When you record income in FreeAgent, it's usually by way of sales invoices.
If you're registered for VAT then HM Revenue say you must nearly always give your customers VAT invoices unless you're a retailer. So it makes sense to create these invoices in FreeAgent.
But sometimes you may not want to create sales invoices.
Perhaps you're entering historic data on to FreeAgent.
Or perhaps you're not registered for VAT and you're taking payment up front from your customers, and don't tend to give them invoices.
Do I have to create invoices in FreeAgent in that case?
No.
You can explain the income as it arrives in your bank account, using type Sales.
This does let you pick a VAT rate for the income, which is useful if you're catching up with your bookkeeping and entering historic data, for example if you've already issued invoices using another system and you don't want to re-create them in FreeAgent.
But do remember that you must usually issue VAT invoices if you're registered for VAT. Keep it clean!
Then choose the sales category you would like this to go into.
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