Recording income; must I create invoices?
How to record income if you don't want to create sales invoices in FreeAgent. Remember you will almost certainly have to create invoices somehow if you're registered for VAT.
When you record income in FreeAgent, it's usually by way of sales invoices.
If you're registered for VAT then HMRC say you must nearly always give your customers VAT invoices. So it makes sense to create these invoices in FreeAgent.
But sometimes you may not want to create sales invoices. For instance, you might be 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.
You can also add a new income category if you'd like to.
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