FreshBooks Pricing - why 2/10?

FreshBooks Review
ITQlick Score: 95/100
ITQlick Rating: (4.5/5)
Pricing: 2/10 - low cost
Category: Core Accounting -> FreshBooks -> FreshBooks pricing
Ranking:Ranked 4 out of 137 Core Accounting systems
Company: FRESHBOOKS
Pricing: starts at $4.50 per month
Typical customers: SMBs
Platforms: Desktop, Mobile, Cloud
Links: FreshBooks review, FreshBooks alternatives
Shlomi LaviShlomi Lavi / Dec 11, 2021

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What is FreshBooks's cost rating? (2/10)

Freshbooks comes with three basic pricing plans. These pricing plans are Lite (for professionals) at $4.50 month and $130.50 per year. Plus (for business owners) starts at $7.50 per month and $217.50 per year. Premium (for growing businesses) starts at $15 per month and $435 per year.

The Lite plan offers features such as sending unlimited invoices to 5 clients, Tracking limitless expenses, sending limitless estimates, Getting paid with credit cards and bank transfers, Tracking sales tax and viewing reports, and access to iOS and Android anywhere. The Plus plan offers all features in Lite with additional features such as Sending unlimited invoices to 50 clients, automated tracking of expenses, sending limitless proposals, setting up reoccurring billing and client retainers, running business health reports, etc.

The Premium plan provides every feature in Plus with additional features like Sending unlimited invoices to unlimited clients, Tracking bills and bill payments, Tracking project profitability, Customizing email templates and email signatures.

Expert cost research of this software cost rated FreshBooks 1/5 (where 1 is low-cost and 5 is high-cost), meaning that this accounting software is low-cost.

When comparing FreshBooks to its competitors, on a scale between 1 to 10, FreshBooks is rated 2, which is less expensive than the average Core Accounting software cost, read the article below in order to calculate the total cost of ownership (TCO), which includes: customization, data migration, training, hardware, maintenance, upgrades, and more.


Accounting & Finance Software Prices Ranges

An SMB size company should expect to pay between $0 and more than $4 for a base subscription of Accounting & Finance software. Additionally, the software vendors may include charges for extra features such as bill management, invoicing, and multiple currency support. The costs are usually on a "per month/per user" basis.

The price breakdown of accounting and finance software based on business size is as follows:

  • Accounting and finance software pricing for small organizations has a price range of $9-$40 per month/per user. Tally.ERP 9, for example, goes for $9 a month, although it has a one-time subscription starting from $630. Clearview Infocus costs $24 per month for each user, and SlickPie goes for $40 – Slickpie also has a free Starter subscription as well.
  • Medium-sized organizations would typically have to pay within the price range of $10-$45 per month for Accounting and Finance software. For example, FreshBooks charges $15 per month for its medium-sized plan; Sage 50cloud pricing goes for $45 per month, and MYOB Essentials for $14 a month.
  • Large companies can expect prices between $10 and $150 from Accounting and Finance software vendors. For instance, Xero charges $60 per month for its large plan, FINSYNC pricing goes for $45 a month, while QuickBooks Online large subscriptions start at $70 a month

Accounting and Finance software vendors have different prices based on the subcategories into which they fall.

Some of the accounting best of breeds software include

  • Financial Reporting Software This subcategory has a price range of $0-$70. For context, A2X for Amazon pricing starts at $19 a month; Wave Accounting is free across plans, and Cognos costs between $15 and $70.
  • Trust Accounting Software Trust Accounting Software vendors can charge up to $1000 for the software. For example, AdvantageLaw charges a one-time fee of $490, ESILAW 360 pricing goes for $65 per month, and MAUI cost up to $1000 for one month - MAUI has a free trial version as well.
  • Sales Tax software The sales Tax software has a price range of $50-$1500. Traxit costs $50 a month; Utility Software pricing goes for $85, and GreenGIST for a one-time charge of $1500. Intuit ProSeries has a plan which goes for $270 a year, and EcomTax for $19 per month.
  • Bookkeeper Software The bookkeeper Software would cost around $15 to $100, either monthly or yearly. For instance, Neat pricing goes for $100 a year, Veryfi costs up to $15 a month, and Botkeeper pricing sits around $99 a month.
  • Auto Dealer Accounting Software The subcategory can cost up to $200 per month or year. For example, QuickBooks Desktop Pro pricing starts at $200 a year, Abcoa Deal Pack costs up to $75 a month, and MotorLot pricing goes for $45 per month. Host books charge $10 a month, ARI costs $19 per month, and Frazer pricing falls around $55 a month.
  • Debt Collection Software Users can expect to pay $59-$239 a month for Debt Collection Software subscriptions. For example, Funding Gates AR pricing goes for $99, and My DSO Manager pricing starts at $59 a month, with other plans up to $239. Also, CollectMore charges a one-time fee of $6 for its software.

What is the cost breakdown of Core Accounting implementation?

When it comes to selecting Core Accounting tools, buyers are primarily concerned about the cost. In fact, it is the cost that determines whether a potential buyer would go with the product. True, there is no one-size-fits-all formula to determine the “worth” of a business application, but as a software buyer, you want to make sure you get the best value for your money, without having to dig a big hole in your pocket.

Understanding the exact price of a Core Accounting system isn't easy as the overall cost of software includes the cost of a license, subscription fees, training, customization, hardware, maintenance, support, and other related services. It's essential to take into account all of these costs to gain an understanding of the system's "total cost of ownership."

What are the typical Core Accounting pricing models?

There are primarily three common pricing models – Perpetual License, Subscription, and Commercial Open Source.

  • Subscription/Software-As-A-Service: - Relevant for FreshBooks
    Under this pricing model, the system is accessed over the internet, as opposed to installed on-premises. The payment is made either on a per user basis or subscription basis. Ideally, customers are required to pay a recurring monthly fee until a specific period for using the tool. Subscription pricing model is more common with Software-as-a-Service (SaaS) apps.
  • Upfront cost for customization and integration is less compared to perpetual license cost because there is not much flexibility with SaaS systems in this area.
  • Recurring cost is greater as customers are required to make monthly payments as a subscription fee. Additionally customers using premium support services must pay an extra fee.
  • All in all, the total cost of ownership in the both cases is almost the same and may span over a period of 7-10 years, though you may have to pay a higher perpetual license fee upfront. The total cost may vary from starter to mid range to enterprise level apps in both cases.
  • Perpetual license: - Relevant for FreshBooks
    A common pricing model for on-premise applications, perpetual license requires a customer to pay an upfront sum to own the tool or other intellectual property on-premises for a fixed term.
  • Upfront cost involves the fee for installation, customization, and integration with existing systems, besides perpetual license fee.
  • Recurring cost is low in this pricing model and may include the cost for updates, maintenance, upgrades, and patches. Some vendors do offer premium support services, which come for an extra price.
  • Commercial open source: Not relevant for FreshBooks
    The customer can acquire the system free of cost without having to incur any upfront license fee. As a customer, you’re solely responsible for the ongoing maintenance, upgrading, customization, and troubleshooting of the application to meet your specific needs. You are on your own for providing end-user support, since you are not locked in with a vendor-supplied system solution.

How much would it cost to customize FreshBooks? (and is it relevant)

If you need specific features in your system catering to your specific business requirements, the vendor will charge customization cost, depending on your needs and feature requirement. Ideally customization cost is more complex to calculate compared to licensing cost.

Some apps allow you to easily combine data from multiple sources, without any complicated query requirements, while some others can be embedded into different applications to provide enhanced reporting. If you seek products that support customizable dashboards and predictive analysis to identity possible trends and facilitate decision making, you may have to pay higher for all the customization features.

Additionally, the following factors may affect the cost of customization:
  • User interface changes
  • Configurable dashboards
  • Data elements required for tracking
  • Forms to collect additional data
  • Dashboard, management and operational reports that are needed.
  • Workflows and how complex they are
  • Forms to collect additional data
Here are some questions to answer: How much customization is needed? How many systems do you want to integrate to? Does your company work like industry standards or does it have its own customized processes? What kind of special reports are needed?

In order to calculate the cost of customization you can use the following estimates:

  • Minimal customization - integrate with 1-2 systems: $2,500
  • Standard customization - integrate with 3-5 systems: $10,000
  • Fully customized system - integrate with more than 5 systems: $25,000

Cost of data migration when migrating to FreshBooks? Relevant for FreshBooks

Most companies opt for data migration services from a vendor, which raises the cost of product ownership. If you choose to transfer data on your own, you can avoid paying the cost of data migration.
Data migration cost depends on the amount of data to be transferred, your current software, availability of migration tools, complexity of data, and gaps between the existing system and the new system.

If your data is stored in Excel spreadsheets, then it may incur you a lot of time and money to migrate data from Excel.
By involving a business services provider in data migration, you are asking them to offer additional services, for which you may have to pay extra.

As a rule of thumb the cost of data migration depends on how many records you want to migrate. Records can include the number of customers, invoices, financial transactions, products, versions, etc. Here is a list you can use as a rule of thumb:

  • 1,000 records: $500
  • 10,000 records: $2,500
  • 100,000 records: $10,000
  • 1,000,000+ records: $25,000

What is the cost of training for FreshBooks? Relevant for FreshBooks

As a buyer, you are required to pay extra for in-person training, though some vendors offer web-based solutions as part of the package. The cost may involve end-user training, video/self, group, department, and training the super users.

The cost is mainly derived from the approach that you select for your organization:
  • End-user training
  • Group/Department
  • Video /self
  • Train the trainer/super user

Here are some questions to answer: How many groups (different departments, usages, type of users) are needed?

In order to calculate the cost you can use the following estimates:

  • 1-2 Sessions: $500
  • 3-4 Sessions: $1,500
  • 5-7 Sessions: $2,500
  • 8-10 Sessions: $5,000

How FreshBooks pricing compares to alternative Core Accounting solutions?

When comparing FreshBooks to alternative systems, on a scale between 1 to 10 FreshBooks is rated 2, which is less expensive than the average Core Accounting cost.
Freshbooks competes with other core accounting softwares like Netsuite, Wave Accounting, Zoho Books, and Sage Intacct. We will compare them in specific aspects below;
  • Functionality: Freshbooks offers features such as Bank Reconciliation, Billing and Invoicing, Expense Tracking, Payroll Management, Project Accounting, and Tax Management. All its closest alternatives such as Sage Intacct, Netsuite, and Wave Accounting provide all available features in Freshbooks with the addition of CPA Firms, Fixed Asset Management, Purchase Order management, etc. Zoho Books provides all the features in Freshbooks except CPA Firms, Fixed Asset Management, Fund Accounting, and Payroll Management.
  • Customers/Industries: Freshbooks target accountants and business owners who are freelancers and self-employed professionals. The software also targets businesses with contractors and employees. In terms of customer base, over 24 million people have used Freshbooks worldwide. Netsuite targets industries in advertising and digital marketing agencies, consulting, education, energy, media and publishing, manufacturing, etc. Netsuite has been used by more than 27,000 customers such as the Second City, Quicken INC., and Land OLakes. Wave accounting targets owners of small businesses and solo entrepreneurs. Zoho Books targets freelancing accountants. Zoho Books is powering thousands of businesses such as Optimized Sense LTD, Instant Data Center, and Empire Aviation Group. Sage Intacct targets industries in manufacturing, wholesale distribution, professional services, chemicals, etc.
  • Cost: ITQlick expert cost-rated FreshBooks 1/5 (where 1 is low-cost and 5 is high-cost), meaning that it is low-cost when compared to its closest alternatives. Freshbooks starts at $6 per month and $108 per year. Freshbooks comes with a free trial. Zoho Books start at $2,700 per organization/month and $27,000 per organization/year. The pricing information for Sage Intacct and Wave Accounting is unavailable.
  • Cloud-based/On-premise: All the accounting systems mentioned in this review are cloud-based.
  • Popularity: Freshbooks has been in operation since 2004 with over 24 million businesses. Netsuite is under the parent company Oracle is a publicly-traded company (NYSE: ORCL) operating since 1977 with 18,000+ customers. Wave Accounting has been in operation since 2009, and Zoho Books since 1996. Freshbooks is more popular than the other alternatives.
  • Scalability: Freshbooks can accommodate small businesses owners and self-employed professionals. Netsuite can accommodate small, mid-sized, and rapid growth businesses. Zoho Books can accommodate small to medium-sized enterprises.
  • Support: Freshbooks and Zoho books provides customer support features such as Email/Help Desk, FAQs/Forum, Phone Support, Knowledge Base and Chat. Freshbooks and Zoho books do not provide the 24/7 live representative feature. Sage Intacct and Netsuite provide all the customer support features needed for customer satisfaction. Wave Accounting lacks customer features such as Phone Support and 24/7 Live representative.

How can the team at ITQlick help?

The science of TCO (total cost of ownership) may not be easy to calculate. If you seek to get detailed info about the TCO, get in touch with ITQlick experts. Contact us today and get up to date, detailed quotes.

Author

Shlomi Lavi

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Shlomi holds a Bachelor of Science (B.Sc.) in Information System Engineering from Ben Gurion University in Israel. Shlomi brings 15 years of global IT and IS management experience as a consultant, and implementation expert for small, medium and large size (global) companies.