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Goodbye Freshbooks, Hello Xero.
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April 13th, 2010UncategorizedLast year I discussed some of the tools I was finding useful for running my company. This post is an extension of that and discusses how things have changed now.
The biggest change is regarding finances, and how we handle them. Previously we had used Freshbooks for our Invoicing needs, and also used it to track expenses. This worked to a degree, but due to the nature of our revenue streams we had items that were ‘off book’ and we couldn’t account for them in FB, instead a variety of spreadsheets and other tools were needed to keep on top of everything.
The issue we were finding was two fold,
1) Proper tracking of all our revenue streams and being able to segment our expenses into P/L accounts with decent breakdowns, budgettng etc. [And not just things we had invoiced].
2) And how much have we spent, over time by category.It’s not to say that Freshbooks doesn’t work well. I could easily see how if you were a freelancer, and doing timetracking, and rebilling expenses to clients that it suits your needs. For us, we needed accounting details, and thought it was time to see what else was out there.
There are variety of SaaS web accounting packages out there, and the one we went for was Xero. A personal recommendation secured it, easily when it was referred to as ‘idiot proof’ - perfect for my needs.
Quite simply Xero allows us to have information about our bank accounts (including paypal), and set up automatic rules for dealing with transactions that are not Accounts Receivable/Invoiced based (i.e Google Adsense earning, users buying subscriptions, and clothing orders).
For FY11 we will be able to setup our budgeting, and have one or two views that really give us an overview into how the ‘business’ is running. All we want is for Kitecrowd to get into the black, and with Xero we now have much more of an idea as to what our core expenses truly are, and what those ‘one off costs’ of year one really amount to.
Due to Xero being able to handle our Invoicing needs, we will be dropping Freshbooks. It’s certainly worth a look though if you use other accounting packages, and l’d strongly suggest testing the market – only by trying things will you know what will allow you an effective workflow.
I’d also like to say how good the service is from Freshbooks, and Xero. A welcome from Xero, and an enquiry from Mike McDerment Freshbook CEO about what I was finding hard with expenses, and why I’m switching. So Mike, this is for you – you guys rock, and served my needs well, but you just at this moment in time don’t allow me to get enough information about how my business is operating.
On an aside, Xero can integrate with Freshbooks, but we are a small company, and can’t afford to be paying for two solutions that handle Invoicing/Expenses. When one of them also handles the rest of our accounting functions, maybe this will change in the future, maybe it won’t. Either way Freshbooks it’s been fun using you.
Tags: accounting, business, freshbooks, invoicing, small business, web accounting, xero
3 Responses to “Goodbye Freshbooks, Hello Xero.”
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Neil – thanks for the post and for your kind words. Sounds like you have graduated to the right product for your business at the right time – so congratulations on your graduation!
Xero is a great product for those that aren’t intimidated by accounting, and have move sophisticated accounting needs. FreshBooks is really all about billing – our mission is to get you paid (though we do a great job of bookkeeping for simple businesses as you indicated).
With respect to using both FreshBooks and Xero, it’s a great fit for our customers who manage teams or spend the bulk of their accounting time on billing and invoicing related tasks because that’s where we specialize and it just ends up saving folks time. We recommend it all the time and it’s backed up by a great team.
Anyway, thanks again and continued success with your new app!
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Well, congratulations on coming over to the dark side, I’m glad you’ve seen sense in the end – and well done for causing such a stir that both freshbooks and xero have taken notice.
Before moving to Xero about a year ago I looked into Freshbooks – In fact it may have been having after seeing FB that I decided to bite the bullet and the switch away from our previous package – I liked the big headline functions – basecamp integration, paypal payments, nice invoices – I does look amazing. However in the end it was just a little lightweight for where we were too.
I slightly disagree with Mike’s comment on Xero. Whilst it may well be a great product for those that aren’t intimidated by accounts, I’m completely intimidated by anything with numbers in it and it works great for me. Ease of use isn’t the decider though unfortunately – it’s functionality. I need something that’s going to reconcile, calculate Flat Rate VAT and give us an accurate Balance Sheet. If I was a freelancer, yes I might go FB, but now, between the two, there is not the choice.
Either way both apps have strong communities and clearly great support from top down [Adobe/Microsoft please take note]. And that is so important if you’re going to invest the time into using one of these.
It’s obviously a massively competitive area at the moment with new apps coming out each month. Whilst the big headline functions (Xero’s thing is automated bank feeds) will get people interested and signing up, functionality and pricing plans are going to need to be scalable for growing businesses not wanting to invest time and money migrating to-and-from different services each year.
And just to note, this photographic evidence of us at a Freshbooks party at SXSWi is clearly fake http://tinyurl.com/y2bq8vw (Hannah Montana is the only real person in this pic).
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Neil H
James,
I’d agree I think Xero can work well at a basic level of accounting, seeing the P/L, BS and where you are is incredibly important.
Being able to produce my financial statements and all is good for me, as well as being able to show future liabilities etc.
The tone from the top is great in both companies, and big thanks to Mike for personally responding. I’d agree with his point that timetracking in FB for multiple team members, being fed into invoices that then go to Xero is one logical way some people may chose to use the software.
After all, it’s all about what works for you, and your workflow. I’m at the point where Xero seems to my product.
Oh and SXSWi photo, if I don’t remember it happening, it didn’t – phototshop is really good nowadays!
