Thursday, 30 April 2009

FreeAgent; brief review

I had a meeting with Ed Molyneux of FreeAgent yesterday and, amongst other things, he gave me a tour of the software as if I'd been from an accounting practice which was about to sign up as a partner.

I was seriously impressed with the look and feel of the software. It's slick, smooth and with plenty of plain English explanations for end users.

That said, end users do need to be reasonably tech savvy. For starters, there's no function to key in the closing bank balance. Users have to import a bank statement. Great if you do online banking and are comfortable with exporting a statement from your bank's website. And these websites aren't as user-friendly as FreeAgent's. But I guess that anyone who's thinking of doing their accounts online will be OK with that.

For accountants who might be interested in signing up as FreeAgent partners, as BFCA (Blevins Franks) have already done, two features which really did generate a "Wow!" for me were:
  • When a payment to a director/shareholder is entered, if the net wages journal has already been posted and there are some expenses outstanding, FreeAgent automatically divides the payment up between net wages and expenses and puts any balance as a dividend. And it produces dividend vouchers too.
  • If a business changes from invoice accounting for VAT to cash accounting for VAT, or vice versa, FreeAgent automatically works out the adjustment for closing debtors and creditors. I've spent hours wrestling with Sage to work that out...
The software is not perfect yet. I'd like to see it made impossible to post single entry journals, for example.

But I'd certainly add it to my list of software that I would recommend for small businesses, and in particular freelancers. Unlike other small business accounting software products, FreeAgent is very strongly focused towards that market. And having such a targeted focus means it's very, very strong in that area.

1 comment:

  1. I agree with the second WOW! but the first one can cause problems with tax planning (including their effect on Tax Credit claims) when dividends are "automatically" declared. Sometimes it's better to leave the payment in the director's loan account.

    Overall, though I think it's a great product but (I would say this wouldn't I?) you still need an accountant. More importantly though you want one who utilises the up to date figures, which are available, to minimise tax liabilities. (See first paragraph).


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