Small Biz Test Lab: Freshbooks

TORONTO (TheStreet) -- Billing customers and collecting payments are some of the biggest chores for small-business owners.

Gone are the days when invoices were created and sent by snail mail. Now, it seems like everyone has jumped into the accounts-receivable game, from client management specialist NetSuite (N) (Stock Quote: N) to payroll services provider Paychex (PAYX) (Stock Quote: PAYX). Even giants like American Express (AXP) and Bank of America (BAC) offer billing tools.

(N) (PAYX) (AXP) (BAC) With all these sharks swimming around, there's plenty of blood in the water. Tax software maker Intuit (INTU) (Stock Quote: INTU) just paid $170 million to gobble up the Web 2.0 personal finance site

To find out what the remaining field looks like for small businesses trying to bill smarter, I tested FreshBooks, a Toronto-based invoicing service. It's free to start, but full-service packages run $150 a month. Most small businesses should expect to pay $29 a month.

(N) (PAYX) (AXP) (BAC) (INTU) What you get: FreshBooks is probably the simplest way to bill customers and do basic accounting.

(N) (PAYX) (AXP) (BAC) (INTU) FreshBooks aims to make billing digitally and tracking expenses easy. And from that perspective, the product succeeds. Tired of sending invoices using Microsoft (MSFT) (Stock Quote: MSFT) Word? Simply head to FreshBooks' Web site, enter some basic company information -- no complex tax data or sensitive details are required -- and in three minutes you will have a page with tabbed categories, such as clients, team, estimates and expenses.

(N) (PAYX) (AXP) (BAC) (INTU) (MSFT) It's easy to get started. Just enter your clients' information (the free edition only allows three). FreshBooks will prompt you to create an invoice. After you fill out the particulars, the service crafts a bill you can send by e-mail for free or by snail mail for $1.79, which includes postage and paper costs.

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