Here's some more information about what some of the various types of payment and receipt in FreeAgent mean, and when you might use them.
Payment
A Payment brings up a comprehensive list of categories, because it's for money spent that isn't paying off a bill you've entered into FreeAgent, or money paid to the user. You'll find here not only admin expenses and cost of sales, but also payments of taxes such as VAT and PAYE.
Select type Payment...
...then choose your category from the list. There are two pictures below so we can show you the list in full.
Can I add a new category to the list?
Bill Payment
A Bill Payment is what you'd use to pay off a bill that's already been entered into FreeAgent. You'd then need to choose the bill in question from FreeAgent's list of open, unpaid bills. You won't see the Bill Payment type if you have no open, unpaid bills entered into FreeAgent.
Money Paid to User
Money Paid to User is money paid to an employee, director, sole trader, partner, or anyone else who's been set up as a user in FreeAgent.
Other Money Out
Other Money Out is where you find, in particular, money paid to a supplier who you owed money to as at your FreeAgent start date. This kind of money owed is also called Trade Creditors, so for this you'd use category Payment to Initial Creditor.
Invoice Receipt
An Invoice Receipt is money coming in against an invoice that you've entered into FreeAgent and sent to one of your customers. You'd then need to choose the invoice in question from FreeAgent's list of open, unpaid invoices.
Money Received from User
Money Received from User is money that an employee, director, sole trader, partner or anyone else who's been set up as a user in FreeAgent has paid in.
Other Money In
Other Money In is where you find the category for bank interest received.
Other Money In is also where you find money received from a customer who owed you money as at your FreeAgent start date. This kind of money owed to you is also called Trade Debtors, so for this you'd use category Receipt from Initial Debtor.
That's the end of this article. You've seen a selection of types for money received and paid, to help you identify how to explain your bank transactions.
If you're not sure about how to explain a bank transaction, or have any other queries, please don't hesitate to contact us on support@freeagent.com