You're in that stage of your business journey where you need to simplify your accounting. So, you are looking for suitable online accounting software. These are the ones that will ease your business bookkeeping, accounting, and inventory management woes. After hours of looking, you're left with two options: FreshBooks vs. QuickBooks.
While both look promising, the question is, what's the right choice for your business? Let Unloop answer that by examining these two popular accounting solutions further.
FreshBooks and QuickBooks are two excellent accounting solution rivals but have unique differences. Before you decide which one of these accounting software platforms you like better, let's set the criteria from which we'll compare the two.
First on the list determines how cost-effective accounting software is. Of course, this is relative to the value they offer. But let's be square and look at this strictly from a price point perspective. That means the lower the price, the better.
Here's where it gets interesting. We'll look at the structure of each software's offerings and how much their basic accounting features bring convenience and add value to your business.
Here are some essential accounting features your software should have:
Another factor to consider before deciding what accounting software you'll get is its ability to handle volumes of transactions. As a small business owner selling on various ecommerce platforms, you'll need to think long-term and pick a tool to keep up with your growing business. The bigger it gets, the more complex transactions to manage.
You'll need inventory tracking if you own an ecommerce business enrolled in programs like Fulfillment by Amazon. Excellent software can make accurate adjustments when there's inventory movement because it ties closely to your costs and revenue.
On the other hand, inaccurate inventory management on the accounting end is a disaster that requires long hours of number crunching.
As your ecommerce business grows, you'll need more accounting-savvy people to delegate the grunt work of poring over numbers. You'll want software with multiple user capabilities to share access to trusted staff if the work becomes too time-consuming or you'd rather do something else.
Now that we've set the deciding factors for the two accounting software, let's put them to the test. Which one would be a better choice for your business? Let's start.
FreshBooks accounting software has a strong value proposition that targets small business owners and self-employed people. The brand offers quality support at any stage of your business journey and caters to several types of businesses.
So whether you're a freelancer, a professional, a traditional business, or a contractor servicing other businesses, FreshBooks will meet your needs.
Their pricing structure is based on a subscription system, with their cheapest package priced at $8.50 up to $27.50 per month. If you pay the one-off price, you'll pay $132.60 for the lowest-priced package and $429 for the highest. They announce promotions on their plans sparingly.
Browsing the offerings of FreshBooks will lead you to three different plans: Lite, Plus, and Premium. In a nutshell, here are some of the features they offer:
Once you explore FreshBooks, you can use the 30-day free trial to get a feel of how their software works. Its interface is straightforward enough for non-professionals to adapt to quickly.
QuickBooks is the child of Intuit—a software company behind many other businesses and financial solutions. This company has been around for some time and has built many products that cater to a specific consumer segment.
For example, they have software for accountants, small businesses, and individuals. However, their dominant software brand is QuickBooks.
Subscriptions also define QuickBooks' pricing structure. The cheapest plan they offer costs $15 per month, while the highest price reaches up to $100 per month. Occasionally, discounts and promotions are also offered.
Potential QuickBooks users who are business owners can choose between four plans: Simple Start, Essentials, Plus, and Advanced. Their offerings vary in scope depending on what plan you select, but to lay out some of their offerings, this is what you'll get:
QuickBooks shines in the number of plans and add-on features you can subscribe to. It offers a powerful accounting system for small businesses and even large enterprises. For example, their QuickBooks Point-of-Sale (POS) is an add-on that lets you track sales when they were made.
FreshBooks and QuickBooks both make excellent options in terms of functionality. They can connect to your business checking or savings account. Both can generate financial reports, issue invoices, track expenses, and enable bookkeepers to make journal entries.
However, depending on certain features, one tool may excel over the other. For an ecommerce business, evaluating these is crucial. What unique benefits does QuickBooks have over FreshBooks and vice versa?
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If you need only basic accounting features, FreshBooks might suit you more. This accounting software typically caters its services to freelancers and individual contractors. We recommend exploring other options like QuickBooks if you're seeking more advanced tools.
At face value, there's no doubt FreshBooks wins this criterion. Your $132.60 can get you a year's worth of FreshBooks’ Lite plan compared to QuickBooks pricing of the Advanced plan at $100 per month.
To put the subscription price in a better perspective, let's compare two of the cheapest plans from both software: FreshBooks’ Lite plan and QuickBooks’ Simple Start plan.
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If you're pinching dollars and starting a business on a budget, Freshbooks is the better choice.
When it comes to FreshBooks and QuickBooks integration, QuickBooks is undoubtedly unbeatable. As long as you have mastered using it, you'll get a detailed cash flow, and tax preparation will become easier.
Both FreshBooks and QuickBooks offer cloud accounting with FreshBooks Cloud Accounting and QuickBooks Online.
Granted, FreshBooks can compete with similar standard offerings such as income and expense tracking, bookkeeping, and integrations, to name a few. It's also noteworthy that FreshBooks does a great job with unlimited billable clients.
However, small business owners can only enjoy this functionality when they upgrade to the Premium plan. QuickBooks also wins on the add-on features, which brings us to the next point.
QuickBooks for small businesses comprises an inventory tracking feature that exceeds expectations. While FreshBooks handles the basics, QuickBooks raises the bar with additional, more advanced features, such as low-inventory alerts and reorder functionalities. With these, you are empowered to manage your inventory on the spot.
However, in terms of inventory management, QuickBooks has the upper hand.
Small business software add-ons are available once you're subscribed to QuickBooks. As your business grows, the number of employees and the volume of your inventory follows. QuickBooks lets you upgrade your plan with additional features to adapt to this growth.
Features such as QuickBooks POS lets you track and manage large sales volumes. QuickBooks Payroll helps you accurately pay your employees' salaries. FreshBooks is yet to keep up with these sophisticated add-ons.
Another concern about scalability is the number of users allowed to access the software. Both FreshBooks and QuickBooks provide the option to add users to their self-employed and small business plans. However, FreshBooks has a base user limit of just one, and you'll have to add $10 for each additional user.
QuickBooks' plans vary in the number of permitted users, ranging from one (for their Simple Start plan) to 25 users (for their Advanced plan). You can even add accounting firms to the number of users; they all have separate slots.
QuickBooks excels over FreshBooks thanks to its superior inventory tracking, a broader range of offerings, scalability, and support for many users. This makes it a perfect choice for ecommerce business owners with complex inventory and various financial management needs.
Accounting software will significantly benefit you and your business, but only if you know how to operate it effectively. Subscribing to QuickBooks is just an initial step; you still have to invest time in learning how to use it. As a small business owner, this takes time and effort.
Let Unloop bridge that gap with our bookkeeping services. We are adept at utilizing QuickBooks, so we are confident about working efficiently with entrepreneurs like yourself to free up your time. Ready to level up your ecommerce accounting venture?
Book a call with us today to get started!
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.