Spreadsheets versus FreeAgent: an accountant’s point of view

A recent survey found that 34% of microbusiness owners were using spreadsheets as the main method of managing the business’ day-to-day financial accounts*.

Helen Christopher, Operations Director of OrangeGenie Accountancy, gives us her experience of the risks that spreadsheets pose from an accountant’s perspective - and reveals how switching to FreeAgent resulted in a cool £11,000 tax refund for one happy client.

For the last nine years I’ve worked exclusively with contractors and freelancers, heading up teams at national specialist accountancy firms. I’ve experienced both spreadsheets and cloud accounting software over this time so I have pretty robust knowledge of both methods of bookkeeping. When we were using spreadsheets, I knew no different and we managed! But with hindsight, we could have done so much more and served our clients better with simple online accounting software such as FreeAgent.

The problems with spreadsheets

In my experience, spreadsheets were responsible for a range of problems back in the bad old days. Spreadsheets are prone to error; they’re often delivered to accountants on deadline days at the last minute, incorrectly completed, sometimes even corrupt and therefore practically useless! We could end up with a document we just couldn’t work from and clients were often frustrated when we needed to contact them during busy working hours to resolve the problems with the spreadsheet. Duplication was also a common issue. It wasn’t unheard of for various copies of spreadsheets to exist and for client and accountant to be looking at what they thought was the same document, that turned out not to be.

When I set up OrangeGenie Accountancy, I was determined to do things differently. Our clients deserve better than spreadsheets and the stress they cause. Spreadsheets leave us being reactive accountants, rushing to put things right in time to file documents and often delivering bad news with no time to rectify problems prior to deadlines. Introducing FreeAgent’s online accounting software has fundamentally changed the way we work with clients and vastly improved their experience. A win all round.

An easier way to work together

FreeAgent is intuitive to use and most clients pick it up very easily. If clients add the basic data correctly then they can step back while the software does the “number crunching” and we as their accountants support them with our expertise. No matter where our clients are, they have real time access to their full accounting records across all their devices. We can be sure when talking to them that both parties are looking at the most up-to-date information and the only version of the data! Through FreeAgent’s document centre there’s no need for copies of spreadsheets and documents to be emailed, because all important information can be uploaded directly to the centre. Data accuracy and security is far better using the cloud system.

Features that spreadsheets can’t offer

The benefits of FreeAgent over spreadsheets just go on and on. The software can easily cope with multi-currency transactions, it also can prepare profitability reports for individual contracts and jobs and provide high level financial reporting. Unlike spreadsheets, it incorporates both payroll and VAT functionality so all of your business’s records are in one place, easily accessible and constantly updated. Contractors can invoice their clients professionally and use the software to help them ensure they are paid on time, which is a huge priority for everyone.

As accountants, we always remind clients of important tax filing dates, file approved returns and provide details of how to make the payments. FreeAgent supports this with their Tax Timeline, which highlights future deadlines and liabilities based on the records that have been entered. We monitor the records of all of our clients and send monthly or quarterly advisory health check reports, providing tax planning advice and opportunities. We can analyse and interpret the data, identify trends, spot issues and provide solutions much earlier than in a spreadsheet world. FreeAgent creates reports, we interpret and can then advise at any time and very quickly.

How switching from spreadsheets saved one client £11,000

A particular client stands out in my mind as having turned his business accounting around by switching to FreeAgent. For years with his previous accountant, the client had paid large tax bills; almost always late because his accountant had to sort the spreadsheet. He just accepted the filing penalties and thought that it was the norm. He was eventually referred to OrangeGenie Accountancy by a friend. We use FreeAgent for all of our clients and having got him set up we spotted some obvious opportunities. It wasn’t enough for us to accept the past and move on – we restated two years’ worth of accounts and managed to get the client an £11,000 tax refund in time to pay for his wedding! He is now on track every year, pays nothing like the tax he used to, despite his business being more profitable. He’s in control and that’s due to ditching the spreadsheet!

Cloud software has allowed us as accountants to collaborate better and forge deeper relationships with our clients. We can spend time getting to know clients, understand their business and aspirations, and work with them to ensure they achieve their goals knowing we have accurate reports and systems to rely on. Gone are the days when an accountant was only contacted at the yearend for a set of accounts and a commentary on what their client should have done to reduce tax bills. Now we can talk to clients all year and everyone involved feels secure in the knowledge that they’re working with the safest, most efficient accounting solution on offer.

*YouGov 2015, Microbusiness Owners and Their Finances

About Orange Genie

Orange Genie Accountancy are a specialist firm of Contractor Accountants. We focus on building exceptional relationships with our clients, working together to achieve their aspirations. Working in partnership we can ensure that clients stay on top of ever evolving legislation and changing rules, they benefit from efficient tax planning and they can concentrate on their business in the safe knowledge that we understand theirs.

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