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FreeAgent - is it a serious accounting program?

Serious flaws discovered

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Since Accountex I have been happily using Freeagent as a Sales Ledger, for which it is excellent. Create Contacts, send them invoices and it chases them up automatically by email. Reconcile their payments against the invoices and they get a thankyou email. This has been an effective tool in collecting payments from clients which I was previously poor at chasing up.

The cracks begin to show when you issue a credit note - there is no way to set this off against an invoice, and the Helpline suggests a messy 'workaround'.

We have also been issuing invoices for rent to tenants, with some success. The first problem here is that an account cannot go into credit (you can only allocate money received to invoices issued) so tenants who are required to pay their rent in advance cannot be sent a statement showing that.

Today I was trying to record the receipt of a rental deposit so I went looking for the Chart of Accounts, expecting to add a special category as it would be non-standard. Under Settings there are only Income and Expenditure accounts so I phoned the helpline. I was told that Balance Sheet accounts are fixed, and you cannot view them on screen, so I followed the advice to export the chart in a CSV file. This showed that sub-numbers had been auto-added when I had added Bank Accounts (750-1, 750-2 etc)

I was told that there was another 'workaround' which involved showing the rental deposit as a rent refund then doing something else but by then I had lost the will to live.

FreeAgent is owned by RBS so there should be no shortage of funding. It seems there are no early plans to turn it into a proper accounting program as the energies are going into become MTD compliant.

I just cannot see how I could recommend it as a business tool other than to clients who merely run Income and Expenditure accounts with fairly simple businesses. By the way there is limited access to direct Bank Feeds outside RBS group and Barclays, so customers are being recommended to screenscrape via Yodlee (meaning they break their internet banking agreements over security and risk no refunds when defrauded)

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By Matrix
23rd Oct 2018 16:24

FreeAgent is limited and you sometimes have to do workarounds. It is designed for the micro business/contractor market, although I also have larger clients using it. It does not suit all so I have different software options for my clients.

FreeAgent are receptive to sundry changes but are not interested in making changes for a minority of their customers, since what it does, it does very well.

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By Maslins
23rd Oct 2018 16:50

For offsetting credit notes you need to do two manual bank entries (pretending the customer physically paid then you physically refunded). Yes a workaround, but not a particularly onerous one.

For the advanced payments, I believe part of the reason this is messy is VAT, as it can trigger an earlier VAT point.

FreeAgent is great at what it does...but it is very much aimed at making life simple for the non-accountant micro business owner. There are multiple slightly quirky situations that it can't cope with. Your choice is whether you can live with that/adapt your practices to suit the software, or whether you abandon it to try to find the perfect system for you (if one exists).

Can't remember where I read it, but I heard a modern quote along the lines of "build your business around the software, not your software around the business". Initially I thought it sounded daft...but I've grown to think it's valid advice.

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23rd Oct 2018 17:10

Agree with the above, FA was my first Cloud accounting app and has been brilliant for several of my small OMBs which, to their credit, is the market they promote as their target. Having said that I've had two larger companies use it and it suited them perfectly until they needed to migrate to a more sophisticated system.

The lack of flexibility in Balance Sheet accounts as well as several other more "accountant" areas, such as journal entries, is more of a problem for the accountant than the business, for whom it's designed.

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By Matrix
23rd Oct 2018 18:33

You could set up new bank accounts for the rent deposits. I used to do that for inter company loans - I had a client with 7 figure turnover and a sub and always managed the accounting side with the help of FA support desk. I also set up new capital accounts for revaluation reserve etc. They looked a bit odd but no one really used them except me.

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to Matrix
24th Oct 2018 16:36

Thanks - that's a really good idea

.... might work for Contra Accounts too?

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By Matrix
to davidross
24th Oct 2018 18:16

There is a Contra account already but I suppose you could use bank accounts for any balance sheet account you need. You can't post journals to it though so would need to reconcile as a transfer between "bank" accounts. Or use journals via Contra account.

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24th Oct 2018 21:12

Freeagent is excellent for contractors. It is simplified software and has its restrictions (hence the messy workarounds). I find it doesn't tend to be a good fit for other businesses particularly as they grow. I use Freeagent for contractors and Xero for the majority of the rest of my other clients.

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24th Oct 2018 21:13

Freeagent is excellent for contractors. It is simplified software and has its restrictions (hence the messy workarounds). I find it doesn't tend to be a good fit for other businesses particularly as they grow. I use Freeagent for contractors and Xero for the majority of the rest of my other clients.

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24th Oct 2018 21:13

Freeagent is excellent for contractors. It is simplified software and has its restrictions (hence the messy workarounds). I find it doesn't tend to be a good fit for other businesses particularly as they grow. I use Freeagent for contractors and Xero for the majority of the rest of my other clients.

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to Jenny2018
25th Oct 2018 09:40

You can say that again!

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