun 5/2008 8:59 pm

Re: Can Freshbooks replace the need for Accounting Software?

yourmanstan wrote:

#21 Jun 6/2008 10:50 am

Re: Can Freshbooks replace the need for Accounting Software?

#22 Jun 6/2008 10:55 am

Re: Can Freshbooks replace the need for Accounting Software?

#23 Sep 8/2008 1:34 pm

Re: Can Freshbooks replace the need for Accounting Software?

#24 Sep 8/2008 9:53 pm

Re: Can Freshbooks replace the need for Accounting Software?

#25 Oct 4/2008 9:57 am

Re: Can Freshbooks replace the need for Accounting Software?

tinkugal wrote:

Board footer