FreeAgent is a cloud-based accounting program that has been around since 2007. It was developed in the UK to meet the needs of small businesses and freelancers there. Because of that, many features, especially those related to tax payments, are better suited for businesses outside of the U.S.
While freelancers and businesses that track and bill for time will appreciate FreeAgent’s robust time tracking and project features, those in need of inventory tracking and fixed asset options will have to look elsewhere.
Before signing up for the 30-day free trial, read our review to make sure FreeAgent will meet your business’s needs. While it made our list of best accounting software, that doesn’t mean it’s the best for you.
- Multi-currency options
- File VAT, self-assessment & RTI tax returns from the dashboard
- Built-in stopwatch & timesheets
- Send clients estimates & proposals
- Add attachments, customize & automate recurring invoices
- Have to use an external payment processor
- No expense or deadline tracking features
- No profit and loss statement
- Can’t print multiple invoices at one time
- No cash-basis accounting
FreeAgent covers the basics: it gets you paid, pays your bills and keeps the tax man happy. FreeAgent offers 256-bit encryption, multi-factor identification for logins and backs up your data in multiple regions so that your information is always protected and secure.
Because data is in the cloud, it’s accessible anywhere and from any device.
With FreeAgent, you can easily perform the central functions of business. You can send estimates and convert them to invoices later. If you’re a freelancer who bills hourly, the built-in stopwatch and time tracking will help.
The software also syncs with bank accounts and automatically imports transactions, but it doesn’t sync with credit cards like QuickBooks Online does.
The main dashboard presents a clear picture of your business’s cashflow and outstanding tax bills, but other reporting options are subpar. While FreeAgent does provide payroll processing, it’s only available to UK-based companies.
The same applies to its tax functions. U.S.-based businesses will not have many options with this software.
In FreeAgent, inventory is called “price list & stock.” Though you can add and track items, the software doesn’t provide reports or analysis for the information. It also doesn’t offer fixed asset schedules, so you’ll still have to track and calculate depreciation in spreadsheet adsheets.
Xero is one of the few competitors that include fixed asset schedules, as you can read in our Xero review.
The monthly fee covers all of FreeAgent’s basic functions. A limited number of apps and integrations can boost its options, but none of the 30 third-party offerings include fixed asset or payroll add-ons for U.S. businesses. For comparison, QuickBooks Online integrates with over 400 apps, and FreshBooks also has a wide variety, as you can read in our FreshBooks review.
While FreeAgent was built to address the core needs of any business, it doesn’t offer much beyond those functions. Unless you’re based in the U.K. or EU and need the features that support those regions, a competitor could be cheaper and include more options.
One thing we’re missing is ecommerce integration, like with Shopify. There are a few Zapier integrations, but that’s it.
FreeAgent only has one paid plan for U.S.-based businesses. It’s $24 per month, but the company often offers the first six months at half price for new customers. It lets you have unlimited clients, too, unlike FreshBooks.
$ 20 00monthly
- The plan includes all features FreeAgent has to offer;
Competitors built their plans around tiers that can be outgrown from a size or user perspective. You’ll pay for increased access or clients with them, but might not need all the other bells and whistles that come with the higher prices.
QuickBooks Online’s comparable plan, Simple Start, costs $20 per month. It many of the same features as FreeAgent, plus sales and sales tax tracking in U.S. dollars and integrated payment processing. Payroll processing costs extra, but is also available to U.S. businesses, as you can read in our QuickBooks Online review.
FreshBooks’s mid-tier plan is $25 a month and automatically sends payment reminders and adds late fees, but doesn’t include inventory or payroll.
Since you have to sign up for a payment processor, such as PayPal or Stripe, to process credit cards with FreeAgent, you’re stuck with their fees. QuickBooks Online, Wave and FreshBooks charge percentages of credit card transactions and per transaction, but those are easier to predict if your business has regular income.
To learn more about Wave, read our Wave review.
FreeAgent’s user-friendliness varies depending upon what you’re trying to accomplish.
Setting up an account for the free trial took us less than five minutes. After we were done, FreeAgent walks us through five setup screens. The first is unique to it. Since the software lets you track and bill for time and distance, it allows you to select your time zone and choose how to track distance.
After you decide how you want dates formatted and what units to use to track distance, FreeAgent has you select the date you started your business, the first accounting year end and what date you’d like it to start your books. It shows its strong tax focus next by asking if you’re registered for sales tax and, if you are, to input the rates and your registration number.
The last step to set up your account is to link your bank account or input its details manually. If you choose to link it, you’ll need your bank account number and routing information. If you just want to call it “business checking” and manually input an opening balance, you can do that, too.
FreeAgent’s dashboard has a “quick links” menu that will take you to where you can add your first invoice or expense, add a new contact or start a new project. There’s no guesswork involved.
The main menu bar above the dashboard can be confusing, though. Instead of labeling it “invoices” or “sales,” FreeAgent houses invoicing, time tracking and projects under “work.” Other menus, such as “bills,” “expenses” and “banking,” don’t have drop-down options.
We think FreeAgent could add a few to make expenses recurring or the path to other features clearer.
At the top of the dashboard, FreeAgent tracks your cashflow, both as a bar chart and in a box showing the current incoming and outgoing balances and their net. Under that, you’ll find more detailed information on invoices and expenses, your bank account and profit and loss.
While FreeAgent is user-friendly in that it’s easy to find what you’re looking for, its menu options could be better. For example, there is no option to make an expense recurring in the main menu and you can’t click on an expense in your bank account to make it recurring like you can with competitors.
Instead, you have to go through the process of inputting a new expense and selecting the recur option at the end. We think FreeAgent could improve its user-friendliness by providing a complete main menu and making adjustments to other processes like invoicing.
The ability to send, manage and easily track revenue is key to any business’s success. A quick and painless invoicing process will ensure that you spend less time trying to collect money and more time making it.
Unfortunately, you don’t get that with FreeAgent.
On the dashboard, select “new invoice” from the “quick links” or go to “work” and click on “invoicing.” Invoice fields aren’t displayed in a typical layout. Instead, you fill boxes with the required information.
One nice feature FreeAgent offers is the ability to customize the numbering on your invoices by project and contract. For example, you could choose to number by the project’s initials, such as “TA” for test article, then pick a numbering sequence.
At the bottom of the invoice, you get three email options: email it using your default email, email payment reminders and send a thank you once your client pays. If you haven’t already set up emails for these options, blue text under the check box will remind you.
When you click “create new invoice”, you’re taken to a screen that looks like a typical invoice. FreeAgent has eight templates, but that’s as far as customizing their appearance goes. Xero gives you the ability to upload Excel invoice templates, making customization options practically endless.
If you want to go beyond FreeAgent’s templates, you’ll need to know HTML or CSS.
Making you enter data before proceeding to the invoice is an odd and cumbersome choice. Wave, Xero and QuickBooks Online let you enter the information on the invoice template. That way, it’s easy to see where it’s going and if you need to edit it you don’t have to hit “back” on your browser.
There isn’t a good reason to do it the way FreeAgent does.
To add what you’re billing for to the invoice, click the green “add invoice item” button on the template. A pop-up box will appear with billing options including by increments of time, product, service and more. After inputting rate information and any other details, FreeAgent lets you add the item to the price list. That will save you time if it’s something you bill for often.
Once you have a draft invoice, you can send it by email or save it as a PDF. It’s not possible to print from the software, which means you can’t select a group of invoices to print in a batch from the invoice list. That you can’t do either is a drawback to using FreeAgent, especially if your business processes many invoices.
To send reminders, you have to set up automatic invoice emails, which is extremely complicated compared to the processes used by rivals. It takes more than eight steps and is managed through the “settings” menu, not the invoice screen. In QuickBooks Online, reminder email options display after saving an invoice and it takes seconds to set them up.
The rules you set apply to all invoices on which you check the box to send reminders. They can’t be customized by client or project. For example, some customers may have asked to only receive reminders if they’re 45 days past due. With FreshBooks, you can make the change at the client level, but you’d have to apply it to all clients in FreeAgent.
If you often bill for the same amount and service, or have recurring monthly fees, and do want to set it up as recurring, it’s not called a recurring invoice. In FreeAgent, it’s a recurring “profile,” an odd label that doesn’t relate to its function.
It is an option in the menu after setting up a draft invoice or under the “work” drop-down menu. It’s easy to set how often you want a recurring invoice sent out and an end date once you’re on the recurring profile setup screen.
FreeAgent has added some puzzling steps in its process to set up and send invoices that aren’t user-friendly or easy to follow.
FreeAgent has two main menu options related to paying bills: “bills” and “expenses.” You can create a mileage or expense claim for something bought for the business out of your own pocket under “expenses.”
You’ll appreciate the mileage claim form, which is unique to FreeAgent if you’re often traveling to job sites and billing clients for it. On the form, you input the date, total miles and a description. While a standard mileage rate appears, you can set a different one. You can also link mileage to a project or make it recurring.
The expense claim form has similar options, though you can also select a category from a large drop-down menu. Both mileage and expense claim forms allow you to attach a file to support the claim, such as a PDF of a receipt.
In FreeAgent, you don’t have to create a bill for an expense imported through a bank feed. You can just assign it a category, which is a nice time-saving feature.
To create a bill, click on the green “add new bill” button on the “bills” screen. The boxes and options for adding a new bill look much like the expense and mileage claim forms.
All the bills you’ve created display on the “bills” dashboard, but you can only filter or sort them by whether they’ve been paid or are overdue. If a customer claims you haven’t paid a bill and you want to look it up, you can’t filter or sort by their name, but you can sort the “supplier contact, details” column alphabetically.
If you purchase a capital asset, FreeAgent lets you assign it to one of four capital asset categories: “computer equipment purchase,” “fixtures and fitting purchase,” “motor vehicle purchase” and “other capital assets purchase.” It will then ask you to input the asset’s life and a description.
You can make double-sided entries on the “journal entries” page, which can be accessed through the “accounting” drop-down menu on the main navigation bar. The only way to add capital assets purchased before you started using FreeAgent is to input them manually in journal entries. You can’t import an existing spreadsheet like you can with Xero.
If your business has a lot of capital assets on the books, manual entry could be a time-consuming and annoying process.
While entering and paying expenses is simpler than invoicing in FreeAgent, it’s still not great.
The nine reports available in FreeAgent won’t get you far if you’re looking for in-depth analysis to guide your business decisions. It doesn’t offer ad hoc reporting or let you customize reports. They can be exported as a .csv file or PDF, though.
There are two aging reports, one for debtors and one for creditors, that have the typical 0-30 days, 31-60 days, 61-90 and over 90 days past due columns. The “aged debtors” report lists the customer and invoice while the “aged creditors” report lists the supplier and bill.
The reports aren’t very useful because you can’t filter or sort by a specific customer or project. You can’t select a range to see, for example, your average past due invoices in the past three months, either. They only display information at a single point in time.
The “customer sales” report provides a breakdown of transactions with customers by each month of the year. Again, there are no filtering or sorting options. All you can do is select a different monthly or yearly period.
Similarly, the “spending categories” report breaks out your expenses by month of the year.
If you’ve gone through the trouble of inputting capital assets into FreeAgent, the “capital assets” report lists the asset type, depreciation and disposals. It calculates the net book value for you. You can view your capital assets by their status and type. Status can be current or disposed and type is the category you set for the asset when you entered it.
The trial balance, a basic accounting reconciliation report, tells you if your books are in balance but doesn’t include reconciliation functions or the ability to add notes.
If you want to see what’s been booked to a specific account, go to the “show transactions” report and select from the account options. That’s helpful if you think you accidentally booked something to the wrong account.
It doesn’t appear that FreeAgent put much thought or resources into its business reports. QuickBooks Online and Xero give you far more for your money. If you lean on your financial reports heavily when forecasting or budgeting, you won’t be happy with what FreeAgent offers.
To get to your financial statements, go to the “accounting” tab on the navigation bar, then select “reports” from the drop-down menu. FreeAgent offers two: the profit and loss and the balance sheet. FreeAgent doesn’t include cashflow or equity statements. QuickBooks Online has a cashflow statement but not an equity one, while FreshBooks only gives you a profit and loss statement.
FreeAgent’s profit and loss statement shows two columns, debits and credits, flowing down to your retained profit carried forward. It doesn’t conform to the common presentation, though.
The operating loss or profit appears at the top and isn’t broken out between revenue and expenses. Line items such as retained profit and retained profit carried forward indicate that the statement is more of a hybrid profit and loss and equity statement.
The balance sheet also presents two columns for one period, and there is no way to add a comparison period. While you can expand current assets and liabilities, you can’t drill down on the line items or rearrange them. With only nine line items, it’s a simplistic balance sheet at best.
Both financial statements allow you to change the date range or select a custom date. While you can run the reports for different dates, you can’t see them side by side. You’d have to export them to a .csv file or PDF and copy and paste them next to each other.
We think FreeAgent’s financial statements aren’t that useful. They’re too simple and the lack of customization options doesn’t help.
If you’re a new user of cloud-based accounting software, the amount of help you receive while getting up and running can make all the difference. On its website, FreeAgent organizes its help library into pages for an FAQ, resources, product support and a blog. There are articles on topics ranging from banking to time tracking.
Screenshots and step-by-step instructions guide you through what you want to learn, but FreeAgent doesn’t include videos in the articles. The only help videos are at the bottom of the “getting started” page. They cover creating an invoice, recording an expense, managing a project and setting up a bank feed.
FreeAgent also hosts weekly webinars on those topics, but it doesn’t delve deeper into using the software.
The service also offers a free 20-minute phone call if you’re a new account and need help setting up. Phone support is available Monday through Friday during business hours in the GMT time zone. Email support is also an option.
FreeAgent should only be on your list if you’re in the U.K. or Europe. The tax accounting options for VAT, self-assessment and RTI are designed for businesses that operate in those regions.
In addition, the stopwatch, timesheets and project capabilities are geared to support freelancers or creative businesses. The software lacks robust inventory tracking for a product-based business.
Competitors offer more, especially in reports and financial statements, for about to the same price. Many processes, such as invoicing, involve too many unnecessary and unintuitive steps in FreeAgent and the add-ons and integrations still don’t include payroll processing for U.S. companies. While you can add and track capital assets, it has to be done manually.
FreeAgent is an expensive and illogical choice for an American company. The only thing that distinguishes it from competitors in America is the European tax functions. Otherwise, they do it better and for less.
Have you tried FreeAgent? If so, what did you think? Leave your comments below and thank you for reading.