Freshbooks and Shoeboxed: accounting mashup

by admin on March 3, 2009

in Featured,General,Innovation


Freshbooks today announced that it has struck a deal with Shoeboxed which will see Shoeboxed receipt scanning and categorization service added into the growing Freshbooks stable of integrations. Shoeboxed, has a tie in with Outright, the latest book-keeping service to make a splash, with which Freshbooks also recently partnered. The pitch is that Shoeboxed will export reclaimable receipts into Freshbooks for invoice creation with the rest held as deductibles for tax purposes.

Looking at micro business pricing, The current cost of the combined offering runs $23.95 per month ($14 FB, $9.95 Shoeboxed, Outright ‘free for now.’) How much this will rise when Outright declares its hand has yet to be reveased but it’s difficult to see them coming out for much less than $10-15/month and perhaps higher, given the service includes tax estimates. If I’m correct then micro business cost will run something $33.95-$38.95 per month.

shoeboxedThis is an exceptional deal, considering the overall service components that will not only help customers get paid but also help ensure they’re compliant. It won’t negate year end tax filing costs altogether but close enough that filers may feel confident enough to use free servives to polish off their affairs.That’s for the US.

The downside is that while Shoeboxed claims international status, it is a mail in service to the US and categorizes according to that country’s tax rules. US deductibles are similar to the UK but are not quite the same. Outright is clear that it is going after the US market first. The bottom line is that it is really geared towards that constituency.

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Freshbooks users

I called Freshbooks up on this point because it seems to me there is a risk that in adding in these providers without finding international alternatives it might alienate its non-US and Canadian customers. At the last count, Freshbooks counted 25% or 175,000 of its 700,000 new users as non-US and Canadian. Freshbooks wasn’t able to provide a definitive answer referring instead to Shoeboxed’s international status..

The difficulty is in knowing where Freshbooks might look for additional partners in territories like the UK and Australia, which account for 60% of the remainder. In the UK, a steady stream of new services are emerging and while we might like to think that our favourite service is only a mouseclick away, there comes a point where people want more.

So while Freshbooks is pointing the way towards a mashup model for the services it provides, I have to wonder the extent to which it is able to push its partners into international territories in which it plays. This will be a growing problem for both mashups and all-in-one providers as the saas market matures. Unlike client-server/on-premise applications, the saas providers are instantly accessible from anywhere in the world. But accommodating different tax regimes alone demonstrates that the world is anything but flat.

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Fresh Sunir March 3, 2009 at 11:55 pm

Hey Dennis, thanks for the write up!

I hear your concern for looking beyond the U.S. market. I know we feel the pain being Canadians trying to gain access to U.S. tools and services to test, or even use personally. And we normally never can get UK services, so that's really difficult. We were even delayed developing our iPhone app because the iPhone didn't arrive in Canada for a year.

But, it's early days right now. In the near term given the world today, the immediate problem is cost-effective growth, and for many companies that means focusing in your own backyard, especially if it is a large one like the U.S. or the UK.

And let me underscore the point: Selling at home is the Right Thing to do.

However, it's not the 1980s any more. One very lucrative path on the Internet is to grow into other jurisdictions. I have faith that in the medium term we will see these barriers falling, at least for some services. We can see that amongst certain payment gateways, for instance, who as a group are ahead of the rest of us by a business cycle.

So, we'll keep at it and we'll get there. It wouldn't be a worthwhile problem if it were easy!

Speaking of which, I'm always open to doing an integration with folks in any part of the world. You can reach me at sunir splat freshbooks.com

– Cheers, Sunir, Chief Handshaker, FreshBooks

Dennis Howlett March 4, 2009 at 12:03 am

@sunir – thanks for the feedback and yes – you are right about sticking to your own backyard. A year ago I'd have been less concerned than I am today. As someone said to me today – keeping up with the pace of change is getting increasingly hard. I'd re-emphasize though – this is a good deal.

Wayne Schulz March 4, 2009 at 5:22 pm

Dennis,

I looked at Freshbooks. Then looked again. And went back again.

I just couldn't make their billing work for me (consulting firm that bills hourly and annual maintenance).

While they have a pretty neat iPhone application that integrates real time with their billing software – what really scared me away was:

1. There wasn't any easy way to bill ALL of my clients in one run. My conclusion was that billing clients one by one is a nifty feature that just doesn't scale. I can't imagine my administrator having to go through and bill each client one by one – and Freshbooks (at the time I reviewed it) had NO easy way to view unbilled work in process. It had a decidedly mom and pop kitchen table feel to it the more you tried it.

2. At the time that I reviewed the application, Freshbooks had no ability (without using what seemed like obtuse workarounds) to accept retainer bills. Sure, they offer up all sorts of bizarre ways to get around this. See my comment #1 — workarounds are cute for mom and pop but don't scale to firms with multiple billers.

3. For some odd reason there was a requirement that each of my clients have their own project. For example I couldn't make one master project called "annual support agreement" and assign it to multiple clients.

Now admittedly a lot of the above issues also exist with competitors. As I looked around at other billing solutions there were applications that were far worse.

Unfortunately in the billing area it started to become apparent that when most people begin an online invoicing application they look around and borrow the "good ideas" from what's out there rather than what makes sense and scales.

Freshbooks = Cool application for mom and pop but doesn't scale beyond 3 or 4 timekeepers (and if they're doing any volume that's probably pushing it).

Just my .02

Emily Coltman March 4, 2009 at 7:09 pm

I've also tried FreshBooks – and decided not to use it for my billing.

Rightly or wrongly, I couldn't get my head round it. I daresay though it was more complex than I thought it would be, and too complex for a business like mine – a one-woman band selling services rather than products.

And one other thing that put me off was that there wasn't a facility to translate its US English terminology into UK English. Am I being too picky here?

M

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