Integrate with FreshBooks

Step 1: Connect your accounts

Option 1: Connect to FreshBooks from Gusto

You’ll need admin permissions in both Gusto and FreshBooks to connect your accounts. Start here: 

1. Sign in to your Gusto admin account.
2. Go to the App directory.
3. Search for FreshBooks and select it.
4. Click Connect.
5. Enter your FreshBooks credentials.
   • If you're an accounting firm: First, select your firm. Then select the specific company you manage.
6. Click Authorize to allow FreshBooks and Gusto to sync.
7. In the Detailed tab, map your chart of accounts.
   • For more help with mapping, check out the “Map your chart of accounts” section of this article.
   • Important: All Gusto categories must be mapped in order for your sync to work.

Option 2: Start a new Gusto account from FreshBooks 

If your company does not have a Gusto account yet, follow these steps to sign up for Gusto with 2 months of free payroll. 

1. Sign in to FreshBooks.
2. In the top-left corner, click the gear icon.
3. Click Payroll Settings.
4. Click Create a Trial Account to get started with a free 2-month trial.
   • You’ll be taken to Gusto to set up your company account.
5. After your Gusto account is set up, go to the App directory on the left side of your screen in Gusto.
6. In the “Find an app” search bar, type “FreshBooks.”
7. Choose FreshBooks. 
8. Click Connect.
9. Enter your FreshBooks login credentials.
10. Click Allow Access to authorize Gusto to access your FreshBooks account.
11. Choose the business(es) you’d like Gusto to connect to. 
12. Click Connect to FreshBooks.

Step 2: Automate your mappings (Recommended)

Automating your mappings is optional but recommended to avoid sync errors. This lets you pre-select which FreshBooks accounts should be used by default for new payroll categories. This means that when a new item is created in Gusto, you will not need to manually map it—Gusto will automatically apply your default mapping.

You’ll manage automated mappings in the Default tab. Click here for more details and next steps. 

Step 3: Choose your sync settings

In the Settings section of the integration, stay on the Manage tab to set up any additional sync preferences—such as whether the sync runs automatically or manually, or whether certain taxes should be consolidated.

Head to the section below for a description of each setting and how to set them up.

Below is each setting you can customize and how to do so.

Here’s how to get to any of these settings:

1. Sign in to your Gusto admin account.
2. Go to the App directory.
3. Search for FreshBooks and select it.
4. Under “Settings,” go to the Manage tab.
5. Find the setting you’d like to review. See below to learn more about each setting.

Contractor payment sync

If you pay contractors through Gusto, decide how those payments should sync:

• Batch payments into a single entry (recommended for 30+ contractor payments): All contractor payments for a pay date will sync as one entry. Syncs (including auto-syncs) occur at 5pm PT on the payment processing date.
• Sync each contractor payment as a separate entry: Each contractor payment will appear as its own journal entry.

Employer tax consolidation

Choose how you want employer taxes to appear in FreshBooks:

• Consolidate: Group all employer taxes into a single lump sum (e.g., "Payroll Taxes").
• Don’t Consolidate: List out individual tax amounts (e.g., Federal Unemployment, Social Security, Medicare, State Unemployment, etc.).

Journal entry consolidation

By default, Gusto consolidates entries of the same type into a single journal entry. You can also choose to group entries:

• By employee
• By department
• By job
• By project (if using Gusto Project Tracking)

Click here to learn more about group mappings.

Entry date options

Select when the journal entry should appear in FreshBooks:

• Check date: This is the date your employees received their payments.
• Debit date: This is the date Gusto initiated the debit for taxes and net pay from your company’s bank account.
• End of pay period: This is the recorded end of the pay period.

Here’s why mapping your chart of accounts matters:

• For payroll data to sync correctly, each payroll item must be mapped to an account in FreshBooks.
• The more accounts you map to, the more detail your invoice will have.
• More detailed invoices give you more granular reports in FreshBooks.

Map your chart of accounts

1. In your Gusto admin account, head to the App directory.
2. Choose FreshBooks.
   • This can be found under the Connected Integrations tab. 
3. Go to the Detailed tab.
4. Click any section (Wages & Salaries, Employer Taxes, etc.) to expand the view.
5. For each Gusto category, click the search box and choose the corresponding FreshBooks account.
   • By default, Gusto only shows common account types for each category.
   • If you do not see the account you want, start typing the account name to find it.
   • If you’re still not seeing an account you’d like to use, create the account in FreshBooks then click Refresh chart of accounts in Gusto.
   • Click here to learn more about types of accounts and commonly used pairings.
6. Repeat until you've selected an account for each Gusto category. Your progress is automatically saved as you go.
   • Unmapped categories will move to the top of the list.

Time-saving tips for the Mapping tab:

• If you’d like to map multiple items at once:
  • Check the box next to each item you want to map.
  • Click Actions at the top.
  • Choose Edit account type.
  • Type the account name and select it.
  • Click Submit.
• To show unmapped items only:
  • Next to "Actions," click the filter icon.
  • Select Display unmapped accounts only.
  • Click Apply.

Why default mappings matter

Over time, you may make changes to your Gusto account such as adding a custom deduction, creating a new earnings type, or setting up a new benefit. When this happens, new payroll line items are created in Gusto that need to be mapped to an account in FreshBooks. If these items are not mapped, they can cause sync issues. Setting up default mappings can help you with this.

What default mappings do

Default mappings let you pre-select the FreshBooks accounts that should be used for new payroll categories. This means that when you create a new line item, you will not have to manually map it to a FreshBooks account—Gusto will automatically apply your default mapping to it.

• Example: If a new earnings type is created in Gusto, it will appear under "Wages & Salaries." If you’ve already chosen a default mapping for “Wages & Salaries,” the new line item will automatically map to the default FreshBooks account without interrupting the sync.

Setting up default mappings is optional. If you prefer to manually map new Gusto categories, simply leave the default mapping blank.

Set up default mappings

Follow these steps to set up or change default mappings:

1. In your Gusto admin account, head to the App directory.
2. Go to the Connected Integrations tab.
3. Choose FreshBooks.
4. Select the Default tab.
5. For each section (Wages & Salaries, Employer Taxes, etc.) you’d like to map, select the FreshBooks account you want new categories to map to.
   • If you prefer to manually map new categories as they’re created, simply leave the default mapping blank.
6. Repeat for all sections.
   • Your selections are saved automatically.

Edit default mappings

You can change default mappings at any time in the Default tab. Changes will only apply to new mappings going forward. 

Edit detailed mappings

If a new category has been given a default mapping you’d like to change, you can change it in the Detailed tab. Here's how:

1. In your Gusto admin account, go to the App directory. 
2. Go to the Connected Integrations tab.
3. Choose FreshBooks.
4. Select the Detailed tab.
5. Find the category you’d like to change and select the FreshBooks account it should map to going forward. 
   • If you also want to change the default mapping for line items in that category going forward, go to the Default tab.

If past payrolls have already been synced to FreshBooks with an incorrect mapping, you’ll need to manually re-sync those payrolls.

To provide more granularity, you have the option to map your chart of accounts by employee, job, department, or Gusto Projects (available to companies using Gusto Project Tracking). 

This is optional.

Set up consolidated journal entries

Step 1: Choose your journal entry consolidation method

1. Sign in to your Gusto admin account.
2. Go to the App directory and select FreshBooks.
   • You can also find this under the Connected Integrations tab.
3. Under Settings, go to the Manage tab.
4. Next to "Journal entry consolidation," click Edit.
5. Choose how you want to consolidate entries:
   • By employee: 
     • This can offer more detailed reporting. 
     • Ex: You can track each employee’s wages in separate accounts instead of one "Salaries and Wages" account.
   • By department:
     • This can help you track wages, taxes, and benefits separately. 
     • Ex: You can send Design wages to one account and Marketing wages to another, instead of combining everything into "Salaries and Wages."
     • Click here to see how you can enable departments.
   • By job:
     • This can split wages, taxes, and benefits by role. 
     • Ex: You can track cashier wages and cook wages in separate accounts instead of sending all wages to "Salaries and Wages." 
     • Click here to see how you can enable multiple job titles for employees.
   • By project:
     • Gusto Project Tracking must be enabled.
     • You can track wages, taxes, and benefits by project. 
     • Ex: Instead of all wages going to “Salaries and Wages,” you can split wages into separate accounts for each Gusto Project. 
6. Click Submit.

Step 2: Set up mapping overrides

Once you select a consolidation method, a new tab appears on the left. Ex: If you choose to consolidate by employee, the tab will be called Employee. If you choose to consolidate by department, the tab will be called Department.

You can override default mappings for individual employees, departments, jobs, or projects. Overriding a default mapping means assigning different accounts to payroll items at these levels. 

This is optional—if no overrides are applied, journal entries will still be categorized accordingly.

Here's how to set up an override:

1. Find the new tab that corresponds to the consolidation method you chose.
   • Ex: If you chose to consolidate by employee, go to the Employee tab.
2. Click Override.
3. Just as you did on the Detailed tab, match each Gusto category to an account in FreshBooks.

Contractor payments

Consolidating journal entries by employee and department is compatible with contractors.

Consolidating by job and project is not compatible with contractors. This is because job titles and Gusto Projects are not currently supported for contractor profiles. If your company pays contractors and uses job or project consolidation, contractor payments will be synced based on the default company mappings.

1. Sign in to Gusto.
2. Click the Pay section and select Pay history. 
3. Click on the payroll or contractor payment you would like to sync.
4. Click Sync at the top of the payroll detail page.
   • If you have autosync enabled, the data will automatically push over when you process payroll.
5. A timestamp will populate confirming the data was pushed over to FreshBooks.
6. Sign in to your FreshBooks account.

The individual payroll expenses will post to "Expenses" in FreshBooks under 3 expense entries (total wages, total taxes, and total reimbursements). Contractor payments are listed separately. The name of the contractor is included and there's no need to approve the expense. 

When using an accounting software, there are two ways to reconcile and match expenses with withdrawals from the bank account.

Method 1: Cash is withdrawn > create a matching expense

Pull up the bank transactions from your integration with your bank account. When you see a withdrawal, create a corresponding expense.

Example: You bought a few items at the office supply store, and therefore see this bank withdrawal when looking at your bank transactions. You can now add a corresponding office supply expense for reporting purposes. The expense is now accounted for as demonstrated by the reduction in cash.

Method 2: Report an expense > cash is withdrawn > match the expense

Report a future expense. When you see the actual cash transactions, match the cash withdrawal with the expense that was previously reported.

Example: You forecast that supplies will cost $X amount of money at the beginning of the month, but the funds will not be withdrawn until the end of the month. You therefore report the expense. When the cash is withdrawn at the end of the month, you can indicate that the previously reported expense matches with this specific bank transaction.

When generating paper checks using your accounting software you may see an additional expense created on your books - this is because total gross wages are reported whether your employees were paid by direct deposit or by check.

This can cause issues when reconciling your expenses because the amount paid to employees may appear to be over-reported.  

Our preferred method is for you to print the checks from your Gusto account or handwrite them to avoid expenses appearing as over-reported. Then, you can easily reconcile the total payroll expense from Gusto when the checks are cashed by your employees.

If you are not handwriting or printing your checks through Gusto, below are the best options to avoid over reporting.

Example of over-reported checks

You run a payroll that costs $10,000, where your employee is receiving a $7,000 check from you. In the $10,000 expense synced over from Gusto, you can see line items for $9,000 of gross wages (this includes a $7,000 check + $2,000 in employee taxes) and $1,000 of employer payroll taxes.

When you create a check for your employee in your accounting software, it will also create an expense for $7,000. As a result, when you look at your total payroll expenses you will now see that payroll for this pay period costs $17,000. When reconciling your books, however, only $10,000 will be taken from your checking account ($3,000 for employee + employer taxes and $7,000 from the cashed check).

The check created by your accounting software has led you to over report your payroll expenses, so when you look at your profit for the year it is lower than it should be. You will need to use one of the solutions described below to reconcile the over reported check payment.

Steps to reconcile checks

Reduce the expense account associated with Gross Wages, indicated by your mappings in Gusto, by the amount of the employees' check prior to creating the check in your FreshBooks account. Reducing the Gross Wage expense by the check amount will prevent double counting.

Example: You sync over a total payroll expense of $10,000. Knowing that creating a check will over-report the expense by $7,000, you reduce the gross wage expense from $9,000 to $2,000. 

How to edit a Gusto FreshBooks expense

1. Sign in to FreshBooks.
2. From Expenses, select the expense item for Regular Wages and click Edit.
3. Reduce the entry by the amount of the check. 

Choose a section below for frequently asked questions about this integration.