Full Bonsai Bookkeeping Review – Is Worth It for Accounting?

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Managing finances can be challenging for new business owners and self-employed professionals. In this Bonsai bookkeeping review, we dissect what this highly-rated small business management and accounting app has to offer.

In the last few years, the number of self-employed professionals in the US (and worldwide) has soared like never before, and it’s vital that this segment of the workforce maintain clean, compliant books to avoid taxation hassles.

Luckily, Bonsai software caters to this specific category of users with powerful features to manage clients, organize projects, and track finances. It’s a CRM, timesheet, bookkeeping tool, and project management app all rolled into one—but how does it fare in our hands-on tests?

Read on for our in-depth review of Bonsai accounting.

Bonsai Bookkeeping Pros and Cons

Before we dive into our Bonsai bookkeeping review, here’s a quick look at its pros and cons and a realistic rundown of what you can expect:

Can Bonsai Do Accounting?

The company is a 2015-2016 Y Combinator startup based out of San Francisco. It picked up $120,000 in funding in 2016 to fuel product development and expansion. Not to be confused with embedded commerce company Bonsai, Hello Bonsai is an end-to-end small business and freelancer business solutions provider.

The platform has three modules: client management, project management, and financial management. It also offers hiring capabilities so you can onboard subcontractors for your projects.

You can also opt for add-ons like team collaboration and tax management to support your business as it scales. The data from all of these modules feed into the accounting system, helping you track your income, expenditures, and taxes.

It also provides several free tools, such as an online contract maker, a free invoice generator, and an interactive tax rate explorer.

Is Bonsai Finance Legit?

Bonsai connects with leading payment providers like Stripe, PayPal, and Plaid to process your transactions. These providers are certified as per the Payment Card Industry (PCI) standards and follow 2048-bit RSA encryption.

To prevent unauthorized access, Bonsai enforces two-factor authentication. Every time you perform a sensitive action involving the transfer of funds, you will have to enter a time-bound six-digit code that you receive on your phone.

Bonsai’s bookkeeping service (as well as its other features) is also very reliable. It promises 99.9% uptime, and its cloud-based platform lets you access bookkeeping and other business services on any device.

If you’re still wondering “Is Bonsai finance legit?” remember that it is vetted by the Federal Deposit Insurance Corporation (FDIC) and will insure your funds up to $250,000.

Bonsai Accounting Software Key Features

Hello Bonsai offers a wide range of features that allows you to create, track, execute, and bill projects in compliance with US tax rules. We tested these features for our Bonsai Bookkeeping review – here are the highlights:

1. Invoicing

Invoicing is an essential feature for any finance app, and Bonsai makes the invoicing process simple and frictionless. It includes 10+ free invoicing templates for different industries and employment types. Just choose a template from the library, enter your product/service details, and send it to your client.

Once the client receives your invoice, they can pay directly via the platform. The software will send automated reminders if the payment doesn’t arrive by the due date.

We also liked that Bonsai lets you withhold deliverables until the client clears the invoice. The deliverable is sent as an attachment with the invoice, which can be downloaded only after the payment is made.

Another nifty feature is the ability to create product/service packages so you can add them in a set to your invoice.

2. Payments

Bonsai lets you add payment links to the invoices you send from the app. You can choose your preferred invoice type (single, recurring, or subscription), and the payment will be configured accordingly. The software supports all major payment methods, including credit cards, Stripe, and PayPal.

Instead of sending an invoice at the end of a project, you can also ask for an upfront deposit.

We were impressed by Bonsai’s global payment capabilities.

Despite being a small business and freelancer accounting software, the company has left no stone unturned when it comes to currency compatibility. You can receive payments in 100+ currencies, letting you onboard clients from around the world.

You can configure the invoice in a manner that either you or your client pays the payment processing fee.

The fees for card payments are 2.9% + $0.30 cents, and for Automated Clearing House (ACH) transfers, they’re 1%, at par with industry standards. For example, WooCommerce’s Woo Payments system charges the exact same fees.

3. Bookkeeping

Bookkeeping is the process of recording all the financial transactions you make in order to monitor your incoming and outgoing payments, profit and loss, and taxes. Bonsai is an excellent bookkeeping app that lets you track your financial health with minimal effort.

You can connect the software to your existing bank account or open a new one within Bonsai. This allows it to fetch all your bank records so it can automatically classify your expenses.

Our Bonsai Bookkeeping review found this transaction classification feature to be extremely intuitive. As soon as a payment comes in, it’ll automatically label it with surprising accuracy. You can also immediately put your funds into buckets like ‘tax withholdings’ or ‘equipment upgrades.’

Based on your bookkeeping data, Bonsai generates useful data insights and reports. You can analyze your books to check your profit and loss for a specific period and also download important information (like expense deductions) as CSV files.

4. Taxes

Our Bonsai bookkeeping review revealed that while the app has a powerful tax management module, you’ll have to add it on for an extra charge of $10/month. This module allows you to import and organize tax receipts, estimate quarterly taxes, and identify write-offs.

Importantly, this feature of the Bonsai software is meant for self-employed professionals and not businesses. As a result, you get only income tax management capabilities and not sales tax.

It is designed to comply with Form 1099, an IRS tax form meant for self-employed workers. Bonsai will classify your business expenses based on 1099 categories like working space rent, hardware/software, ‘tools of the trade’ costs, commuting expenses, and sub-contractor labor costs.

Further, thanks to cloud-based storage, your tax receipts will be safely stored for the foreseeable future in case you have to undergo an IRS audit.

5. Business Bank Account

One of Bonsai’s most impressive features is its built-in bank account, which sets it apart from its competitors like FreshBooks, QuickBooks, and Xero. While many companies offer full-featured accounting software, you typically have to link it to an external bank account.

That’s not the case with Hello Bonsai. While it definitely works with all major US banks, the company partners with Evolve Bank and Trust to offer business banking capabilities.

When you receive funds on Bonsai, you can save the amount within the app. Bonsai will then classify your income and segment it into sub-accounts for taxes, savings, bill payments, and more. The bank account comes with a Visa debit card that you can use in any ATM.

When you make payments with your card, Bonsai automatically categorizes it to simplify bookkeeping. You can also upload a receipt for your expense and save it for later use during tax season.

Another useful feature we found was the ability to create ‘envelopes.’ These are virtual wallets that allow you to split your income into different segments to meet your personal and business-related financial goals.

Bear in mind that Hello Bonsai isn’t a bank, and your funds will be held in an Evolve account. Also, our tests showed that there’s a $300 limit for daily ATM withdrawals.

Currently, the business bank account is completely free, and you won’t be charged monthly or transactional fees or minimum balance penalties.

6. Template Library

While most accounting apps will give you templates (e.g., FreshBooks has templates for invoices and estimates), Bonsai has one of the most comprehensive template libraries we have seen so far. Not only do you have templates for invoices and quotes, but you also have industry-specific templates.

For instance, an architect can use the home improvement proposal template to onboard a new client, or a cleaning company can raise bills using the janitorial invoice template. Mechanics can even charge clients using templates for truck repairs, oil changes, and other common services.

Apart from invoices, the library has customer onboarding forms, questionnaires, briefing templates, agreement & contract templates, and proposals.

These templates are well designed and available in a variety of formats like PDF or PPT. You can add your custom branding; overall, Bonsai has more than 500 templates in its resource library.

7. Client Management

While our Bonsai bookkeeping review focuses primarily on its accounting and finance features, we’d be remiss, not to mention its highly capable client management module. Our tests showed that Bonsai’s client-centric features are closely integrated with its accounting systems, resulting in seamless data flow.

You can use Bonsai to:

Once you onboard a client, they can view all the relevant project information on a branded client portal. Here, they can upload files, approve or reject estimates, pay pending invoices, and more.

To share the client portal, you simply need to send them a client portal link. You can also preview what it looks like by clicking on “View as Client’ from any of your projects.”

8. Project Management

Like taxes, Bonsai supports collaborative project management through an additional feature called Team Seat, available for $10/month. Once your teammate is onboarded, they’ll be able to add billable hours to a project where they are assigned, which then feeds into your accounting system.

While some other accounting software like FreshBooks and QuickBooks support project management, they don’t come close to purpose-built project management tools like Monday.

Bonsai is built differently. Keeping most users’ project management habits in mind, it includes board views, list views, tasks and subtasks, timelines, assignments, and comments. You can benefit from the usual Kanban approach to managing projects.

It also has an integrated timer to monitor how much billable time is spent on a project.

Hello Bonsai Pricing and Plans

The Bonsai software is available in three plans: Starter, Professional, and Business. Unlike FreshBooks, the company follows a transparent, uncomplicated pricing model and does not offer custom pricing. Similarly, unlike Zoho, it doesn’t have a free-forever plan.

1. Starter

This plan is meant for freelancers and small business owners who are just starting out. It costs $21/month if you sign up for an annual contract, and monthly subscriptions cost $25/month.

The Starter plan gives you access to Bonsai’s full template repository, CRM, time tracking tool, and expense tracking system. We appreciate that even this entry-level plan lets you add unlimited clients and projects. For comparison, FreshBooks’ entry-level subscription supports only five clients.

2. Professional

This plan is suitable for growing businesses whether you’re a solopreneur or working in a team. It costs $32/month for annual subscriptions and $39/month for monthly payments.

By upgrading to professional, you’ll be able to remove the Bonsai branding from your interface and client portal. You also benefit from integrations with other productivity tools like QuickBooks, Calendly, and Zapier.

Another important feature you unlock is automation. Bonsai supports simple, trigger+event-based workflow automation, which you can use to execute common tasks. For example, when your client signs a contract, you can immediately send them a thank you message.

The only thing missing from the Professional plan is subcontractor hiring capabilities.

3. Business

The Business plan costs either $66/month (annual) or $79/month (monthly). Here, you will get all the features in Starter and Professional as well as the ability to add unlimited contractors to your project.

Subcontracting allows you to hire a third-party vendor for various tasks, not necessarily an ongoing project. In the subcontracting mode, you become the client and get to send contracts and payments to your workers.

The Business plan unlocks a feature called Talent Pool where you can invite and onboard your workers. Talent Pools can be either public or private.

No matter which plan you choose, adding new teammates and tax management will incur extra charges. Also, the business bank account is free for all users. When you sign up for the Bonsai software, you’ll get unlimited access for seven days, after which you’ll be prompted to choose a plan.

Bonsai Bookkeeping Ease of Use – How Good Is the Interface?

Since Bonsai accounting is a Software-as-a-Service (SaaS) product, its primary interface is the web app. Simply visit app.hellobonsai.com to sign into your account and access its client, project, and finance management features.

Our tests revealed that Bonsai doesn’t have a downloadable application for your computer, apart from a simple time-tracking tool. This can make it difficult to work offline – for example, if you want to input a new expense and sync later when you have internet access.

However, the web app is extremely well-designed and easy to use. Once you sign in, you’ll find the main navigation pane on your left. This has three sections – dashboards, tools, and finances. You’ll find all your data, charts, and controls in the center, with your user profile and settings on the top right.

We liked that the web app features microcopy, which makes Bonsai a pleasure to use. For instance, when you open Bonsai, the app greets you by saying ‘Good morning ’, adding a touch of personalization.

All the information is presented in natural language that anyone can understand, even without specialized accounting knowledge. Every module of the app has interactive and visual elements to make the user experience more engaging.

Another interesting feature of the Bonsai interface is the interactive changelog. When signing into the app, you’ll see a list of the latest features and how to use them. This makes the app more intuitive and easier to learn.

Apart from the web app that you can use on any device (including mobile phones), Bonsai offers four time-tracking apps – an iOS app for time tracking, invoicing, and expense management, a similar app for Android, a Chrome extension to track time without visiting Bonsai, and a Mac OS time tracker that fits into your Apple menu bar.

The iOS and Android apps are simple and have only three features: time tracking, mobile invoicing, and the ability to upload receipts. The menu bar is at the bottom, and the core features are in the center. All data you capture using these apps is automatically synchronized with your primary Bonsai account.

Like most productivity tools, you can download the Bonsai time tracker extension for Chrome and other Chrome-based browsers, such as Brave. We found this tool surprisingly powerful. Not only can you track time, but you can also create a new invoice and assign hours to a project directly from the extension.

Finally, the Mac OS interface is one of Bonsai’s unique capabilities. Once you install it from the Mac app store, it’ll be added to the Apple menu bar. Simply click on the icon to start tracking time, assign hours to a project, and switch between projects.

Bonsai vs Top Accounting Software

In 2023, Forbes reported that self-employed professionals are about to become the majority of the US workforce, very soon. It’s vital that users in this segment strengthen their bookkeeping and accounting abilities in order to grow their income, save taxes, and remain compliant.

That is why powerful small business and self-employment accounting software apps like Bonsai play such an important role. If you’re considering moving to Bonsai (or one of its competitors), check out our comparative analysis below:

NetSuite is ideal for large businesses with 1000+ employees, while FreshBooks and Zoho are both excellent options for mid-market companies. Zoho’s free forever plan, especially, sets it apart.

However, our tests found Bonsai to be the best overall bookkeeping software if you’re a self-employed professional, sole trader, or agency based out of the US. Despite the slightly high Bonsai pricing, its built-in (free) bank account and 1099-compliant expense management make the investment worth it.

Bonsai Bookkeeping Reviews – What are People Saying?

Hello Bonsai reviews on G2 give it 4.4 stars out of 5 based on 95 reviews. Users were able to present a professional face thanks to templatized proposals, contracts, and invoices, complete with e-signature. However, users point out that Bonsai doesn’t natively integrate with some project management apps, such as Asana.

On Capterra, the Bonsai software earns 4.6 out of 5 based on 70 reviews, and customers are able to start using the app without much of a learning curve. However, users note that more powerful mobile and desktop apps would be welcome.

Customers on Trustpilot rate Bonsai 4.4 out of 5 based on 400+ reviews. Several customers appreciate the company’s prompt support services and also speak positively about its update frequency.

Why You Can Trust Our Bonsai Accounting Software Review

At TechReport, we are committed to bringing you the latest and the most reliable insights from the world of technology since 1999. Our team has years of experience writing about accounting software and testing popular apps in this category, such as Xero, Zoho Books, and others.

For our Bonsai Bookkeeping review, we signed up for a seven-day trial of the app’s Professional plan. Next, we tested its features for managing your accounts, expenses, projects, and clients. We also tested the customization capabilities of Bonsai’s resource library and its mobile and Mac apps.

To validate the inferences from our tests, we looked at what customers are saying about the Bonsai platform on trusted review forums.

This allows us to present you with objective, unbiased conclusions – further informed by our experiences writing in-depth guides on the evolution of accounting software, small business accounting, and more.

How to Use Bonsai for Bookkeeping: Beginner’s Guide

To use Bonsai, visit app.hellobonsai.com to create your free account.

If you sign in using your Google credentials, the software will prompt you to perform two-factor authentication. You’ll see a code on the sign-in screen. Enter the same code on your mobile phone and provide your consent to start using Bonsai.

This takes you to the Bonsai web app, where you can start your free trial. Choose the plan you want, and Bonsai is now activated for seven days. Here are the steps you can follow to complete some of your key accounting tasks:

1. Connect Your Bank Account

You can connect your bank account with the Bonsai bookkeeping software in order to import your expense data. This lets you automate expense tracking so you can keep an eye on every dollar you spend from your accounts and credit cards, the merchants you pay, and if they are tax deductible.

From the left navigation pane, scroll down to bookkeeping (it’ll be right towards the bottom). Under the ‘Expenses’ tab, click on ‘New Expense’ and then ‘Import Expenses.’ A pop-up window will open, allowing you to connect your bank account.

Bonsai partners with FinTech company Plaid for this step; provide consent and continue. You can look up your preferred bank from the dropdown list that appears. Also, mention if it’s a personal or business account so that the Bonsai tax engine can calculate the right deductibles.

2. Create and Send a Proposal

Now that your bank account is all set, you’ll want to invite and add your clients. If you’re starting a project from scratch, the first step is to send your prospective client a proposal. From the left navigation pane, click on ‘Proposals.’ Then, click on the ‘New Proposal’ tab to open Bonsai’s template library.

Bonsai has a massive resource repository, so spend some time exploring it to find a template that meets your business and branding needs. Click on the ‘Use Template’ button to customize your proposal.

Here, you’ll be able to add in a bunch of custom data, such as the client’s name and contact, the project name, services, rates, and even new sections. You can offer your clients multiple service packages in your proposal so they can choose the one they like best.

You can provide options in the fee structure too.

Depending on how you configure your proposal, the client can choose any one option or multiple options. After you finish, click on ‘Edit Automation’ (the lightning icon). For example, you may want to auto-create an invoice as soon as the client accepts the proposal.

Click send; you can always return to the ‘Proposal’ module to view their status – light gray for unsent, dark gray for outstanding, and green for accepted.

3. Send Invoices

The process of sending an invoice is similar to sending a proposal. Head to the ‘Invoices’ module from the left navigation pane and click on ‘New invoice.’ choose whether you want a recurring, subscription, or bundled invoice, and select your client and the project assigned.

Once again, choose an invoice template from Bonsai’s resource library and customize it before sending.

Make sure to pay special attention to payment methods. Bonsai supports integrated payments via credit cards, debit cards, wire transfers, links for non-Bonsai payment platforms (e.g., Paypal), and even mailed checks. You can add one or more of these options to any of your invoices.

After you’ve sent it, return to the ‘Invoices’ module to check on its status – gray for unsent, orange for outstanding, red for overdue, and green for paid.

4. Get Paid to Your Preferred Account

One of Bonsai’s unique features is that it lets you open a Bonsai bank account (funds held by EVOLVE) right within the app. But if you want to receive invoice payouts in your existing account, you’ll need to connect the software with your preferred payout method.

To do this, open the ‘Payments’ section from the left navigation pane. Click on the three dots menu on the top right and choose ‘Manage Payouts.’ Add the debit card or bank account details where you’d like to receive your funds.

Payments may take anywhere between 10 minutes and seven days to be credited, depending on the payment method.

Bonsai Accounting Review – Is It Right for You?

As our Bonsai bookkeeping review shows, the platform is an excellent fit for new business owners and freelancers who are just starting out.

Getting started is often the hardest step, and Bonsai has you covered with the ability to open a new, dedicated business bank account right within your accounting software. New users will also benefit from the company’s massive resource library and free tools, especially since they are tailored to specific industries.

We know that self-employed workers often find themselves wearing multiple hats, and Bonsai supports you in every role, thanks to tools for CRM, project management, billing, bookkeeping, and tax compliance, all under one roof.

Granted, Bonsai is priced slightly higher than some of its competitors. The location of its hosting cloud isn’t clear, and its integration marketplace is still growing.

Mid-sized businesses may find this limiting, while the simplicity of Hello Bonsai is likely to resonate with most small business owners and self-employed professionals.

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