That Bookkeeper

I can’t believe how quickly the time went on my experiment.

Now that June is behind us, it’s time to sit down and review the month I spent with Freshbooks. There are many questions to be answered.

Did I like using Freshbooks exclusively?
Did it work better than QuickBooks?
Would I recommend it to others?
Did Freshbooks help me lose 10 pounds, boost my self-confidence, and stop people from kicking sand in my face at the beach?

Let’s read on and find out.

I’d like to start by describing the perfect Freshbooks customer. This isn’t going to be the right app for everyone, so before you try it out, I think it’s important you fit the majority of this profile.

You will most likely be a freelance service provider, working alone or on a small team of freelancers. These will be other contractors, not employees (since payroll isn’t a part of the software). Ideal candidates would be bloggers, writers, consultants, designers, and people offering technical support.

You will either not need or not possess a knowledge of accounting terminology. However, either due to budget or other reasons, you prefer to handle your financial records yourself, rather than hire a bookkeeper. Freshbooks data will most likely be used to generate reports that will be sent to an accountant each year during tax season (or maybe even a bookkeeper that you update monthly).

You are very comfortable working online or in remote locations (coffee shops, remote offices), and already use other web services to help your business; possibly some that tie into Freshbooks (Shoeboxed, Basecamp, etc.).

Most importantly, you want to spend your valuable time working on your business, not on its financial records. You want a simple service that will allow you to look professional without having to spend a lot of time or money doing so.

If any of that sounds familiar, Freshbooks might be the app for you.

I didn’t use all of Freshbooks’ features. I don’t have other contractors I work with. A really cool feature that is available is to collaborate with other service providers on a project. For example, if my client needed their website updated, I could outsource that to a web designer. He or she could (using their own Freshbooks account) bill time and expenses to my project. From there, I could bill the client and pay the designer, all from within Freshbooks.

The other thing I really tried to use was the support, which I’ve heard is amazing. In fact, the folks at Freshbooks asked me to try out their support as a part of my review. I just never ran into any reason to ask for help. The interface is really simple to use, and I just couldn’t find a situation where I needed something explained to me. There were never any glitches, the service never stopped working, and I never ran into a situation where I didn’t understand how to perform a task. Having such a clean, easy to use product must help them with their support calls. I can’ t imagine how many calls the QuickBooks team gets every day, just because of how unnecessarily complex some of their UI is. 

Like any product, there were pros and cons. Freshbooks isn’t for everyone, so here’s a list of positives and negatives I ran across last month.

Pros

• Really simple to use
• Canadian company
• Small, enthusiastic support team (from what I’ve read, I didn’t need to test this)
• Support for GST/HST reports
• Time tracking w/ Windows app
• Integration with 3rd party apps/services (Basecamp, Shoeboxed, Google Apps, etc.)
• Flexible account pricing (from free to $80/month)
• Professional, customizable interface for your clients
• many more

Cons

• No ability to download transactions to QuickBooks directly
• Too stripped down for more complex businesses
  • no inventory, payroll, or Chart of Accounts
• Premium plan is more expensive than competing products
• Expensive iPhone app

The Pros speak for themselves. I really found a lot to like about Freshbooks, and certainly couldn’t list everything off. I will, however, give a bit more detail on some of the cons.

I wish there was a way to download your transactions directly to Quicken or QuickBooks, like you can from your bank account online. I’m not sure what would be required on their end to accomplish this (maybe it’s something only banks are allowed to do?)

There are quite a few similar products currently on the market. Two examples are Zoho Invoice and WorkingPoint, both of whose premium accounts were less expensive.

Zoho’s free plan lets you have unlimited clients, but only lets you send out 5 invoices/estimates per month. For $8/month, you get 25 invoices/estimates. Both accounts also let you have 2 users (you only get additional users in Freshbooks with the $39.95/month Team account).

WorkingPoint is much more robust. It’s a lot more like QuickBooks, with a Chart of Accounts, inventory, and payroll (optional, and quite pricey). Their free account lets you have 5 clients, and unlimited invoices. The premium account is $10/month, which gives you unlimited clients, and the ability to import transactions from your online bank accounts.

Finally, there’s what I currently use. I am a QuickBooks ProAdvisor. Basically, it’s a membership at Intuit for bookkeepers and accountants. For $25/month, I get free copies of QuickBooks Premier (with full payroll) and Enterprise, along with access to special training and support. I don’t use the Enterprise software that often, but I’m basically getting $1,500 worth of software for $25/month. There’s no real comparison here. Freshbooks could never replace QuickBooks for my client work. Even WorkingPoint would have to be really good to justify switching my clients over to it.

The last complaint was about the iPhone app. There is an app called MiniBooks, that lets you do all of your work from your phone. The app is $14.99. There’s also an app called ExpenseBooks, which just tracks your expenses for $4.99. I haven’t tried out either, but $15 seems like a lot for an iPhone app. I’m pretty sure there used to be a “Freshbooks” iPhone app that just did time tracking. It was either free or very cheap. That’s all I’d want, and it’s too bad it’s not available.

The Verdict

So, this huge post (sorry for my verbosity) is here for one purpose. I wanted to see if Freshbooks would be something I could use day to day for my personal client work.

If you fit the description I gave for the ideal customer, I think this is a great option. You can use Freshbooks for your day to day tracking, and then hand off the heavier work to a bookkeeper or accountant.

As for me, I’m not quite ready to make a full switch.

The problem is I just can’t justify another $20/month for bookkeeping software, especially given the nature of my clients. Right now, I have clients who mostly pay me in cash or by cheque. Only some of them use email regularly, and I usually just hand them an invoice in person when I meet with them each month.

If I had lots of web-savvy clients, who always paid me by PayPal, then this would be a good choice. In fact, the $80/month plan makes more sense to me than the $20/month plan does. If I had 20 clients who I could automatically collect from each month, the time savings alone would more than justify the extra cost.

I really enjoyed doing this review. I’ve been stuck with the same app for so many years, it was nice to see what other people are doing. Not only does this give people a new choice to manage their finances, it also puts the pressure on companies like Intuit and Sage to improve their own products. I would love to see a version of QuickBooks that was this easy to use, and backed by equally friendly support staff.

If you have any questions about my results, please let me know in the comments, or contact me directly.

A very long time ago I worked at an office supply store. I won’t name any names, but let’s just say that I had to listen to “Taking Care of Business” far too often during staff meetings. In that particular store, we had a pathetic book section. It was mostly filled with tech how-to books. Things like “Windows 98 for Dummies” summed up the meagre selection. There were only a few business or “self development” titles in the mix. One of the books whose title caught my eye was “Don’t Sweat The Small Stuff…and It’s All Small Stuff”, by Richard Carlson.

At the time I wasn’t much of a reader. I think I walked past the book 5 times a day for the better part of 2 years without ever picking it up. I just read the title, and it always stuck with me. The idea (assuming the book’s premise relates to the title) seemed sound at the time, and remained that way for a long time. That was, however, until I really started working seriously with small businesses.

I think the idea of not letting the small things take over in your personal life makes sense. If you are trying to raise kids, don’t freak out if one of them just won’t eat their peas and carrots. Don’t lose sleep if you only vacuumed 3 times last week instead of 5. These things seem reasonable.

Small business is a whole different animal. Especially now, with the internet giving everyone a fairly level playing field, the small things can be the difference between successful and obscurity. Here are some examples of things that I take notice of:

1. The seller on eBay that includes a personalized note in each package they ship out.
2. The website I signed up to that DOESN”T include my password in plain text when they send me a confirmation email.
3. The book that has a website with handy extras for people to dig deeper into what they just read.

These things make a difference. I remember these things, and I tend to shop with those types of businesses over and over again.

Don’t Forget…You’re Not Selling The Small Stuff

Here’s the thing to remember. You still have to make sure the “big things” are in order before sweating those small things. The small things are the sprinkles on the sundae, they aren’t the ice cream. If your ice cream tastes like paint thinner (ok, I don’t really know what that tastes like…honest), nobody is going to care how generous you are with the sprinkles. I didn’t know that the girl on eBay was going to send a personalized note. I bought from her because the product was what I wanted, and for a price I felt was reasonable. The note brought me back a 2nd time, but it didn’t make the first sale.

It’s great if you have a nice website. It’s also great if your social media skills are strong, and you help out everyone on Twitter that mentions your product. Just make sure that before you even open the doors, that your product is worth talking about. In order to differentiate yourself from the pack, you first have to be running with the pack. If Michael Johnson didn’t train, and showed up to the Olympics weighing 275 with Cheetos stains on his shirt, the gold shoes would have looked even sillier.

If you are going to sweat the small stuff, then do so only after going absolutely crazy over the big stuff first. Triple test the product, give some away to friends, family, and strangers. Make sure you know everything about the service you’re providing. Run the numbers backwards and forwards (if you need help with the numbers, I happen to know a guy), and make sure that the business will eventually make a profit. When all the big things have been obsessed over, then and only then go ahead and sweat the small stuff. Make sure the bathrooms are clean. Hire someone to do a great website (don’t do it yourself if you don’t know how), create a referral program, and think up cool ways to make your customers smile.

It’s not going to be easy. It’s going to take an awful lot of hard work and determination, but you’re up for it, right?

I can’t believe it’s been a month since I started my experiment with Freshbooks. Tomorrow will be the last day of my trial, and then I’ll be making some decisions.

I’ve enjoyed the chance to learn about a program in this way. Usually, when I “review” a product or program, I spend a day or two with it, and get a very superficial idea of the overall experience. Spending a full month has been nice, it let me try everything out, without the time pressure. It also allowed me to use my own data, so instead of replicating a real life situation, I used it in my real life.

During the past month I also received a message from two other companies, one that works with Freshbooks, and another that is an alternative to it.

Early in the month, the folks at Shoeboxed recommended that I try out their service alongside Freshbooks. With Shoeboxed, you send in your receipts in an envelope, and the folks at Shoeboxed scan them, organized them, upload them, and then send you back the originals. Considering how much time I spend doing this with my own business and personal receipts, it sounds like a great thing to outsource.

Also, the folks at WorkingPoint offered me a trial of their premium service. WorkingPoint is much more robust online bookkeeping software. Although a freelancer can use this, it seems like you could run a fairly substantial business with this app as well. It handles banking, a full Chart of Accounts, inventory, and payroll (optional).

I wanted to focus on Freshbooks this month exclusively, so I didn’t try either of these out yet. I’m seriously considering taking a similar experiment with both of these companies in July. No matter what bookkeeping app I use, I think Shoeboxes would be a great time saver. I think the membership I’d use is around $20/month, which is much less than my billable time that is spent every month doing this on my own. WorkingPoint looks interesting. It might be something to suggest instead of QuickBooks. My main concern is that it is very US-centric, so I wouldn’t get some of the reports I’d like. Since Freshbooks is a Canadian company, it natively supports the GST reports I need.

I’m going to finish up the month tomorrow. I’ll need a couple days to sort through the pros and cons, and then I’ll be writing up a full review.

Stay tuned!

I’m about to drop a crazy revelation on all of you, so brace yourselves.

You’re not good at everything!

Now, to be clear, I didn’t say anything. This wasn’t some odd personal attack. I said everything. I’m sure there are lots of things you are all really good at. Maybe some of you have a longer list of skills than others. However, none of you are good at everything. You may think you are, and you may have a loyal circle of friends that are willing to back you up on this false theory. Unfortunately, they’re wrong, and thinking this way is doing you and your business nothing but harm.

Let me get this virtual intervention started. I am terrible at design! I’m fascinated by it, and I spend an unhealthy amount of time trying to be better at it. But, at the end of the day, I’m not artistic. I don’t have any innate skills, and I don’t seem to be able to force any improvement, no matter how much time I throw at it.

I would love to be able to design a slick logo for my business, or redesign the template for this site by hand. Heck, I’d settle for a good grasp of CSS and PHP, and at least be able to code the basic framework, and just go out and buy some stock photos to fill in the void. Unfortunately, I’m just interested enough in it to drive myself mad, but not enough to spend the crazy amount of hours per day to really learn how to do it.

Why do I do this?

I don’t like outsourcing or delegating. I’m of the mindset that it’s easier to just do it myself, rather than spend the time and money to get someone else to do it for me. After all, who knows what I want better than me? If I want to run my own business, I should know how to do every aspect of it, right? WRONG!

I’ve spend hours going through WordPress template sites, trying to find the right one. I’ve spent countless more trying to tweak the ones I download to look just right. When I’m not doing that, I’m installing program after program, trying to find the right one to help me design my logo, or my Facebook page. Clearly, it’s the fault of all these apps that my designs look terrible.

All this time I spend doing this is time that could be spent growing the business. Every hour I work on things I’m not good at, is another hour I’m not billing a client. These hours can add up fast.

Let’s say I bill out my time at $30/hour. If I spent 20 hours last month struggling through all these design projects, I effectively wasted $600. I bet I could have easily found someone who would have done this work for me for considerably less than $600.

Granted, there are no guarantees that I would have billed out $600 of work in the time I was “designing”. The point is that if I was using that time to focus on things I’m really good at, it would have been a much better use of my time. My files would have been better organized. I could have finished my real client work faster, and therefore would have had time to either double check that work, or gone out and searched for new clients.

What are you really good at, and are you doing it?

There is a reason you opened up your own business. You opened your roofing business because you are really good at fixing things. You started teaching piano lessons because you are really good at playing the piano, and at teaching others to do the same. You probably didn’t do it because you’re really good at cold calls or filming a TV commercial. So why are you spending all your valuable time trying to learn how?

I understand, when you are just starting out, you don’t have a big budget. You need to spend as little as possible on outsourcing. You want to hire a bookkeeper or a receptionist, but you just don’t have the budget. Sure, you have to work long hours to pull it off, but at least you’re saving money, right?

The thing you need to understand is that time is something you can spend too much of, just the same as money. If you are working 80 hours a week, your mind’s bank account will go into overdraft just as quickly as your chequing account. Pretty soon you don’t have the energy or focus to do the things you’re good at properly. You are better off doing 3 things really well than doing 10 things adequately.

In the end, you need to sit down and run the numbers. If you are charging $50/hour for your services, don’t do the work of someone who charges $20/hour. It just doesn’t make sense (or cents). Plus, the expert you hire will take less time to finish the same project. The project that takes you 10 hours to finish will take them 3. Heck, find the really good one who charges $50/hour, but only takes 2 hours to finish the job. If it only costs you $100 for a project that would have taken you 10 hours to complete, doesn’t that make more sense?

It will be hard for some of you (myself included) to resist the urge to do it all alone. If you’re like me, you started your own business because you like to do things yourself. There’s nothing wrong with that. Just make sure you spend most of your time doing the thing that got you here in the first place. You will be happier, and your business will grow much faster if you do.

Any good software handles two things very well; input and output. This is the basic requirement of all software, and certainly bookkeeping is no exception.

Freshbooks makes it very easy to enter expenses, track time, and generate invoices. However, as a bookkeeper, I need reports. I want to know how much revenue I generated, if I made any profit, and how much I will owe the government.

As you would expect, the list of reports Freshbooks can generate is smaller than a typical bookkeeping program. 

Here’s a side by side of the reports Freshbooks offers, compared to the Report Centre in QuickBooks Premier 2010, which is what I use for my clients. As you can see, I could only show the list of categories in QuickBooks. The full list of reports wouldn’t show up in a simple screen capture. But, as I have said many times, Freshbooks isn’t supposed to be as full featured as QuickBooks. The majority of Freshbooks’ ideal customers wouldn’t have a clue what to do with the amount of reports that QuickBooks spits out.

The question is, are the reports in Freshbooks good enough for their target market?

I think the answer is yes.

The reports are split into 3 categories; Finance Reports, Invoice Reports, and Timesheet Reports. Once again, I have created slides in Slideshare (via PowerPoint) to show you the various reports you can generate.

As I said, there aren’t as many reports as I’m used to working with. However, the ones you get are simple, use basic terminology, and give the average freelancer exactly what he or she needs. At a quick glance, these reports should tell you everything you need to know about the state of your business. Or, they’re easy to export to an Excel spreadsheet. From there, you can save them, email them to me, and let me take care of the rest.