Insights from FreeAgent: a Q&A

Managing cashflow is one of the most important aspects of running a business. If you don’t know what’s coming in and out, it’s hard to ‘plan for success’. Furthermore, by effectively analysing cashflow you can get rid of those costly processes that end up costing your business money, while investing more in activities that drive income.

Accountancy software can be a great tool to help you manage your cash flow. For the second year in a row, we’ve been sponsored by FreeAgent (small business accountancy software of the year 2018) who are experienced in helping entrepreneurs manage their finances. We sat down with FreeAgent to pick their brains on everything accounting:

1 – Hi. Can you tell us more about FreeAgent and how you support entrepreneurs?

FreeAgent is award-winning cloud accounting software specifically designed for small businesses and freelancers. We help people keep on top of their finances, manage projects, raise invoices, file tax returns and spend their time on the work they love – not the paperwork they don’t.

2 – At what stage should budget-conscious entrepreneurs consider investing in accounting software?

Ideally, from the start. If you’re an entrepreneur with grand ambitions for your business, you’re going to be looking pretty quickly at building up your sales, boosting your cash flow and growing your venture, so it’s a good idea to have a system in place as early as possible to manage this. The more organised and seamless your financial admin is, the more time you’ll have to focus on running and growing your business.

The other major benefit of investing in software at the start of your business journey is that you’ll get into good habits when it comes to your finances. Instead of cobbling together a system involving boxes of expense receipts and complex spreadsheets, good software will intuitively show you how to manage your finances more effectively and help you see how your business is performing. You’ll have far less risk of missing out costs and paying the wrong amount of tax.

3 – What advice do you have for entrepreneurs who are thinking about purchasing accounting software?

Do your research! There’s no one-size-fits-all package out there, so look at a few options and see which one has the functionality that best suits your business. If there is a free trial available, sign up and see whether the software feels intuitive on first use or if it feels too complicated.

We also recommend seeking out as many reviews as possible, ideally from similar businesses to yours. Check review sites like TrustPilot or and see whether there are common themes that are raised by reviewers or potential issues that pose a problem to your business. And don’t forget social media. If there’s a particular software that regularly receives rave reviews and glowing feedback from its customers on Twitter and Facebook then it’s probably a good idea to check it out.

4 – If there was one myth you could ‘bust’ in your industry, what would it be and why?

That accounting software is dull and boring – because it really isn’t! A great piece of accounting software helps empower people when it comes to understanding their finances and give them vital insights about how to run their business better, which can be really exciting. We have customers who regularly tell us that we’ve made accounting fun and have made them feel smart about their finances, which is the highest compliment we can receive.

The other myth that needs to be busted is that business finances are scary. So many people are apprehensive about doing their accounts, either because they’ve had a bad experience with admin in the past (e.g using spreadsheets or complicated desktop systems) or because they’ve heard horror stories from other small business owners. Of course, once they invest in good software, that fear usually disappears pretty quickly but it’s a very unhelpful and unnecessary mindset to have.

5 – One of the cool features on FreeAgent is the ability to ‘map out’ the financial performance of a business. Are there any typical ‘warning signs’ entrepreneurs should look for in these models that may inhibit their business growth?

One of the main factors that inhibits business growth is not having enough cash coming in. It’s therefore important to regularly check your cash flow, so you can see whether your business is bringing in more cash than it’s spending and then address any problems promptly.

Your profit and loss account is also an invaluable point of reference, as it allows you to see if your business is earning enough from its day-to-day activities to cover the costs that it’s incurring. You should always keep on top of the invoices that you issue and have a plan in place for chasing late-paying clients if any invoices become overdue.

It’s also important to keep on top of your tax liabilities, as an unexpected (or overlooked) tax bill can create a major headache for your business. FreeAgent includes a unique Tax Timeline that’s designed to give you an at-a-glance overview of how much tax you owe – and, more importantly, when you have to pay it!

6 – Are there any other growth tips or tricks entrepreneurs should consider to get the most out of their accounting software?

Don’t just focus on your cash flow. There are a lot of financial insights about your business that you can learn from other parts of your software. For example, if it has time tracking functionality, you can use this to see how much time you spend doing work that you can’t bill clients for. From this, you’ll be able to identify how frequently you’re in lengthy meetings or doing unpaid research, and decide whether to start charging clients for this kind of work.

It’s a good idea to stay on top of your out-of-pocket expenses too. This means including all of your applicable costs so you don’t overpay any tax, while also tracking how much your business owes you.

7 – We believe you have a couple of FreeAgent deals available for anyone thinking of giving the software a go. Can you tell us more about this?

FreeAgent is part of NatWest and Royal Bank of Scotland’s small business offering. This means that if you have a business banking current account with either bank, you can receive a FreeAgent account free of charge with no monthly subscription fee ( subject to you retaining your NatWest or Royal Bank of Scotland business banking current account).

Our standard prices for customers who don’t bank with either NatWest or Royal Bank of Scotland are:

  • Sole trader – £9.50 per month +VAT (for the first 6 months, then £19 per month + VAT after)
  • Partnership/LLP – £12 per month +VAT (for the first 6 months, then £24 per month + VAT after)
  • Ltd company – £14.50 per month + VAT (for the first 6 months, then £29 per month + VAT after)

Registered charities can apply for a 50% discount to their subscription fee.

We also offer a 30-day, no obligation free trial so all our prospective customers can test our software before deciding whether to subscribe.

For Newcastle Startup Week, we’re offering a special promotion of a 3-month free trial and 10% discount for life on our standard monthly subscription prices.

8 – Speaking of a Startup Week discount… It’s the second year FreeAgent is sponsoring Newcastle Startup Week! What motivated you to get involved with our event?

We’re all about supporting small businesses and helping them grow – and since the North East has a thriving startup scene and it’s pretty close to us in Edinburgh, where we’re based, it’s a perfect match for us!

Newcastle Startup Week is a great initiative for people who are just starting out or are considering doing so. It offers them a wide range of helpful, practical insights about running a business, so we wanted to get involved and add our own expertise into the mix. Financial admin can be an especially daunting prospect for people at this stage in their business journey, so by sponsoring the event, we hope we can provide attendees with helpful insights that demystify small business accounting and make it feel a lot less scary!

9 – Finally, how can businesses get in touch with FreeAgent to learn more about your software?

Visit our website where you can find information about FreeAgent’s features, see customer reviews and take a free trial of the software.

You can also find out more about us on our social media pages – just search for @freeagent on Twitter and FreeAgentApp on Facebook.

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