Mike McDerment launched FreshBooks about 11 years ago after having an invoicing disaster.Katherine Scarrow
This series looks at technologies that will be game-changers for small business, particularly firms whose staffs are highly mobile and where travel is part of the game.
These days, if an invoicing program isn't automated, it's unlikely that a small business or sole proprietor will use it. Forget Excel formulas, it's about seeing your billable time, recording your expenses and sending invoices, all with a phone. Welcome to the mobile billing department.
Karen Geier is a digital and social media consultant, a writer and the co-founder of an event-planning startup called Shyndyg. She has no time to sit down and figure out her accounts when she could be out meeting clients. Recently, she asked on Facebook for accounting suggestions and, after researching, she went with Toronto-based FreshBooks.
"I have an accounting program that I was using, but it was too manual," says Ms. Geier, who likes FreshBooks because she believes it's easier to use, has all the tools in the cloud and allows her to send invoices from her phone. She also makes use of the billing tool.
"I use their expense importing feature that syncs with my bank account and credit card, so I can see what my billings versus expenses are at a glance, and also I can add those items directly into invoices with one click. I also use their timekeeping service for jobs where I bill by the hour."
Mike McDerment launched FreshBooks about 11 years ago in the basement of his parents' home. For Mr. McDerment, co-founder and chief executive officer, invoicing was a pain that had caused a fateful crisis, as is documented on FreshBooks' site. He inadvertently lost an important invoice when he saved another over top of it – a mistake that inspired the creation of FreshBooks.
The tool was first built to manage invoicing and tracking for small businesses. "The pain is around creating invoices, sending invoices, following up with clients, collecting payments, updating their books," Mr. McDerment says. "And one day they realize it's painful every single month and they have to make it stop, so they go and find something. And then they find us."
FreshBooks, a Toronto tech startup that has grown to 110 employees and more than five million users worldwide, isn't the only accounting application. Wave, Mint and Nutcache are also strong competitors and there are dozens of other options available for small businesses. While all offer similar pricing structures ranging from the free trial offer to approximately $25 for up to 10 clients, a user's choice often boils down to ease of use and word of mouth recommendations, as with the case of Ms. Geier.
FreshBooks allows new users to invoice up to three clients free to try the product. After then, the pricing structure begins at $19.95 (U.S.) a month for up to 25 clients and $39.95 for an unlimited number.
In the past few years, it has expanded to include time tracking for hourly billing, expense tracking and reporting, credit card and other bank account integration and collaboration tools. The app, available on Android and through iTunes, lets users take all these tools with them, complementing a mobile office.
CPA Practice Advisors, an online resource for tax and accounting professionals, calls FreshBooks one of the easiest apps to use, saying users with "no financial background can create, distribute and collect invoices using this tool with almost no training."
Corey Herscu, whose HerscuPR public relations firm focuses on emerging technologies, is fan of FreshBooks. He wanted a tool that could tell him how his budding business was doing.
"[I was looking for] a cost-effective, easy-to-use way to keep track of day-to-day expenses. I also wanted to see where my money was going in real-time, so I could adjust budgets accordingly to be as lean and focused as possible," he says. "It also helps that it allows you to see what money is coming in and what is overdue for forecasting.
Ms. Geier looked at other accounting tools but found that she couldn't find answers as easily as she wanted. "Someone told me about Wave, but I didn't find some of the answers easily about why they were different from FreshBooks, and knew many more people who had success with FreshBooks to ask questions." Mr. Herscu reports a similar experience, saying Wave wasn't as intuitive as he would have liked.
Mr. McDerment says that's how they get a majority of their clients. "For people who have that pain, they ask someone they know what they use and that's how they come to us."
For some, relieving that pain makes using an accounting and invoicing app worthwhile. "It's so straight forward that there is no learning curve involved," Mr. Herscu says. "I get piece of mind knowing how my business is moving and where I need to focus my attention on. I also end up making money off it because everything is accounted for, I don't miss any expenses or accounts owing."
For Ms. Geier, it keeps her accountant happy. "I like that I can add my accountant to the software easily and that it keeps track of my taxes collected and remitted automatically."
That beats giving your accountant a shoebox of receipts in January.
Follow us @GlobeSmallBiz, on Pinterest and Instagram
Join our Small Business LinkedIn group
Add us to your circles
Sign up for our weekly newsletter