In this video, I’m going to explain how to record expenses in FreeAgent.
Before you get started, it’s worth making sure that the cost you’re about to record is definitely an expense, and not a bill or a payment from the business bank account.
When you are ready to get started, there are a few different ways you can create an expense in FreeAgent. You could select New Expense from the Quick Links menu on the overview screen, or navigate to My Money > Expenses, or just Expenses if you are a sole trader with no staff, and select Add New Expense.
Alternatively, if you’ve set a Project up to manage all your work for a particular job, you can add your own expenses directly to the Project itself. I’m going to show you how to create an expense this way, but whichever method you use, the process of recording the expense is very similar.
First, navigate to Work and Projects. Select the project you want to attach this expense to, and go to Add New Expense. You’ll then be asked to provide some information about the expense you are recording. Unless you are recording a refund for an expense you have already entered, select Payment as the expense Type.
Now you need to select a Category for the expense. It’s important that you choose the right category from the dropdown menu, so that FreeAgent can apply the right amount of VAT. If you want to, you can customise this list and add new categories to it. If you are not sure which expense category to choose, you should talk it through with your accountant.
Next, enter the date and the currency of the expense. Remember to choose the date that you actually incurred the expense, not the date that you are recording it.
The next step is to enter the value of the expense, inclusive of VAT. You need to tell FreeAgent which rate of VAT applies. If you choose the Auto setting, FreeAgent will apply the standard rate of VAT for the expense category you’ve chosen. Alternatively, you can choose a set percentage, or manually enter a specific amount. Bec careful if you are doing this though – the setting you choose here will be pulled through to your VAT return.
Next, enter a description. Include as much detail as possible. FreeAgent will automatically choose a receipt reference for you, but you can also type your own in if you prefer.
As we linked this expense to a project at the start of the process, the name of the project is already displayed in the Link to Project field. If you chose a different way to create your expense, and you want to link it to a project, select the appropriate one from the dropdown menu.
if you want to rebill the expense back to your client, select the appropriate option from the dropdown field. If this is a recurring expense, choose the appropriate timescale from the dropdown menu. FreeAgent will automatically generate this expense at the chosen intervals, until your specified end date. If you want the expense to occur indefinitely, just leave the end date blank.
if you have a receipt for the expense, upload a scanned image of it, or a photo of it taken from your camera or smartphone, and enter a description. If there’s information on both sides of the receipt, you’ll need to scan the front and back and upload them as separate images.
When you’ve entered all this information, select Create New Expense, or if you have other expenses to add, hit Create and Add Another. Repeat these steps until you’ve added all your own expenses for this particular project.