Well, I’ve had almost a full week of using Freshbooks for all my businesses bookkeeping. Today, I wanted to talk a bit about expense tracking.

As I mentioned before, this is not a full featured bookkeeping program. It won’t be tracking assets and depreciation. However, if I want to keep track of advertising, bank fees, and other business expenses, it can do that.

Here’s what you see when you add new expenses. It’s a very clean and simple interface, but has a couple features that makes it very useful.

Most of these are pretty self-explanatory. You add the $ amount and the date of the expense. You can optionally add the vendor. The category is the type of expense you’ve incurred. There is a list of basic categories there for you already, but if you click on the Categories tab at the top, you can add your own categories. I found that there were quite a few I needed to add, but maybe that’s just because I track things differently. There’s a field for adding notes to the expenses if you need to.

There are 3 check boxes at the bottom that make this much more powerful.

1. Taxes – This allows you to assign a tax code to the expense, such as GST or HST. If your business charges GST (and therefore must track your taxes), you will need to assign the proper taxes to your expenses. Once you do, Freshbooks simply backs out the GST from the expense. For example, if I had an expense of $42.00, and chose GST, it would automatically allocate $2 to GST, and the rest to the expense.

2. Recurring – If you’re like me, a lot of your expenses are recurring. My internet connection, Dropbox, Mozy, etc. all get charged to my credit card monthly. Checking off this box allows you to set the frequency of the recurrence, so the expense is automatically added for you on those days. This certainly takes the hassle out of manually entering these each month.

3. Assign to Client – Sometimes you will have to pay for something that you need to bill the client for. For example, if you’re fixing someone’s computer, the parts you buy are expenses to you, but they will also be billed back to the client. Checking off this box gives you a drop-down menu to select the client. These expenses can then be added later to the next invoice you send out.

QuickBooks has this same functionality, but I find that it’s presented in a much cleaner way here. Bookkeepers will be used to the complicated interface that a regular program provides, but I think this is a good reason why Freshbooks is a great option for the bookkeeping novice. Time will tell if this is going to be powerful enough for my purposes. However, if the rest of the month goes well, I will have no problem recommending this to non-bookkeepers with a basic set of needs.

Next time, I will talk about the invoicing features. It’s far enough into the month, that I’ve sent out a couple already, so I can show you how it went.

You know you’re a geek when you get really excited about trying out new accounting software. As I mentioned before, I’m going to use Freshbooks for my own personal bookkeeping during the month of June. If it works well, I’ll be switching (just my own) bookkeeping over to Freshbooks permanently. Just to clarify, I have used the app/service briefly in the past, so this isn’t entirely new to me. I recently signed back up for a free account, and then got inspired when I heard more about them in the book I’m reading, “The Referral Engine”.

A quick look at the old calendar this morning proved that it is now June, and that means it’s time for the experiment to begin.

Day 1: Gettin’ my add-on…on

One of the features I like the most about Freshbooks is its time tracking features. From the website, they have a timer that looks like this;

As you can see, it’s very straightforward. You hit the play button, and get to work. When you’re done, click the pause button. There are two drop down menus, Project and Task. Project usually refers to the client, and the task is…well…the task you’re doing (i.e.. bookkeeping, web design, etc.).

You can set these up before you get to this point, or you can add them on the spot. The Hours field will be filled with the time you spent working. Add notes if need be, and then click on Log Hours. Now, the 1.24 hours you just spent working is now logged, and associated with the right client. At this point it seems really easy to make an invoice from the time you have logged for each client.

I usually charge a flat rate per month for my clients, but I really like this feature. I’m going to use it to see if I’m working more on a particular project than I thought. If I’m billing under the assumption that I’m working about 20 hours per month on a client, and this ends up showing me I spent 30 hours, I’ll know something needs to change.

Freshbooks also works with a lot of 3rd party apps and widgets. Since I’m on the subject of time tracking today, I’ll show you the gadget I found. Since I’m using Windows 7, I decided on the Vista Time Tracker Gadget. This installs a very simple app in the Windows Sidebar that looks a little something like this;

As you can see, it’s also really simple to use. You choose the task and project from the drop down menus, and click play. Once you’re done, click the pause button, and then click on Record. Voilà ! Your time is now logged back on the Freshbooks site.

Well, that’s what I’m doing today, tracking my time. On the next instalment of my experiment, I’ll try out expense tracking. And, once again, I’m way more excited about doing this than I probably should be.