How FreshBooks Helps This Creative Agency Prevent Cash Flow Challenges

Company: Barton Interactive

Industry: Digital Marketing

Location: Chagrin Falls, OH

Problem:

Chasing clients for payments

Solution:

4 hours saved invoicing per month using FreshBooks’ recurring templates

Results:

FreshBooks’ automated billing features

Zack Barton launched Barton Interactive in 2012 and has been a FreshBooks customer and advocate ever since. FreshBooks has been his go-to accounting tool and an essential part of the growth of his Cleveland-area creative agency, whose clients include established brands like Eddie Bauer and the Vitamin Shoppe.

In the early days of Barton Interactive (and even before), Zack faced the same accounting challenge that plagues many service-based small businesses, regardless of industry: late payments from clients, resulting in cash-flow problems. “It was our biggest challenge,” says Zack, noting how one client took 2 years to pay up.

With the help of FreshBooks, Zack made key changes that solved these payment issues. Strategic tweaks in payment and billing policies combined with FreshBooks’ clever time-tracking and invoicing tools enabled Barton Interactive to regain control and bring lasting stability to its cash flow.

We spoke with Zack to learn more about how FreshBooks helps his agency create the consistent cash flow they now enjoy, and even develop a passive income stream that continues to strengthen their business.

How did Barton Interactive get started?

Zack: I got my first agency job in 2004, about 6 months before I graduated from design school. It was intimidating, but I was totally bent on getting really, really, really good at design and development. I would go home and study and practice more at night. I was there for 6 years before a San Jose-based business with a huge online shoe store (they helped start Zappos.com) stole me away.

I worked for them remotely from Cleveland for 4 years, during which time I started moonlighting for another agency. Pretty soon, that agency said, “We’ll give you as much as you can handle.” So I ended up telling the online shoe retailer, “I really love it here, but I think I should take this opportunity,” and I put in my notice. And they said, “Well, we don’t want to lose you, so we’ll become your second client.”

Pretty soon, I was growing my clientele and starting to do stuff for bigger names, like Eddie Bauer, The Vitamin Shoppe, and Skechers. I had more work than I could handle, so I had to build a team around me.

Today, I’m more involved in managing than being in the trenches. We do a lot of web design development, marketing, advertising, SEO, and branding. Over the years, we’ve had staff ranging from around 6 to 12 people working on-site in Chagrin Falls and our other location in Redding, CA, and a handful based remotely.

Your biggest challenge has been late payments. How did FreshBooks help you solve this?

Zack: A few years ago, we started hosting websites. It’s a nice regular stream of income, and in FreshBooks, we can set that up as a recurring invoice. The client just adds their payment information once, and they’re automatically charged that day of the month, every month.

It’s just fantastic that those payments are billed automatically and auto-deducted. I’ve been doing this for 21 years, and it’s been so valuable for our bookkeeping—we absolutely love that reliability in our cash flow.

Having that consistent income from hosting has been wonderful—it makes managing bills and income so much easier. It’s a wonderful feature. FreshBooks definitely helped us with that, 100 percent!

<blockquote class=”pull-quote”>Recurring invoices have been so valuable—we love that reliability in our cash flow.</blockquote>

How have you improved your cash flow—and how has FreshBooks’ time tracking feature helped?

Zack: We no longer work on flat rates. Instead, we look back at tracked time and bill for actual time spent on work. We’ve started doing progress invoices and sending out invoices on a semi-monthly billing date. So whether it’s a $500 project or a $50,000 project, we catch up on unbilled hours every two weeks.

That’s why the time tracking is so incredibly helpful. That specific feature is why we chose FreshBooks over QuickBooks.

The majority of work we do—around 90 percent—is by the hour. We clock our time in quarter-hour increments, and that’s how we charge. So we’re able to get into FreshBooks, have different projects, clock our time for different clients, and then do the reporting too. We fully rely on that.

It might sound like a minor tweak, but that change has made it so we not only survive but thrive.

What other FreshBooks features have surprised you?

Zack: I really love the automated invoice payment reminder emails that go out to clients at set intervals if they haven’t paid their bills. It’s great that we can set an automated late fee after 20 days of non-payment, too.

This is going to sound granular but changing our policies around proposals and work agreements has also been a game-changer for cash flow. If we don’t receive payment within 20 days of a client getting an invoice, we pause on any work we’re doing for them.

I love that there are simplified invoices. A lot of times, we’ll just do a super simple invoice with one line item and just a bulleted list of what we’ve done in the last billing period. The less time we can spend invoicing, the better. We’d rather be spending time on the work than billing for it.

Oh, and the reporting feature—it’s incredibly helpful because, typically, we’re sending out a dozen invoices in a day. Reports let us check all the unbilled time from the last month or two, get it all categorized, and check to see who needs to be billed for any unbilled hours. We don’t need to manually go in and mark things as billed—our clients can just click and pay right on the invoice through Stripe.

What made you choose FreshBooks more than a decade ago and stick with it this whole time?

Zack: When we started out, we had different spreadsheets and just kept things in emails. You can’t run a business like that. Initially, we had an account in QuickBooks and to be honest, I just thought QuickBooks was gonna be so good and thought, “How can you beat it? It’s just so big. It’s so popular.”

I didn’t like it. I really didn’t like it at all. In FreshBooks, there have been a couple of quirks here and there, but nothing major to stop us from using it. Now, we’ve been using it for so long that it’s nothing but, excuse the pun, “fresh.”

We did try some other solutions to see if we could find something better but found that we really don’t need to shop around, especially with the improvements and new features made over the years in FreshBooks. I really do recommend it and use it constantly. It’s just perfect for what we do.