Since the earliest days we’ve reached out by phone to survey FreshBooks customers and understand the benefits our service delivers. One of the first things people told us was “FreshBooks has changed my behavior”. To this day this comment scares me - bad software changes behavior. Inevitably though, the next thing they’d say is “now I send invoices as I do my work because it is so fast and easy - I don’t put it off till the end of the month anymore”. This insight still blows me away.

I call this changed behavior “continuous invoicing” and it has some amazing benefits:

1. Get Paid Faster - think about it. If it is mid-month and you just finished a job and you wait until the end of the month to invoice, you are going to send the invoice two weeks later and therefore get paid two weeks later. Contrast this with sending the same invoice right away, and you get paid two weeks sooner.

2. Collect More Money - if you invoice soon after completing your work, your work is fresh in your mind you will invoice for more dollars. When you wait to invoice you tend to forget some details. On top of this everyone undervalues their own services, and this effect increases over time. Between these two things you will wind up billing for less. Everyone will - it’s human nature. So, invoice immediately and you will bill for more money.

3. Improved Client Relations - when a client receives an invoice soon after their job is completed, the value you offer will be fresh in their mind. If you’ve done a great job (and we trust you always do!) that great work will be top of mind in your client’s consciousness. As a result they will get right to the process of paying you. When you send an invoice 2-3 weeks later, the context of your great work is lost and may seem far away to to them. So, invoice early and make them happy to pay you.

These are the benefits of continuous invoicing. Looking for a painfully cheesy catch-phrase that’s worth it’s wait in gold? “Remember folks, invoice early and invoice often.”

Once upon a time there was a disorganized web designer who worked from home and used Word to create his invoices. This web designer found he was spending too much of his valuable downtime wondering who owed him money and how much…it was a stress on him and a waste of energy.

Then came the day the web designer went to send an invoice to his client. In creating a new invoice (using an old invoice as the template) he forgot to rename the file and saved over the original invoice. Upon realizing what he had done he snapped saying, “I’ve had it – there has to be a better way”.

This fateful day happened in early January 2003, and the web designer spent all his spare time the rest of that month building a web application his clients could login to to view their invoices - something that looked professional and would tell him which clients had looked at their invoices so he could save time following up with people en route to collecting his money.

Today that service is called FreshBooks and in case you haven’t guessed it, that web designer was me. I’m pleased to report that FreshBooks is now publicly available and is used by over 300,000 people. We’ve built a business solving our own business problems, and the good news is, we’ve got more problems to solve.

That’s today’s FreshBooks history lesson. As an entrepreneur I find it’s good to recall your history from time to time to remember why you’ve chosen the road less traveled and to remind yourself that the way you see problems - because it’s a unique perspective - is hugely valuable. Thanks for reading.

How do I start accepting credit cards online?

That’s a very common question everyone here at FreshBooks hears from people calling and e-mailing in. I’ll try answering the best way I know how: through a little question-and-answer session.

Here are the questions we usually ask someone who calls in:

1. Where are you based?

If you’re in the USA—you have a lot of options. Canada—you have a few options. The rest of the world—sadly, very few options. If you are outside of the United States or Canada, we usually skip to recommending PayPal and leave it at that. There are more options, but FreshBooks doesn’t support them yet. We hope to soon, but in the meantime, PayPal is your best bet.

2. Do you already have a merchant account?

Or more to the point, do you even know what a merchant account is?

A merchant account is essentially a bank account that handles your funds received via credit cards. They normally take a percentage off of every transaction. This is called a “discount rate.” If you have a storefront or a retail business and you are swiping people’s cards, then you already have a merchant account.

If you want to start accepting payments online, you’ll need to give your merchant provider a call and ask for an Internet merchant account—this is different from a regular merchant account, because it gives you the ability to process credit cards without the card being physically present for the transaction.

3. If you do have a merchant account, do you already have an account with a payment gateway like Authorize.net or PayPal?

If so, chances are you already know what you’re doing and you aren’t even reading this article. If you don’t, then you can read on and I’ll give some more details on what a payment gateway is and what the options are.

A payment gateway is kind of like the middleman between your customer and you or your merchant account. They normally have a merchant login where you can manage your account, run reports, submit refunds, and even send invoices. None of them have the advanced capabilities of FreshBooks, but if you run a retail business or a storefront and all you want to do is send one invoice online and get paid, you can probably do that directly through your payment gateway. (We’re all about honesty here at FreshBooks!)

Of course, if you want to start managing all your invoices, keep track of everything and get paid faster, then you can use FreshBooks in conjunction with a payment gateway.

Payment gateways usually charge a monthly fee (PayPal is the only exception) and sometimes a setup fee. Many of them also require an online merchant account, but will usually help you get one if you don’t already have one.

Here are your options when it comes to payment gateways:

PayPal

The big daddy of them all. PayPal is incredibly useful and powerful and scary at the same time. The standard offering is free to use and provides any very small business that wants to quickly accept payments online a near-perfect solution. You can read all about PayPal from any number of sources. They have a number of offerings that work with FreshBooks:

• PayPal Standard: This is the basic PayPal account. To start collecting on your FreshBooks invoices with PayPal Standard, you just need to enter your PayPal ID in your FreshBooks settings. When you send an invoice, there will be a link to pay and it will take your customer to a confirmation page that shows the total amount and provides a link to PayPal. Your customer then clicks that button and follows the instructions on PayPal’s site to pay the invoice. After they complete their payment, they must click “Return to Merchant,” at which point they’re directed back to FreshBooks and your invoice gets updated as “paid.” You can see a demonstration of this entire process in this blog post.
• PayPal Payflow Pro: This is PayPal’s new offering, which they recently purchased from VeriSign. It is a fully functional payment gateway that you can use with FreshBooks to collect one-time payments as well as automatically charge your customer’s credit card. Payflow Pro requires you to obtain an Internet merchant account. It has proven to be a very flexible solution and gives you all the features you’ll ever need in a payment gateway. The service has not been as reliable since PayPal took it over, but it’s still top-notch.
• PayPal Website Payments Pro: I’m not sure of the history behind PayPal Website Payments Pro (let’s shorten it to PayPal WPP so I don’t get a cramp typing this article), but I think PayPal created this service before they decided to purchase Payflow Pro from VeriSign because from the customer’s perspective it is almost identical. It provides all the same functionality, except that you don’t need to go out and get a merchant account. This is advantageous if you don’t like paperwork and/or your business is fairly new. Getting a merchant account can sometimes take some time and they make it more difficult if you are just starting out. Some of the downsides for FreshBooks users is that it is only available in the USA (the UK version is just a re-badged version of Payflow Pro). It is also controlled by PayPal and they won’t let you send recurring transactions, so you can’t use it to automatically charge your customer’s credit card.

That pretty much covers their offerings; you can read more about PayPal here. They also have something called Express Payment that is available if you have WPP, but express payment is just PayPal Standard on steroids. It will provide more consistency, but it still requires your customer to have a PayPal account.

Authorize.Net

Authorize.Net has built a very good reputation as the leader in online payment gateways for small business. They have a great solution with a no-nonsense gateway that just works. They provide a more direct solution than PayPal Standard, allowing your customer to seamlessly pay you with a credit card without having to leave your FreshBooks account. This offers a completely branded payment experience for your customers. Authorize.Net’s prices are reasonable and from what we have experienced, their service is great. When you refer people to sign up to a payment gateway, no news is good news; we’ve received largely positive feedback from new customers getting going with Authorize.Net and existing customers continuing to use the service.

Get a discount on Authorize.Net services by signing up through us.

The rest

FreshBooks has integrated with a host of other payment gateways. A select group of them are capable of handling automatically charging your customer’s credit card on a recurring basis. They include: Landmark (a smaller provider with excellent rates and easy online signup), Payment Processing Inc. (a U.S.-based service that actually purchased what was formerly a Canadian gateway, Paradata), iTransact (a larger gateway that also has a good reputation from our standpoint because we haven’t received any complaints), Linkpoint (ditto to iTransact), PSiGate (a Canadian gateway—yaay Canada!—they are a great solution if you are a Canadian business).

The outliers

A special payment gateway that doesn’t actually process credit cards is Electracash. They can enable you to collect your payment with something called an eCheck on the U.S.-based ACH (Automated Clearing House) network. This is a cool service, but be warned it doesn’t work for Canadian businesses, and they usually insist on holding back a certain amount of money for a designated time period until you become a more trusted merchant. Authorize.net and PayPal Payflow Pro also process ACH payments, but they will still charge a percentage instead of the low per-transaction fees Electracash charges.

The final one worth mention is 2Checkout.com. To be honest I don’t know much about 2Checkout.com, except they seem to be very simple to get set up and will work with very small businesses much like PayPal. They also offer their services to countries outside of the US and Canada.

In conclusion

I am a big believer in giving your customers an easy option to pay you because any barriers to payment you can remove will increase your cash flow and that is arguably the best thing you can do for your small business. If you want to get going immediately, PayPal is a great place to start. If you are ready for the next step, then take your pick of payment gateways that work seamlessly with FreshBooks.

If you are thirsting for more knowledge, check out the FAQ inside our help manual. Good luck, and happy collecting!

In this ongoing series, we’ll demonstrate why FreshBooks is the smarter, faster alternative to small business accounting software.

How to create an invoice: four easy steps

FreshBooks has always been great for e-mail invoicing and time tracking, and this week we unveiled an all-new interface to make things even easier. To highlight our brand new design, we want to show you exactly how to create an invoice, from start to finish.

You can even e-mail the invoice to your client when you’re finished.

Watch how easy it is to create your first invoice!

1. Add yourself to FreshBooks

First, go here and add your company to FreshBooks.

Don’t worry, our free online invoicing service doesn’t have any silly time limits or missing features! We let you try everything at no cost.

Just enter your company name and e-mail address, and you’re ready to get started.

2. Enter your company’s information

The first thing you’ll see is your one-time setup page. This is where you enter the address that will appear on your invoices, and the currency you’ll be working in.

When you’re done, we’ll ask you what you’d like to do first. Go ahead and choose “create a client.”

3. Add your client’s details

Just enter your client’s name and e-mail address, and let us do the rest. If you’d like their mailing address to appear on the invoice, be sure to put that in there, too.

Now go ahead and save your client. We’ll let you know if anything needs to be changed.

Assuming all is well, you’ll immediately be asked what you’d like to do next. Choose “create an invoice,” and you’re nearly finished.

4. Create the invoice

Now for the fun part—getting paid!

Go ahead and enter the charges on the invoice. Each line gets a description, a quantity, and a unit cost, and you can have as many lines as you want. We handle all the math for you, so once you’re done entering the charges, just choose “save as draft” at the bottom of the page.

Take a look at the “print preview,” and voila—

Your first invoice!

How easy was that? Go ahead and print the invoice, because you’re all done.

With one more click, FreshBooks will even e-mail the invoice to your client, or send it to them through the postal service. The choice is yours.

Online invoicing is fast and easy with FreshBooks!

If you’re still creating invoices with Word, Excel, or some enormous accounting package, be sure to try FreshBooks! We’ve already got thousands of happy users, and we’re sure you’ll love it too.

Remember, it’s completely free to try, with no time limits and no missing features. So what are you waiting for? Create an invoice for yourself, and you’ll see just how easy it is.

Happy invoicing!

Today, I will share a tip on how to categorize anything from estimates to support tickets in your FreshBooks account. The benefit to categorizing various objects inside your account is to allow you to quickly display information that is useful to your specific business.

Here’s an example. Let’s categorize clients by importance. You can add categories to your clients or other FreshBooks objects when you create or edit them. Let’s edit an existing client and add some notes.

In the above image, I have added the words “Very Important” somewhere inside the Notes fields for two clients. Now that I have categorized these two clients, I can look up these two specific clients at any time in the future by doing a quick search on that category phrase.

This concept can be applied to invoices, estimates as well as other FreshBooks objects that have the search function available.

For example, you can add your staff’s name to your invoice notes such as “Assisted by: Daniel”. Next, you can bring up all invoices that the staff member Daniel worked on by searching on “Assisted by: Daniel” with your invoice search tool.

I hope this helps. Please leave me a comment if you have any questions.