Because Freshbooks and QuickBooks have similar names, people often wonder if they are alternatives. The QuickBooks-Freshbooks difference question just came up in the LAB, in fact.

Despite the names and a few overlapping features, Freshbooks and QuickBooks are very different products. Here’s a breakdown of the differences, and when and why you should use each one.

Freshbooks

Freshbooks is timekeeping and billing software. Despite the books in its name, it doesn’t really do bookkeeping of any kind. What you can do is track your time and expenses, send customizable invoices to your clients by email or mail (Freshbooks even licks the stamps for you), and even take online payments, if you want to.

I’ve been using Freshbooks for years, now, and it’s by far one of my favorite things. It’s dead simple to use; you can be up and running in moments. Most of my business clients pay me a monthly fee, and Freshbooks makes it easy to set those up as automatic payments with my credit card merchant account. If I do anything extra for a client, it will also automatically add that expense to the invoice and charge my client.

The Freshbooks customer service is outstanding, too. If you call Freshbooks, a human being will answer the phone, and he or she will treat you like a human being and actually help you.

In all the time I have used Freshbooks, I’ve only run into one problem. When clients set up automatic recurring payments by credit card, Freshbooks doesn’t ask for their billing address, and there’s no way for the client to update the billing address when they pay their invoice. If I have it wrong in my system, it’s wrong for the transaction, so I’ve gotten a lot of address verification service bounces over the last few months. My clients have been patient, but it’s an ongoing annoyance.

Since the automatic recurring payments is a newer feature, I’m sure this just didn’t come up before. It doesn’t matter for one-time payments. And when I wrote to customer service, they agreed it doesn’t make sense not to let clients update their billing address. Hopefully, it will be fixed soon.

Freshbooks is hands-down the best timekeeping and billing software for small firms (say 30 or fewer timekeepers) I have ever used. But that’s all it does. If you want bookkeeping features, you’ll need something like QuickBooks.

QuickBooks

QuickBooks does bookkeeping* and billing, but has only rudimentary timekeeping and expense-tracking features. When it comes to small business (or small firm) accounting software, QuickBooks is the popular choice, for some good reasons.

For one, while it isn’t at all intuitive, it is pretty easy to use. For another, your accountant (and bookkeeper, if you have one) probably uses it, and QuickBooks makes it easy to just send a copy of your file to your accountant when it’s time to check up on your books or do your taxes.

I don’t love QuickBooks, but I use it for those reasons, and I don’t have any good reason to switch.

If you are a solo, you might be able to get by with tracking time in QuickBooks. If you aren’t, it’s pretty cumbersome to try to have multiple people entering time, because QuickBooks really isn’t set up for that. About the only way QuickBooks works for tracking time is if you have all your billers track their time on paper, and make just one person responsible for entering all the time at the end of the month.

Should you use both, one or the other, or neither?

I use both Freshbooks and QuickBooks. I much prefer tracking time and expenses in Freshbooks, and the slick online payment portal makes it really easy for clients to pay me using a credit card.

But for keeping the books, QuickBooks just makes more sense. My bookkeeper and accountant both use it, and it’s easy enough to use for my purposes.

That means there is some duplication. When I generate an invoice in Freshbooks, I have to account for that invoice in QuickBooks. I find it is actually a nice double-checking tool for making sure I got all the expenses right. For time, I don’t bother feeding the details into QuickBooks; I just put the total hours as a single line-item. It means that the duplication is pretty minor, and even serves a useful purpose.

Plus, it’s slightly cheaper to use Freshbooks for automatic recurring billing than most credit card processers charge.

Before you dive in to either, or, or both, consider whether practice management software might make more sense. Most of the old-school practice management software, like Time Matters (yuck) and PC Law include backoffice bookkeeping as well as timekeeping, and connect everything up to your clients and matters. Some of the newer (and better) practice management software like Clio does (very) basic bookkeeping, as well.

If you do have or decide to use practice management software, it’s probably better to stick with it for everything you can, instead of layering Freshbooks or QuickBooks on top and complicating things.

*Accounting is what an accountant does—and what many small business owners do, even though they should probably hire an accountant to do it properly. Bookkeeping is what the software is for.