The FreeAgent Blog

We’re delighted to announce the latest addition to the comprehensive range of apps, widgets and add-ons that play nicely with FreeAgent: EdgeDocs, the UK’s only fully integrated export documentation solution.

Edgedocs is designed for small and medium-sized businesses that sell stock both nationally and internationally. It provides support for activities including export documentation, stock control and customer relationship management.

FreeAgent’s new integration with EdgeDocs automatically syncs historical contacts and new invoices that relate to completed sales in EdgeDocs to FreeAgent - no need to duplicate the information manually!

If you already have an EdgeDocs account, you can set up the integration to FreeAgent by navigating to ‘Administration’ and ‘Settings’ in your EdgeDocs account. From there, simply select the FreeAgent logo and follow the instructions! If you’re a FreeAgent customer and you’d like to give EdgeDocs a try, check out their special offer.

FreeAgent’s Chief Accountant, Emily Coltman FCA, takes a look at today’s Budget and what it might mean for small businesses.

Self Assessment

The Chancellor, George Osborne, promised in today’s Budget that the annual tax return is set to be abolished, with information being uploaded automatically, tax collection “radically simplified”, and online portals to manage tax.

What isn’t clear yet, either from his speech, or from the full Budget report, or from the government white paper “Making Tax Easier”, is just how this will happen.

Tax returns do include information that HMRC already has, such as salaries for directors of limited companies, but they also include a great deal of information that’s not visible to HMRC until the tax return is filed, such as sole traders’ income and expenditure, rental income from let properties, and sales that give rise to capital gains tax. How will this information be collected? Will sole traders be compelled to report their income and expenditure to HMRC in a system similar to RTI? Will all institutions have to share their customers’ financial information with HMRC?

This is all still “to be announced” or “to be consulted upon”, though the “Making Tax Easier” white paper mentions the possibility that by 2020, small businesses will be able to link their accounting software to government systems to share financial information. It also says that “taxpayers will still be responsible for ensuring their tax bills are right and telling HMRC about information that is not reported by other means”.

Payment of income tax and NIC

Additionally, the government plans to implement “a new payment process to enable tax and NICs to be collected through digital accounts, instead of Self Assessment”. This could spell the end of twice-yearly payments and the attendant payments on account, which cause cash flow difficulties for many small business owners. The “Making Tax Easier” white paper mentions a “pay-as-you-go” option for tax, though again the detailed mechanics of this are not yet explained.

Is this change for the good?

Abolition of the tax return would be a massive change for both small business owners and their accountants, but whether that change is positive or otherwise, I reserve my judgement until I have seen how this will work in practice. RTI payroll reporting has been far from trouble-free, so I have my doubts as to how well a similar system would work for collecting other data.

Class 2 National Insurance to be abolished

Class 2 National Insurance, the flat-rate National Insurance which entitles the self-employed and partners to certain State benefits, is also to be abolished in the next Parliament. The contributory element will be replaced by a reform to Class 4 National Insurance. The mechanics of this reform haven’t yet been decided; there’s going to be another consultation on that.

This simplification is welcome, as having two kinds of National Insurance to pay is confusing for partners and the self-employed.

The Annual Investment Allowance

The Annual Investment Allowance (AIA), an allowance that gives 100% tax relief on the cost of many items of new equipment that a business might buy, is due to fall to £25,000 from 2016. Although the Chancellor did not promise to keep AIA at its current level of £500,000, he did say that a drop to £25,000 was “not acceptable” and that the revised level, to be announced in the Autumn Statement, would be “much more generous”.

Restriction of travel and subsistence relief

The government has been investigating the possibility of restricting the availability of tax relief on “home-to-work” journeys for individuals operating through agencies. The Chancellor mentioned this in passing in his speech, promising to “protect the genuinely self-employed”, and the full report did not detail the proposed changes, which are due to take place in April 2016. Instead, the report said further consultation was needed, but mentioned that the measure would affect both umbrella companies and personal service companies. So this is another case of “watch this space”.

So, as we might expect from a Budget that pre-dates a General Election by less than two months, there are a great many promises here of simplification and radical change in the future, and very little in the way of definite and immediate changes for small business owners. Watch this space!

Today we’re launching a completely redesigned way of explaining your bank statements, and yes, it’s kind of a big deal.

If you go to the Banking section of FreeAgent and explain a bank statement you’ll notice a big change in how this is done. Over the past few months we’ve been completely redesigning the interface for bank reconciliation. It’s a fundamental rework to a key part of FreeAgent and we think it’ll make a huge difference to how quickly you get your books done.

Previously, clicking on a transaction in the statement list would take you to a new page (with lots of options!) where you could explain the transaction, before coming back to the statement page. It was a bit tedious, especially if you had lots of simple transactions to explain.

In the new interface, clicking on a transaction lets you explain it immediately from the list view, so it’s now it much faster to move through your statement, explaining transactions one at a time.

explaining a bank transaction

For most of your transactions you should be able to explain them quickly from the statement page, but you can also click through to the original view via the 'More Options' link, if you need any of the other options like project re-billing.

Advanced filtering

bank statement filtering

Aside from the faster way to explain transactions we’ve also added new filtering options, so it’s possible to filter the list of transactions by status type as well as date range. So you can easily see all unexplained transactions in March or all transactions marked for review in February if you’re using bank feeds.

And the list of months displayed in the sidebar now only links to each month’s unexplained transactions. Which is both logical and handy.

Small improvements but ones we think will make a huge difference to your workflow.

But why can’t I...?

You’ll notice that we haven’t added all the explanation functionality to the new interface. Things like project re-billing and using an explanation for matching transactions still reside unblemished in the original screen which you now access with the 'More Options' buttons.

We’ve tried to balance making the new interface fast and easy to use while ensuring it’s functional enough to deal with the vast majority of your transactions. Using the almighty twin powers of DATA and SCIENCE we think we’ve struck a sensible balance, but we’re still open to feedback.

Our improvements to the banking area don’t stop here. Over the next few months we’ll be working on more features to help speed up the bank explain process, and we know you’re going to love them.

Now, go forth and explain!

Roan and the team at FreeAgent

FreeAgent is well known for its easy invoicing, expense and other bookkeeping features, but did you know it also has some really useful behind-the-scenes functionality that could help you save even more time? Here are five pro tips to help make managing your books in FreeAgent even easier.

Create an invoice price list to save time

Do you often invoice your customers for the same product or service and spend ages meticulously entering the details about those items every time you create a new invoice? You may be able to save some valuable time by creating a price list instead. Once your price list is set up, when it’s time to invoice your customer you simply choose the item you need from the list, and FreeAgent will automatically add the item to your invoice. No extra effort required!

Set your invoices to send themselves

If you send regular invoices to a customer - for example if you're taking monthly payment by direct debit and need to invoice for each different payment - then you could save valuable time by creating a recurring invoice profile. FreeAgent uses recurring profiles to generate invoices when they’re due, they’ll just automagically appear in your accounts. You can also set up FreeAgent to send automatic emails to accompany every invoice, saving you even more time and admin.

Link FreeAgent to other apps

Since FreeAgent probably isn’t the only app that you use to run your business, it’s a great idea to check out our integrations page and also third party services like Zapier to see how you can connect FreeAgent to other apps to save time. For example, you could automatically create a Trello card from a FreeAgent project, automatically add new FreeAgent contacts to a Mailchimp list, or automatically add FreeAgent projects to your Google calendar. For a masterclass on time-saving automation, check out this example from Hitreach to see how they automated their sales process and saved their business around £25,000 (or $38,600) per year.

Keep tax deadlines from sneaking up on you

If you’re in the UK or US, you probably already know about the FreeAgent Tax Timeline, which displays a live projection of how much money you owe for tax and when you owe it.

But did you know that you don’t even have to log in to FreeAgent to see this information? You can export the details of your tax deadlines into your Google, Outlook or iCal calendar by following a few easy steps, and make sure those tax deadlines can’t sneak up on you.

Chase your invoices and say thank you automatically

Chasing invoices is one of those necessary evils of running your own business, but you can save a lot of time and hassle by setting up FreeAgent to automatically remind customers about their invoices by email, and even to send a thank you email when they’ve paid. We can’t guarantee that you’ll never have an awkward conversation about payment again, but hopefully FreeAgent can take the bulk of the time-consuming reminders to help you get back to work.

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