You’ve taken the plunge with FreeAgent – great choice – but if you’re not getting good results, you’re not alone and a spot of FreeAgent training might be just what you need.
You might be struggling with entering transactions into FreeAgent or maybe you’re not getting useful financial information out of it. Could be bits of both that get you thinking:
- My profit & loss doesn’t look right
- VAT seems a bit off
- My bank feed doesn’t match to invoices
- I’m not sure what FreeAgent is telling me
So, if you find yourself asking “How do I make better use of FreeAgent?”, you’re in the right place.
Why FreeAgent isn’t giving you useful information – it’s usually bookkeeping discipline
No one does bookkeeping for the sake of bookkeeping. We do bookkeeping to measure, understand and improve the financial performance of a business or organisation.
But, in order for it to be useful, your bookkeeping must be complete, consistent, accurate and up to date. Otherwise the information you’ll get from it will be wrong and you won’t know how your business is performing.
FreeAgent will only be as useful as the quality of the data you enter and the old adage of “Garbage-In-Garbage-Out” certainly applies to bookkeeping.
So, it pays to invest in FreeAgent training.
Data entry – the “Big Three”
The big three areas of data entry to get right are:
- Sales invoices and income
- Suppliers’ bills and expenses
- Bank feed and bank reconciliation
Sales invoices and income
Create and send your sales invoices as soon as you can, making sure they’re accurate and emailed to the right customer contact.
If your sales are made online or customers pay on the day by card then you still need to record your sales as you make them but be aware that the money coming into your bank account may NOT be the full sales value as it may have had card charges or platform charges deducted from it.
💡Get paid quicker – 5 tips to improve your sales invoices
Suppliers’ bills and expenses
Record all suppliers’ bills as they come in irrespective of whether you’ve paid them and add the PDF of the bill into your bookkeeping entry so that FreeAgent becomes an online filing cabinet.
Make sure they are coded to the correct expense category so your P&L accurately reflects the running costs of your business.
Where you pay for a business expense by card or online, always get the bill or receipt and either enter it as a supplier’s bill or attach it to the transaction if you are accounting for it from the bank feed.
Bank feed and reconciliation
Make sure you have at least one business bank account and connect all of your business bank accounts to FreeAgent.
If all your sales invoices have been raised and accounted for and all your suppliers’ bills have been accounted for then FreeAgent will do a pretty good job of allocating the receipts and payments in your bank account to the sales and suppliers’ transactions you’ve already accounted for.
Some transactions, such as payroll payments, bank charges and interest, can’t be allocated to an invoice or a bill so you do the accounting for those transactions from within the bank feed.
Clear the bank feed as often as you can and at least once a month reconcile FreeAgent to your bank statement. Go through the bank reconciliation process to ensure FreeAgent has the correct bank balance.
💡Why two bank accounts are better than one
How to save time with FreeAgent automation and integrations
It’s important to know how to do the basics manually but there are also efficiencies to be had which save time, improve accuracy and take some of the hard work out of your bookkeeping. For example, within the software:
- If you send the same invoice to a customer repeatedly you can set it to be a recurring invoice so FreeAgent raises it and sends it every month
- You can set rules in the bank feed so the right answer is suggested and automatically applied to regular expenses
- FreeAgent has a tool called Smart Capture which lets you upload bills and receipts from which FreeAgent can extract data that speeds up the bookkeeping for suppliers’ bills.
- “Find and fix” is a tool for making corrections in bulk – handle with care!
There’s also a vast array of Apps that you can connect to FreeAgent which save time, reduce errors and automate various tasks.
But be careful. There’s any number of “what went wrong when I connected this app to my accounting software” stories and you don’t want to become another one.
Get the correct bookkeeping done manually first so you know what the right answer looks like and then think about connecting external apps.
💡A cautionary tale – Accounting apps – less is more
How to use FreeAgent reports properly (and spot errors)
You do bookkeeping so you can measure and improve the financial performance of your business – so you’re going to need reports.
Make sure you’re familiar with the basics:
- Profit and loss
- Balance sheet
- Aged debtors – for managing credit control
- Aged creditors
Other reports are available so you can drill down into individual transactions in an account to see what’s going on.
Reports not only tell you how you’re doing but also indicate whether some of your bookkeeping is inaccurate or perhaps hasn’t been done.
Get comfortable with reports!
FreeAgent training with Blue Dot Consulting
We offer a lot of FreeAgent support for small business users.
In our FreeAgent training sessions we work with businesses to show them how to use FreeAgent properly.
They’re one-to-one sessions in which we look at:
- how you’re using FreeAgent and where you can make improvements
- the account categories you have set up and whether they accurately reflect your business
- key financial controls such as the bank reconciliation
- how to understand and use the financial reports that are available
We run half-day sessions, costing £360 plus VAT, and they take place at your business or ours.
As a free follow-up to each training session we offer a small number of Teams / Zoom calls to make sure you’re using FreeAgent comfortably on your own.
Sounds like what you’re looking for? Then give Michael Austin a call on 020 7125 0270 or email at info@bluedotconsulting.co.uk and we can make a start.
You’ve chosen FreeAgent – a wise choice. Now kick on and get it working how you want it to.
Michael
FreeAgent help – frequently asked questions
Can FreeAgent show what tax I owe?
If you’re a limited company then FreeAgent automatically estimates your corporation tax as you continue with your bookkeeping.
Should I enter expenses as supplier bills or bank transactions?
We prefer suppliers’ bills to be entered so you know immediately what your costs are and how much your business owes to suppliers.
Your financial information will be wrong if you only recognise costs when you actually pay them and cashflow forecasting is more reliable if you know what you owe.
Why is my FreeAgent profit and loss wrong?
Usually this is a combination of not having entered ALL of your accounting transactions and entering some of them incorrectly.
But – one of the reasons to keep looking at your financial reports is to spot errors and fix them.
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At Blue Dot Consulting, we work with owner-managed businesses across Central, West and South West London, including Fulham, Hammersmith, Richmond, Putney, Wandsworth, Kensington and Chelsea. If you’d like to improve your financial reporting, bookkeeping or decision-making, we’d be delighted to help.
© Blue Dot Consulting Limited, Chartered Accountants, Bedford House, Fulham Green, London, SW6 3JW