I’m approaching this review through the eyes of a photographer but everything I’m mentioning here is 100% applicable to any other business.
As we’ve talked about before in the Business Of Photography post series, many photographers and creative industry entrepreneurs are working on their own and taking on a variety of responsibilities relating to their business. Without a doubt people’s least favourite of these burdens is accounting. FreshBooks is a cloud accounting service designed for small businesses that takes the pain out of all the little accounting tasks that we love to hate. By ‘cloud accounting’ I mean a service where you are not responsible for storing any information on your own computer. Everything is stored in the cloud much like Evernote that we talked about earlier. This has two main benefits for you:
- It’s accessible anywhere at any time if you have a mobile device like a smart phone, tablet or just access to a computer with an internet browser.
- Your important accounting data is backed up and safe from disaster at all times without you having to do a thing.
FreshBooks needs no programs to be installed, simply open up your browser and log in at FreshBooks.com or using one of their iOS and Android mobile apps. If you are keen to follow this review while using FreshBooks you can start a 30-day trial. Once the trial has finished you can either upgrade or you can continue to use the service totally free for up to three clients.
How Does FreshBooks Make Life Easier?
Invoicing – Get Paid Faster
We’ve all been in that position where it takes two or three weeks to put together a basic invoice to send to a client after a job, simply because you loathe the thought of any kind of accounting administration task. Doing one little task like creating an invoice just reminds us how many other little accounting tasks are falling by the wayside. So we put it off, over and over again. For photographers who deal with editorial clients dotted all around the world this task of staying on top of our invoicing is even harder. We often don’t even see the image in print so there is nothing there to remind us that it has been used. I’ve no doubt there are several magazines out there who never paid me simply because I didn’t stay on top of my invoicing. If you think they are going to send you a friendly reminder for you to send them that invoice……… think again!
But you like to get paid don’t you ?! As sole proprietors, cash flow is everything. It’s imperative you keep the money coming in as quickly as you can because by the time you realize you have a problem it could very well be too late. My absolute favorite feature of FreshBooks is the speed and professionalism it gives me with my invoicing. Ever since I signed up for their services I have stayed 100% up to date with my invoices and most of my clients now receive a post-dated invoice even before I have finished the job.
It begins with creating a new client in your database. You fill out all the contact details and add as many contacts to one company as need to receive the invoice from you. This alone is a useful feature as it allows you to send to both a marketing manager and an accountant at their company all with one click. Once you have created a new client it becomes accessible in a drop down menu on the invoice creation page. You can fill out your invoice items manually or select from a personally specified list of commonly used items. Then you select which taxes are applicable and the system automatically fills in the totals for you. Boxes are provided for any reference number your client might have provided you with and you can change the date with just a couple of clicks. These days I have gotten into the habit of sending my clients a post-dated invoice the moment we have agreed upon a shoot date and an amount to be paid. If the invoice is a recurring one you can choose that option here as well and all your future invoices to them will be automated.
Invoice Creation – Click For Larger View
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Once the invoice is complete you can click a button to e-mail it to them, or even click a button to send it via regular snail mail if you have an old-school client who prefers it this way. If you e-mail it to them they will receive a short template e-mail notifying them of the amount that is due, and giving them a private link to view the invoice. Clicking the link opens up their FreshBooks page where the invoice is displayed clearly and concisely. The client can choose to print it out, or save it as a PDF but here’s the best part…. they can also pay it right there on the spot!
You see sometimes your clients are just like you. They also dislike accounting and often late payments are not the result of a malicious disregard for your invoice or e-mails but instead the result of the very same reason we took so long to send them the invoice in the first place. Give them an easy way to pay the invoice and quite often they will do it immediately.
In 2009 FreshBooks did a survey that showed that people using their services were getting paid on average 14 days faster than those who were not. They also found that 60 percent of people were making more money now using their services due to improved accounting practices like record keeping and faster invoicing.
Invoice – Client View – Click For Larger View
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FreshBooks has a growing list of payment gateways that can be linked to your invoices but all the main ones have been implemented for a long time like PayPal or Authorize.net. There’s nothing quite like sending a client an invoice and receiving a payment notification less than ten minutes later!
Quickly keep track of the state of all invoices
Speaking of notifications, you don’t just get a great way to create invoices but you also get a great way to store them and track them. All your past invoices are archived but importantly you can also tell when someone has opened it. We’ve all had it happen where you ask for payment of an unpaid invoice only to get the reply that the client never received the invoice in the first place. Sometimes that’s not true but sometime it is genuine and this system can help you track that as well with a simple list that shows the state of an invoice. If you send one out and notice that a couple of weeks later it is still marked as unseen then you can quickly follow-up with that client to make sure they did not miss it in their in-box when you first sent it. Once you receive payment on the invoice you can fill in the details of when and how it was paid, then push it into an archived state where it will become part of your annual records.
FreshBooks will also save you time chasing un-paid invoices with their automated follow-up system. You can specify template e-mails for three follow ups at specific times, like 30 days after the invoicing date, followed by 60 days and 90 days. You can also specify whether any late payment fee will be added to the invoice at any of those points and if it is then it will be done automatically. You can even turn these notifications on or off globally or you can specify them on a client by client basis if there is someone you wish to leave off the late payment list. If you work with the same client over and over, when they log in to view their invoice they can also view past invoices, payments and any other outstanding payments they need to make to you so it helps both parties to stay organized and on top of things.
Everything you need to know about your dealing with a particular client are available instantly
So that’s invoicing in Freshbooks in a nutshell. It’s quick, easy and produces far more professional looking results than I’d bet you are sending out to your clients at the moment. Not only does it help you get paid faster but I also believe that it projects a better image of success to your clients because they will: a) think it must be a really expensive service to use, which it is not! and b) understand that not only do you know how to take a good photo but you also know how to run a tight ship when it comes to the business aspect.
Keeping track of what you have spent on your business can be a painstaking task if you don’t have a good system in place. For years I used the ‘shoebox method’. Every week I would empty my wallet full of receipts into a shoebox and collect all the printed receipts from online orders off my printer tray. These would go into a box or large envelope and then I would tell myself, with increasing conviction as tax time loomed, that I would sort them once a month and enter them into a spreadsheet. In reality though the months would slip past and inevitably I would approach tax time with a sense of dread, knowing I needed to clear a week of my calendar to deal with all the things that had built up over the year.
FreshBooks provides you with a simple interface to add expenses and select which category they belong to. If the expenses are going to be billable to a client or project you can assign one and it will be available for automatic addition to their next invoice. Setting repeating expenses like monthly internet hosting is a breeze and you can attach a file to each expense, like a scan of a receipt or a PDF of a supplier’s invoice. I can’t underline enough how much more likely you are to stay on top of things when it’s all so easily laid out for you. The only gripe I have with this section of the service is that there’s no built-in way to deal with foreign expenditure so you’ll have to do currency conversions yourself if you’ve been out of the country or made an online purchase from an overseas store.
Since starting to use FreshBooks I have stayed almost entirely on top of my expenses and the front page quick reports let you view an interesting breakdown of your expense categories at a glance. What’s more, entering your expenses as you go means you are more likely to catch them all. Using the shoebox method leads to forgotten expenses and increased tax payments at the end of the year. Accurate and thorough expense reporting will likely save you much of the cost of the FreshBooks subscription!
Automatic Expense Importing – Connection To Your Bank
One of the most interesting newer features to the FreshBooks service is connection directly to your bank account. Currently they support more than 9000 US financial institutions and 61 Canadian ones. Speaking as a Canadian, I can say that this has almost everyone covered with the major banks and credit unions and with 9000+ in the US I’m pretty sure that ought to serve most other people. They are currently collecting (https://www.freshbooks.com/secure/expense-import/ )feedback from other international users to add further connection possibilities in the future.
You can connect any or all of your bank accounts or credit cards to FreshBooks, including a PayPal account. Once the connection is made, expenses will be imported automatically and on the import list you simply assign a category to each expense just as you would do when manually entering things. In many ways this does avoid my earlier gripe with a lack of ways to easily deal with foreign expenditure since the expense that is imported will have been converted to your local currency by your financial institution. For example, as a Canadian if I spend $99US at B&H Photo online, the expense will be imported as $101.56CDN which is an added bonus.
If you are careful to always use your business checking and business credit card for all your expenses then this is a foolproof way to insure that no expenses go unclaimed at tax time. Once the initial connection is made, expenses are imported every day and when you log into your account you will be greeted with a quick note to let you know how many expenses were imported and how many you still have that need a tax category assigned to them.
Time Sheets In FreshBooks – Click For Larger View
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Quotations or Estimates
Getting estimates to clients is no more fun than sending them invoices and for a long time I flip-flopped between using a ludicrously complicated Word document template, and just writing things out to people in e-mails. With Freshbooks though the estimate system is just as fast and simple as invoicing. You create an estimate that looks very similar to the invoices we saw earlier on in the chapter. You fill out all your line items and specify payment terms and any other details you need, then you click send. The client will receive an e-mail with a link to the estimate and at the top will be a button to accept the estimate or request changes. If they click the ‘accept’ button then you can be sure that they have understood the costs of your upcoming job, hopefully avoiding any issues down the line with someone telling you that this is more expensive than they were anticipating. Once the estimate is accepted, one more click of a button converts it into an invoice automatically.
Estimates or quotations appear similar to invoices and let you know what state they are at, in this case ‘Accepted’, meaning it can now be converted to an invoice and sent back to the client with two clicks.
One of my graphic designers uses FreshBooks to work with me so speaking as a user who has been on both ends of this service I can tell you that it’s also a great relief for the client to know that everything they expect to be done on a job is laid out neatly in a well presented estimate. There’s less likely to be any surprises for both parties involved in the process and happy, reassured clients are the only kind I ever want to work with! If you have a particularly lengthy set of specifications for a job you can always export the estimate as a PDF and append it yourself to the front of any job specs you have put together in a word processor.
The other great thing about using FreshBooks for your estimates is that it greatly reduces the annoyance that can arise when you don’t get the job. This leaves you feeling less stressed and more mentally prepared to move on to other things. I know It sounds like a silly little thing, but you shouldn’t underestimate the impact that small annoyances can have on your working day if they occur at a bad time. Often a client will ask several people for an estimate and if you’ve taken 30-45 minutes to put something together only to be told that they had to go with someone else, it’s hard not rue that lost time in your busy schedule. With FreshBooks though it will have only taken you a handful of minutes to create your estimate, potentially even less if it is a template estimate you have for frequently offered services like wedding photography packages. If your potential clients are seeking estimates from multiple photographers though, I’d also bet that the beautifully clear estimates sent by FreshBooks are going to give you an advantage over your competitors right away. They already know your photography is what they are looking for, now then also know that you run an organized and professional business.
A huge range of reports are available to you once you start entering in your invoices and expenses. Whenever you log into your account the front page gives you a brief overview of what money is coming in and going out that month, as well as recent activity like invoices that have just been opened by a client, or late payment notices that have been automatically sent.
FreshBooks can then take things a lot further and produce a range of detailed reports like Profit and Loss, Tax Summary, Expense Report, Revenue by Client and much more. You can even see an overview of how long it takes for your clients to pay you on average so you can begin to spot one than needs a closer eye or perhaps different payment terms to hurry them up a little.
All reports are available for printing or export to CSV and Excel files if you need to hand them off to a bookkeeper. Quickbooks, the popular accounting program used by many bookkeeping services, has an export option in beta testing as I write this so we should see it implemented soon. This will allow one-click export of your entire accounting of that year in a format that Quickbooks users can import just as easily. Your accountant will love you for having things in such good order!
FreshBooks overview window – click for larger view
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Mobile Management – Freshbooks Apps
Now that you know what Freshbooks can do for you and your photography business how would you like to be able to take all that on the road with you in your pocket on your next editorial assignment or travel trip? No problem. Freshbooks has an iPhone app, an iPad app and an Android app. Everything is a little more simplified in the apps, and obviously in-depth reporting was not designed to be used in that situation, but everything else is a breeze.
The built-in timer can be used to track time spent on work for a particular client or project, then automatically added to their time tracking sheet and invoice. New invoices can be created on the road in mere seconds and you can also input all your expenses, including taking a photo of the receipt with your mobile device’s camera. How awesome is that? Whilst you should always try to keep the actual receipt, it doesn’t hurt to have a backup, particularly on long trips where weeks and weeks of receipts can be hard to manage with 100% confidence. With an iPhone or Android phone in your pocket you can really stay on top of your expense list by inputting everything the moment you spend the money. No more sitting down once a month (at best) and sifting through a suitcase full of receipts and printed e-mail transactions.
FreshBooks Mobile Apps
First off you can try FreshBooks for FREE for 30 days with no credit card or commitment required. What have you got to lose? I’d love to see you take some immediate action from this article so at least sign up and take a look around for yourself. There’s even a free monthly plan that allows you to service your first client and for many people who are just starting out that’s a great start if you are working on a contract for one company. Once you want to take things further, monthly plans start at $19.95/month and there’s a 10% saving if you do what I do and pay upfront for a full year. For me the time saved just invoicing people and following up with unpaid invoices is worth the price alone. Throw in the expense management and it’s a steal of a deal. Importantly, FreshBooks also have a great online guide with detailed tutorials and videos. If you get stuck, they are just a phone call away and when you call them for help, a real human being answers the phone right away! No annoying call centers and automated systems. I love that!