Our clients don’t need to become bookkeeping experts. But understanding a few key parts of FreeAgent will help you make better decisions, avoid surprises and get more value from our support.
1. FreeAgent is only as accurate as the information entered
FreeAgent can’t tell you what’s happening in your business if your bank accounts aren’t up to date, transactions haven’t been explained, or invoices haven’t been raised correctly.
Golden Rule: Keep it updated little and often.
2. Your Tax Timeline is your best friend
The Tax Timeline gives an estimate of future tax liabilities based on the information currently in FreeAgent.
It’s one of the easiest ways to:
- See upcoming tax payments
- Plan cash flow
- Avoid nasty surprises
Check it regularly against your tax savings pot to make sure the savings %s don’t need to be adjusted (up or down).
3. Estimates are not final tax bills
The figures shown in FreeAgent are estimates.
They become more accurate when:
- Your bookkeeping is up to date
- Bank accounts are fully reconciled
- All income and expenses have been recorded
Use them for planning, not as the final amount due, that’s available from HMRC, only once everything is submitted.
4. Every unexplained transaction needs attention
If FreeAgent is showing unexplained transactions, it means there is work still to do.
Leaving transactions unexplained can affect:
- VAT return
- MTD for Income Tax filings
- Tax estimates
- Management information
- Year-end accounts
Think of unexplained transactions as your bookkeeping to-do list.
5. Taking money from the business isn’t always tax-free
Many business owners assume money in the bank is theirs to spend.
Unfortunately, HMRC doesn’t always agree. Sole traders, the money is yours. LTDs, it’s more complicated.
Before taking large amounts from the business, check:
- Tax liabilities
- Director’s loan position
- Corporation Tax provisions
If you’re unsure, ask us first.
6. Attach receipts as you go
The easiest receipt is the one you deal with today.
Whether you use:
- FreeAgent
- Dext
- Apron
- Smart Capture (in FreeAgent)
Try to upload receipts when you receive them, not six months later.
Future You will be grateful.
7. Your business bank account should be used for business
Mixing personal and business spending creates confusion and can increase bookkeeping costs.
Whenever possible:
- Business income → Business account
- Business expenses → Business account
- Personal spending → Personal account
Life gets much easier when everything has a home.
8. Profit does not equal cash
This catches a lot of business owners out.
You can:
- Be profitable but have little cash available
- Have cash in the bank but still owe tax
Regularly checking ALL of these:
- Profit & Loss
- Bank balances
- Tax Timeline
gives a much more complete picture.
9. FreeAgent isn’t just for compliance
Many people only log in when we ask for something.
The most successful business owners use FreeAgent to:
- Monitor sales
- Track profitability
- Plan for tax
- Understand trends
- Make decisions
It’s not just an accounting system. It’s a business management tool. Use it!
10. You don’t need to know everything
That’s our job.
You don’t need to know every tax rule or accounting treatment.
What we do ask is that you:
- Keep records up to date
- Ask questions when you’re unsure
- Engage with the information available
The more accurate the data, the better advice we can provide.
The CBC Challenge
Spend just 10 minutes every week checking:
- Tax Timeline
- Profit & Loss Report
- Unexplained and “to approve” Transactions
- Cash flow prediction for the next 3 months
If there’s anything you don’t understand, make a note and bring it to Finance Friday (3rd Friday of every month at 11am) or get in touch by email [email protected]
Remember: understanding your numbers isn’t about becoming an accountant. It’s about running your business with confidence and we’re here to help you with that.
Caroline x
