FreeAgent review

Tom Gorham Read more May 5, 2011

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£18

Price when reviewed

It was once widely accepted that the choice of accounts software for a small business was simple: Sage or QuickBooks. But the hegemony of these leading desktop applications is now being challenged by a new generation of web-based software. We test three of the best offerings.

If you fall into that broad category of small-business owner or sole trader who lacks accounting experience, you’re the target market for FreeAgent. The program employs a simple interface and everyday language throughout, so rather than entering Accounts Receivable or Accounts Payable as you do in Xero, transactions in FreeAgent are gathered under more prosaic headings, such as Work and Expenses.

Online accounts shootout

Intro
1. Xero
2. KashFlow
3. FreeAgent

As with the other applications, FreeAgent’s overview window gives a snapshot of important financial information, with tricks of its own – including a useful tax timeline showing upcoming deadlines. FreeAgent also lets you reorganise overview modules by dragging them around.

It’s fully multi-user. As in Xero, each user can have separate logins and passwords, and one of three roles. In another nod to ease of use, permissions are adjusted with a simple slider rather than a row of checkboxes.

FreeAgent is particularly suited to freelancers or contractors. You can organise expenses or income by project, and establish a budget for each to measure their profitability. But multi-user support, together with a time tracking feature, also makes FreeAgent an excellent project management tool for remote workers. Each user can log in and manage their own timesheets, while the project manager retains an overview of the entire project.

FreeAgent offers payroll features (employees are set up as users with no permissions to view or edit financial settings), but it lacks stock control. At least it does have a basic price list feature comparable to Xero’s inventory list, which lets you store items that can be added to quotes or invoices.

Nor does FreeAgent offer automatic bank feeds as Xero does, but its bank reconciliation tools are nearly as good. It makes a good job of tracking previously matched transactions and attempting to match similar transactions as they’re subsequently imported.

FreeAgent’s range of reports isn’t as extensive as Xero’s or KashFlow’s, but the main ones – trial balance, VAT, profit and loss, and journal entries – are here. In another nod to the freelancer, there’s a one-click report that creates a self-assessment summary for income tax purposes, the details of which you can copy to your tax return.

Invoices can be created from estimates, and can be sent by PDF and email, and you can add tags to insert variable data into the text of the latter. Of the three applications we looked at, FreeAgent provides the best-looking templates to build your invoices from, and if you’re creative and have an understanding of HTML and CSS, it’s easy to create your own.

A final handy extra is that you can create customisable payment reminders at set dates after invoice due dates, although, disappointingly, you can’t accept electronic payments other than PayPal, which may rule it out for larger businesses.

Of the three services tested, we found FreeAgent the easiest to use, and at a very reasonable price. If you’re a contractor or freelancer, its time-tracking and project management tools make it easy to recommend.