About two months ago I was in a dark place: I was working extremely hard, but I didn't seem to be making any money, and on top of all that I got landed with the worst client I've ever had in my life - who ended up costing me about £8,000. My finances were in a sorry state, and thinking about them made me want to curl up in a ball and die. Then I discovered FreeAgent, my turnover and profit both pretty much doubled every month, and I now actually really enjoy doing my accounts!
How it Started
I told you all last week about how I fired my accountants. They use a system whereby you simply send them your expenses and invoices each month, and "they do the rest". It sounds great in principle, but in practice I had absolutely no idea what was going on with my business' finances. I didn't know if I was making a profit, a loss, how much I was turning over each month, how much I could pay myself, or how much I should hold back for tax. It was all one big painfully-poorly organised guessing game.
I was complaining to my good friend Ryan Roberts about this one day, and he suggested that I check out FreeAgent. The name was one that I'd heard before, but it wasn't an app that I'd ever properly had a look at. After watching the introduction video on the home page, I decided it was worth giving a try - which turned out to be my best business decision of 2009.
What is it, & Why is it Any Different from the Rest?
FreeAgent is an accounting web application, it allows you to track your finances directly from your bank account(s), manage contacts, create and send invoices, and for UK users - do some very comprehensive tax calculations.
When you sign up for FreeAgent you get your own URL (http://yourcompany.freeagentcentral.com) and login, much in the same way that BaseCamp is set up. From there you log in to your FreeAgent account, which has a beautifully simple and easy-to-use interface.
I tried several online and offline competitors of FreeAgent including Xero, FreshBooks, Billings, and a lot of others that I can't even remember the names of. None of them did exactly what I wanted, they were all too complicated, too clunky, or too simple. In my opinion FreeAgent is the porridge that's "just right".
Why I Love it
I could talk about some of the other awesome features; like the fact that you can create and send invoices easily, import contacts from BaseCamp/HighRise, upload time-sheets, or set project level pricing and invoice-numbering... and those features are all amazing, but they aren't what transformed my business.
Being able to easily monitor my income, cash flow, invoices, and bills did.
On my FreeAgent account I've set up both my business bank account, and my business Paypal account. At the beginning of each week, I download an electronic statement from each of them, and upload them into FreeAgent. The first couple of times I had to explain to FreeAgent what each transaction was, bill payments, expenses, invoice payments, my own salary, bank charges, and the list goes on. The killer feature is that FreeAgent is smart, it learns every time you import transactions. Now when I import a fresh bank statement it automatically marks invoices and bills as paid when it sees the transactions, adds whatever I paid myself to my salary records, and updates all my tax calculations based on the new transactions.
Essentially this is what my accountants used to do each month when I sent them my details, but the difference here is that I can see and understand everything that is going on. On the dashboard I see a graph of my income for the last 5 months, which invoices are currently still awaiting payments, important tax return dates that are coming up, how much money is in my bank account(s), and my company's overall profit for the year so far.
Having this in place means that I'm constantly aware of what work I'm doing during the day, and whether or not it's contributing to an outstanding invoice in FreeAgent. This has meant that for the last 2 months I've managed to focus much more on what makes money, and spend less time on what doesn't. It's been pretty a eye-opening experience, and I've had to make some tough decisions (including letting my outsourced employee go), but the results speak for themselves.
We are now half-way through October, and I've already turned over 4 times as much as I did in July, and with a much higher profit margin.
What About Accountants?
When I started using FreeAgent and it improved every aspect of my business, I tried to convince my accountants to start using it with me (seeing as FreeAgent fully supports accountants, and allows you to give them a log-in). They (foolishly) didn't play ball, and my article about firing them came about as a result of that.
I'm not confident enough to take full responsibility of my accounts (I specialise in design and code, not tax law) - so I've now started working with an accounting company... [edited, Feb2011] who were good, but very expensive. I've been using FreeAgent now for about 6 months on my own, and I'm doing ok so far. I'll probably hire in a freelance accountant temporarily once or twice a year to look things over.
Now: The GiveAway Competition
Please note that the competition is now closed, however you can still sign up and get a massive 10% discount every single month if you use the code '32wxrass' when you sign up. Don't forget that you get a 30 day trial anyway, so you'll get a good run before you have to make any decisions!
As if that wasn't enough, I had a long chat to Ed Molyneux (the CEO of FreeAgent) in preparation for this post, and we've put together what I think is a pretty awesome giveaway package.
In what is definitely one of the best competitions I've ever had the privilege of running on this blog, FreeAgent are giving away a massive 3 Free accounts for 6 months to 3 lucky winners. Let's have a quick reminder of FreeAgent's awesome features before I tell you how you can win:
All of The Features, In Two Little Lists
- Manage Projects & Time Manage your projects and contacts, track the time you spend and create flexible timesheet reports.
- Simple, Powerful Invoicing Create great looking invoices with no fuss. Email them to the client and easily track through to payment.
- Keep track of Expenses Keep tabs on your business and out-of-pocket expenses and quickly rebill to clients.
- Superior Online Banking Online banking that's better than the banks. Compare accounts and track balances.
- Realtime Accounts No complicated procedures, FreeAgent simply works out your accounts as you run your business.
- Unrivalled Tax Features Our unique Tax timeline lets you see important UK income, VAT and corporate tax dates and how much is due.
How To Win
Winning this competition couldn't be easier! All you have to do is sign up to a free 30 day trial of FreeAgent to see what you think of it using the link below - I've even included my referral code which gives you a 10% discount if you choose to sign up after the first 30 days. Not a 10% discount for the first month, a 10% discount forever.
Once you've signed up for your free trial, just leave a comment below telling me what you think of FreeAgent!
The competition will run for 1 week from today, ending on Tuesday the 20th of October. Then we'll randomly select 3 winners from the comments, and the FreeAgent team will verify that those people have signed up for a FreeAgent account. After that the winners will have their accounts extended for 6 more months free of charge!
The best part is that for every person who you refer to FreeAgent, you'll get a further 10% off, forever. So if you refer 10 people, you'll never pay a penny for FreeAgent again. Not too shabby eh?