Question:

“I am a business consultant contractor / freelancer operating through a limited company and I have been recommended to use FreeAgent. What is so good about this system and is it the best one for contractors like me?”

freeagent

Answer:

As we are FreeAgent accountants and we work with a lot of contractors and freelancers like yourself we’re well positioned to answer this one.

Years back the options you would have had for your book-keeping would have been to either use a traditional book-keeping system like Sage (yuck!) or Quickbooks for example or to use something like Microsoft Excel to keep a track of your income and expenses and help you manage things like your VAT returns, payroll and dividends. The traditional systems are too tricky for non-accountants to use and with Excel it’s easy for things to go wrong.

FreeAgent has been developed by non-accountants and has a very easy to learn user interface, you’ll pick it up in no time. It’s cloud based so you don’t need to buy upgrades to your software every year as it’s always up to date and it is available for you to access from anywhere that has an internet connection. This also means your accountant has access to the same set of data that you do which makes dealing with queries, tax planning issues and year end a much less stressful process for you.

A detailed write up of FreeAgent can be found here but some of the key things we find that help our freelancer / contractor clients are:

  • Invoices – simple to raise invoices through FreeAgent and can be emailed to your client through the system. You can copy a previous invoice or create templates or even automated recurring invoices. Once an invoice has been created it is in the system so you don’t need to save an electronic or hard copy anywhere.
  • Bank Statements – you can either setup a bank feed or simply import your business bank transactions , it is then very easy to explain what the items are for e.g. money coming in from a client to pay off an invoice, money out for software costs etc. You will be so on top of your business finances it will feel weird at first!
  • Corporation Tax – FreeAgent estimates your corporation tax as you go along so you can plan for how much your bill is likely to be (a business pays corporation tax on it’s profits).
  • Dividends – the system keeps a track of your dividends by tax year which helps you and your accountant manage your personal tax planning.
  • Reporting – you can pull up a simple Profit and Loss report and see how much you have billed, what your expenses are and how much profit you have made both by month and for the year to date.

We have worked with many systems but for freelancers and contractors we’re yet to see a system that is better than FreeAgent.