Now we get to know about a review of freshbooks in 2020, not the best year so far but you’ve decided that either you want to start a business or you want to get more organized with your business and you know you want to be able to streamline things a service like freshbooks certainly can do that, for you one of the things though that we’ll be talking about that we do think refreshbooks fall short a little bit is what you’re looking at right here, so this is a payroll matrix and you’re probably wondering like oh I’m self-employed I’m not worried about payroll well you should be if you ever plan on making more than 50 000 in your business and then we’ll explain why we ended up not using fresh books for what doing in our business because of that but before we get to that we just wanted to kind of run you through as far as set up what it looks like in the dashboard to be able to move through things on freshbooks really quickly you can sign up on the screen right here really simple signup process one of the nice things too didn’t even ask me for a credit card it’s more of a 30-day free trial you can kind of get into it see if it works for you and then decide if it’s something that you want to continue with one of the other nice things is pricing for freshbooks if you have a very small business you’re not invoicing a lot of clients you can start out very inexpensively on freshbooks and then once you get in what you’re going to do is you’re going to set up your dashboard and you can get your total profit revenue stream spending and all that but really everything starts up here so you’d add your clients on your retainers invoices or other incomes once you add the client that’s kind of like the foundation of everything that’s where everything’s going to be working out of what we mean by that is like let’s say you’re somebody who tracks your time hourly like a graphic designer would once you have the client in there what you do is you would pull up that client you can put them in there you can add the service you’re doing for them and actually start the time tracker which we think is pretty slick that they have this built into the service because if you’re somebody who’s already using a separate time tracker a lot of times it’s hard to make that integrate with however you’re doing invoicing and to be able to use the time tracker and then immediately be able to fire off an invoice or at least you know tally it for the week and then generate an invoice from that that you do but again you know it makes a lot of sense you have projects that you can kind of manage from what I’ve heard we don’t do a lot of project management and there’s so many different services out there this is another one of them but you have like you know asana base camp trello Monday there’s so many of them we have heard from some friends that really like Monday maybe you’ve seen a ton of ads from them we know they do a lot of YouTube advertising um but it’s a good service with freshbooks ,if you have a very simple business.
Now going back to this payroll matrix now why do we have this?, what is this ?we’re going to get into the weeds a little bit, but I think it’s important for explaining why we didn’t use fresh books because of the information on this page all the resources that mentioned we will have links for in the description not affiliated with this guy mark kohler he’s actually somebody that we connected with at a former job really bright guy who’s an accountant an attorney both things , not so you know we are taking his information and giving you his information so the reason why you would do an s corp all right we ‘ve highlighted it here and the reason for that is if you’re somebody who’s self-employed it’s just you you have a dba what’s happening is when you were at a w-2 there was a 15.3 self-employment tax it was kind of split between you and the employer so you didn’t pay all 15.3 percent of that we apologize, we don’t know offhand think it’s like usually like seven percent maybe that you would have paid and the employer is paying 80 but basically when you become a sole proprietorship whether or not you have an llc and now this is a common misconception an llc does not help you with taxes at all it does nothing for taxes, it is a limited liability corporation company again not accounting attorney but the purpose of an llc is to protect you right it protects your assets it draws the line between your personal assets and your business assets, but if you are a dba a sole proprietorship and that’s how you’re set up as a dba you’re going to get killed on self-employment taxes, so a cool a little tool over here on ink file if you’re not familiar with them they’re kind of like legal zoom just cheaper they don’t cost as much to kind of get incorporated they have this cool tool here so what you can do is you can say all right what is my annual income so let’s say your net income you plan on being we’ll go with fifty thousand dollars now what is the salary you would pay yourself well we don’t know right well that’s what that matrix is explaining so to explain this a little bit better when you set up an scorp is just a different business entity from a dba you become an employee of the company and then you can also take draws from the business and now the reason you would do that is again that 15.3 percent tax the self-employment tax so over here 168 00:04:50,880 –> 00:04:51,280 forgive me we talked about taking fifty thousand dollars is the net income what this is showing us is you’d go at fifty thousand dollars you go up the line and he’s saying that about twenty five thousand dollars is a reasonable amount to pay yourself on payroll.
Now what we see what we mean by reasonable amount is like you can’t pay yourself like a dollar and then do everything withdraws the reason for that is with the draw that you take from the business the end of the year what’s left over for the net income that is not going to be taxed as much on the self-employment tax so at 50 000 you would give yourself a 25 000 salary and then what you can go down is normally as a sole proprietor you would be paying this in taxes as an s corporation you’d pay this and that’s what you’d save is 3825 a year as an s corp so sometimes people don’t want to get into the messiness of setting up an s corp because it sounds confusing and frankly it is a little confusing and as we were telling you wasn’t lying it’s got kkos lawyers one of them being kohler right and this is my as s corp record of books all this stuff we mean it’s we not gonna lie it’s a little bit of setup but they did everything for us again,if you were to go up to a hundred thousand dollars of income and we go over here he’s saying about a forty thousand dollar salary would be appropriate so why don’t we get that dialed in you’d save eight thousand four hundred sixty one dollars a year using an s corp as opposed to a dba now going back to fresh books freshbooks they do have a service for payroll it’s kind of hidden away over here you can notice it’s not even on the left-hand side but what they do is they connect into a service called gusto and this is where we kind of start seeing red flags because we don’t know about you,you’ve worked with different services and they tend to get a little bit frankenstein right so freshbooks originally started out as an invoicing service and then they started adding different tools to it and when you’re adding you know the time tracker that makes sense because it’s all stuff that they own and operate but when you start connecting to outside companies that’s where we feel like that’s where you start to get glitches and issues a good tool again we was looking at this for their pros and cons was pretty good and what we liked about it is you could you know filter it down we like looking at people who gave it like a seven to eight star rating because they’re not like just like it’s a ten or they’re not like this is the worst thing ever the outliers we never trust their opinion but we filtered it down and you can kind of see some quick pros and cons.
Here one of the cons we think that we highlighted here would be nice if they interface with quicken or Quickbooks, so what we ended up doing was going with Quickbooks, and there were a couple of reasons. One of them is let me see if we got this pulled up here, so they have a pretty good simple start program. Don’t pay attention to this 1250 a month pricing. It’s 25. It’s 12.50 for like three months, and then it goes up right, um. Still, they have a payroll that you can add to it; they said it’s 70 that’s with um that simple start program and QuickBooks plus four dollars a month per employee, so for 74 a month, what we are doing right now is we have all the accounting for our business. Still, we also have payroll because we set up as an s corp and through the business and do that all through QuickBooks, but if you’re anything like us. We got into Quickbooks, and we like what the hell is going on like. We are not an accountant so what we have highlighted here is you can see what we have right now Quickbooks simple start and then the online payroll and this payroll pricing; if you’re curious, my accountant told me she’s like you might want to check out ADP or paychecks um they’re kind of like the two big names in payroll we called ADP, and we called paychecks.
Paychecks ended up giving me a quote for about a hundred dollars a month to run payroll and for the fact that we could get it in quickbooks for about half that price um it was a lot easier for us and one of the things we would suggest if you do go this method is we did a 50 one time setup call and this was cool because what happened is we got a phone call from a quickbook pro advisor and what she was able to do was take control of my screen with my permission and she would just be like all right um we want you to click on this find out more button and we just see a red box go around it and we click that and she walked me through all my chart of accounts and how we are going to categorize my expenses and she was just doing all this stuff for us it was really neat to be able to see that done um on the and it was a 45 minute call it was worth all 50 easily and one of the other reasons too that we decided to go to quickbooks over freshbooks is familiarity with your account of course if you give your accountant just all your information you’re exporting it they know how to look at that information to be able to tell you what they need to do but the thing with these services is looking over your fresh books we can go to our team and you can invite and you can add your accountant so they can go in but freshbooks hasn’t been around as long and there’s a good chance your account is going to be less familiar with this service than they would with quickbooks and to take it up to another level um quickbooks offers a couple different services this one is their live full service bookkeeping 200 a month a little bit outside of what we need right now my my business is pretty simple but if that’s an option that you’d be interested in for 200 bucks a month .
You’ll have a quickbook pro advisor that will actually run things for you but what we are actually looking at um let’s see we think have set up here is that you can find a pro advisor so we are in new york and you can see that we can see the review she’s 102 this is actually a person that we are going to be um having a call with in the coming weeks and you can find somebody who not only is an accountant and can do your bookkeeping all those things but that is exceptionally well versed in the service so if you’re going back to freshbooks you’re not going to have like all these accountants all over the country that will be able to just kind of jump into your system and be able to run things for you but when it comes to quickbooks you can find a pro advisor and you get somebody that’s well reviewed and they’ll be able to go in and kind of work on your books ,so we know we kind of worked around this in the long way but when you’re looking at it really it comes down to these two things for us is the reason we didn’t go with freshbooks is because our business has gotten to a point that we needed to set up this s-corp and again fun times but we are doing that because we don’t want to get killed in that self-employment tax and again you can just kind of play with this fantastic little tool . We try to be as transparent and honest with these reviews as possible this is indeed what we went with because we were comparing QuickBooks and Freshbooks, and we decided to go with QuickBooks.