Self-employed and using spreadsheets? Start streamlining!
by Sam Davis
As a web developer, I liaise with lots of different people on a day to day basis – from sole traders, employees of limited companies, charity workers and much more besides. Whilst the majority of my clients already work within established organisations with their own accounting systems in place, there are also a number of start-ups whose websites I create, who do not know which direction to go in when it comes to controlling and logging their finances and doing that all important Self Assessment.
Amazingly, a significant amount of people still use spreadsheets to enter income, manually producing invoices on Microsoft Word, whilst having another Excel sheet set up in order to log their expenses. This then invariably gets sent to their accountant at the end of the tax year, who works out the HMRC tax-bill accordingly. Not only is this laborious, it also makes it very difficult to interpret financial projections and cash-flow, and, if your spreadsheet is not in the cloud, it also relies on your computer not getting corrupted!
You do not need an accountant – the software takes care of all aspects of tax, including Corporation tax if you’re a private limited company.
Enter stage left, FreeAgent – a powerful online service which takes care of all your business financial needs for you. I have used this service now for over a year and am a huge fan. It is a flat monthly fee which, unless you have special friends, is certain to be cheaper than your annual bill from your accountants. That’s right, you do not need an accountant – the software takes care of all aspects of tax, including Corporation tax if you’re a private limited company.
For some, being without a person to sort out your end of financial year monies may be daunting, therefore you may still prefer to stick to using an accountant (who will certainly be giving you plenty advice in order to cut your tax bill) – but the beauty of using FreeAgent is that it makes the data really easy for them to manipulate, so much so – you really should be asking them for a bill reduction, as it will be doing 95% of their job!
How did I freelance for 10 yrs without @freeagent? Book-keeping a breeze, auto invoice chasing and my support email answered in 32 minutes
— Tom Albrighton (@tomcopy) January 12, 2017
FreeAgent manages your income and outgoings in a really simple to use layout – connecting up to one or more bank feeds, therefore giving you an automated way to monitor what goes in and out of your bank account. If you have invoices that you have created through the system, it will automatically allocate the invoice to the incoming payment, and therefore will stop niggling your client for payment accordingly.
If you’re worried about logging expenses, don’t be – FreeAgent makes it easy. For instance, if you work from home, you’ll obviously know that you can claim for a percentage of heating, electricity, and much more besides – therefore if you have a direct debit for the same amount every month, you can create recurring expenses – the data from which will be utilised by the system when calculating your tax bill. Furthermore, you can upload receipts at the drop of a hat too.
Really impressed with @freeagent customer support, fantastic service, really helped me get everything straight in my account!
— Rachel Oxton-King (@racheloxtonking) May 16, 2017
For anyone that charges their customers by the hour, FreeAgent also has the ability to do time-tracking as well, and provide estimates – allowing you to really get a grip of what you should be charging your clients. No more random guessing of the hours that have been clocking up, and instead – an itemised view of your days and weeks. Perfect!
If you use Zapier, you’ll also be pleased to know that there are a number of Zaps where FreeAgent can link up to other bits of software, be it Gmail, Toggl, Mailchimp, Podio, WooCommerce, Stripe, and a number of others!
— Catherine – Virtual Assistant – Wiltshire (@DelegateVA) June 1, 2017
If you’re worried about getting help, I can tell you that the support offered by the service is really good, and there are plenty of questions and answers in their knowledge-base too. You’d be surprised at how many niche questions have been dealt with, so it is worth having a check before you go all guns blazing with your queries.
Lastly, whilst it is fashionable to have a clean inbox, I would recommend NOT unsubscribing from their mailing list, as you’ll be informed about some really handy free webinars where they speak to people from HMRC about a number of useful topics, including claiming expenses, what you can and can’t list, and much more – making it a really useful platform to be part of!
If you’re a sole-trader like myself, FreeAgent starts at £9.50 per month at the moment. For limited companies it is £14.50 and for LLP’s – just £12. If you do subscribe, the link below provides you with 10% off, making it an even better proposition.