FreeAgent: Accountancy Software For Freelancers

When I first started my remote development business I had little grasp of what was not only good bookkeeping practice, but what was legally required for me to produce in terms of financial documentation.

Like most things, I learned as I went; soon realising that my paper receipts, folder of drawn up invoices and calculations on the back of envelopes wasn’t the answer. I knew there must be a better way and I found one in FreeAgent.

Here’s my take on what I consider to be the best freelance accountancy software.

What is FreeAgent?

FreeAgent is online accounting software made specifically for freelancers and small businesses, with access for their accountants.

Key FreeAgent features include:

• Estimates – including custom PDF templates.
• Invoicing – send via email direct from FreeAgent.
• Expenses – track both bank payment and “out-of-pocket” project costs.
• Projects – build to-do lists and manage profitability.
• Time Tracking – track billable and billable time per project.
• Banking – explain transactions as they come in.
• Financial Reports – Profit and loss, balance sheet and trial balance.
• VAT – Auto VAT returns and submission to HMRC for UK freelancers/businesses.
• Self Assessment – UK freelancers who are sole traders or directors of limited companies can file their return directly to HMRC.
• Corporation Tax – Using day-to-day bookkeeping information, FreeAgent can automatically forecast what you have to pay and when.

What Do I like so Much About FreeAgent?

The Dashboard

Each time you log in to FreeAgent you land on the dashboard. This is my go-to screen.

As a small business or freelancer, it’s essential that you know where you stand financially. Failure to adhere to the accounting and tax requirements of the country you operate in can lead to severe implications.

The main figure I like to keep regular track of is my company’s corporation tax. FreeAgent forecasts this information in a concise “Tax Timeline” widget on the dashboard.

Alongside other “at a glance” figures like cashflow, bank balance and invoice totals, this feature keeps my business on the straight and narrow. No nasty surprises with FreeAgent.

Ease of Invoicing

When I first started billing for my freelance work, I used Microsoft Word. I created a basic template that I’d use to add items to, manually increment the invoice number and add up totals, save out to PDF and send via my email client.

Not only was this a bit of a longwinded process, it opened up room for error. I found this out the hard way with duplicate invoice numbers and wrongly billed totals!

FreeAgent makes the whole invoicing process so much easier. Now, I simply locate my client, pick the relevant project and start creating a new invoice.

I usually bill by the day, so having my day rate set in the FreeAgent price list enables me to simply add the number of days worked, with the software coming up with the relevant totals (taking into account VAT and/or discounts, if applicable).

From this point, I can save as a PDF (using my custom template with logo) or I can send direct to the email address stored for my contact via FreeAgent itself. So easy!

Automatic Bank Feeds

When I first started using FreeAgent, one of the features myself and other users were crying out for was bank feeds.

Originally, the software required you to download a CSV file from your online banking to submit transactions to bookkeeping. After the introduction of automatic bank feeds, once you’ve set up the initial link between FreeAgent and your bank account – everything is done for you.

All transactions from the bank account specified are fetched daily, and what’s more, FreeAgent will even guess the explanation (IE, specific invoice receipt, reoccurring bill, etc.) of that transaction for you if there’s enough historical data.

Not only are auto bank feeds an amazing feature, it shows the development team are willing to act on feature requests from the software’s users. A major plus point for long term use.

You Still Need an Accountant!

A good accountant is invaluable to a freelancer or any small business.

While FreeAgent doesn’t replace the need for one, it will make life a lot easier when it comes to things like producing end of year accounts. Having a comprehensive set of books at the end of the financial year is a massive help to an accountant and should produce less transaction queries if things are kept up to date. FreeAgent provides the tools to do this.

My accountant and I use FreeAgent together for the majority of my businesses’ needs. You can even set your accountant up with their own log-in and define levels of access to your information. A great feature.

From my perspective, any tool that will make my accountants life easier is a bonus as it will likely reduce my accountancy fees!

How Much Does the Freelance Accountancy Software Cost?

If you’re a UK based user, FreeAgent has a rolling monthly subscription cost that varies depending on the type of setup you have:

Sole Trader – £19 per month.

Partnership/LLP – £24 per month.

Limited Company – £29 per month.

For the US business it’s priced at $24 per month and for the rest of the world it’s $20 per month.

FreeAgent Discount Code

All FreeAgent users have the chance to refer others and get up to 100% off their monthly subscription. If this article has helped you decide on using FreeAgent, feel free to use my referral code when you sign up – we’ll both receive 10% off our monthly subscription cost!

FreeAgent referral code: 42itc2k7

In Summary

Considering the money saved on accountancy fees, array of features on offer and the general ease of use, FreeAgent is great value for money. I’d recommend that any freelancer, remote or otherwise, give it a try.