FreeAgent Central aims at… free agents who hate book-keeping
February 14 Mike Butcher
Privately-backed FreeAgent Central (FAC) is a new online money management and accounting tool intended for small, service businesses of 1-3 employees or sole traders in the service sector (so not retailers). The UK firm comes out of beta today and is also available from now as a planning tool in the US/globally, but without the tax functionality. The reason it’s interesting is that it’s a disruptive online application which could well develop into quite a powerful system, especially if it starts - as the firm claims - to ‘learn’ how you spend money and run your business. They have also got a long way without significant venture backing, unusual in this personal finance space.
FAC costs up to £25 per month but in theory you could buy an off the shelf accounting product for £100. Why spend three times as much? It’s built to address ’spreadsheet hell’ and double entry book-keeping and do all the grunt work in the background while giving your professional accountant the figures needed to prepare regulatory accounts. FAC is also useful in that it uses an algorithm that is the equivalent of that used by the major banks, and of course your work is backed-up on their servers , so it’s safe if you drop your laptop, as freelancers are wont to do. Other features include auto-allocation of monies you draw between expenses, salary and company dividend.
Also, FAC says its system will tell you your tax position before your professional advisor, who might cost £65 to £90 per month. (Although my experience of freelancers is that they are realy getting into using the online tax form system in the UK. But FAC would be a nice early warning system).
All accounts start with a free 30-day trial. The UK account for the UK tax regime costs sole traders £15 per month, UK Partnerships/LLPs £20 and Ltd companies £25. Users can refer other customers and get a 10% discount. (Make ten successful referrals and you can use FreeAgent for free). The Universal Account can be used by anyone costs US $20 per month and uses all the sites features but without the tax functionality, although this is going to be rolled out soon. The current plan is to target US, Canada, South Africa, Ireland and Australia/NewZealand.
FAC uses electronic statement data to track money in and out of your business, such as QIF, OFX and some CSV formats. You can also export all of your FreeAgent data in CSV format. All information which passes between its servers and your computer is encrypted over SSL and host Rackspace is known for its tightly-controlled physical and online security. Only account owners - not FAC - can log in to their data.
Competitors in the ‘light-weight invoicing’ and small biz management arena - mainly in the US - include Freshbooks, BillMyClients and Blinksale, but FAC claims it has more features geared to smaller operations and allows freelancers to know their financial position in a more ongoing basis. Certainly the user comments I’ve read indicate some good feedback from beta testers.
What I’d like FAC to do moving forward is to do what Mint promises and start profiling me against others like me so I can learn from the crowd about how to run my business. That would be a start…
Comments
February 14th, 2008 at 12:28 pm
“as freelancers are want to do”
It’s ‘wont’, not ‘want’.
February 14th, 2008 at 1:49 pm
Also worth mentioning is http://www.kashflow.co.uk/ which is a UK specific web based accounting system.
February 14th, 2008 at 1:54 pm
Thanks for the props Mike. Your last point is well made. We know there is genuine value well beyond the ‘accounting’ data for customers, their advisors and, potentially, third parties. So yes, it is something we have firmly on the long distance roadmap.
Several issues: First, we need to accumulate a sufficient body of data to ensure we produce valuable information. Second, we’re managing sensitive business data and so need to give assurances that any aggregation work we undertake doesn’t compromise the security model. Third, we may need to build a business analytics engine to handle variances so that the information is statistically useful. Fourth: we need to be market and business specific as well as generic. Finally, we’re looking at ways of shortcutting to integrate into third party systems. Mint would be a natural fit so as I’m sure others are watching us, we’re watching them to figure the best way to serve customers.
One nit on the tax front - the work we’re doing to calculate personal and corporate taxes usually requires separate software or the services of a professional accountant. In the UK version, we’ve done the tax grunt work so removed several steps in the overall understanding of business finance. I won’t assert it is 100% and we do recommend users check with their advisors because there may be factors impacting the results that arise out of advice given by professionals.
I guess the piece you’re referring to is the government gateway which is still under development and to which we plan on integrating for the ‘go’ date in 2010. It’s all part of our efforts to remove friction but hide the complexity of a 600 year old system of business record keeping from which none of us can readily escape!
February 14th, 2008 at 8:26 pm
Also worth mentioning is http://www.time59.com which is designed for sole traders. A US program but has settings for UK.
February 15th, 2008 at 10:47 am
Doing your own accounts = False economy
The HMRC make it a piece of cake to sort your taxes out, but you end up paying through the nose for it.
Did my own accounts for a bit, but got someone else in to do it when I found it was taking up too much of my time. First thing he did was wipe £45k of our tax bill.
February 15th, 2008 at 11:31 am
Looks to be pretty useful site - I know a few people who struggle in this area, like Joel states in the comments however got to wonder if your money is better spent employing a professional expert to do this for you.
I also understand your comparison with attempting to include features from mint.com, but as that site is not open to UK users why would you put it in your post for TechCrunch UK? Don’t get me wrong I think mint.com looks awesome and I would love to be able to use it over here in the UK, but for now making comparisons with it for those of us that can’t use it is not ideal!
February 18th, 2008 at 5:54 pm
Having tried FreeAgentCentral for a while… it works nicely enough, but it doesn’t really seem all that necessary - you still have to do a tax return yourself (or pay for an accountant if you prefer an expert eye), and all this does is help you keep records. For a price. It’s a lot cheaper to use a notebook, and not that much harder to use simple spreadsheet. I just can’t see the need.
March 3rd, 2008 at 2:16 pm
Having played with Freshbooks, BT Bizzbox (a Northern business) and FreeAgent Central before, I wonder whether there is a SaaS application that is a no brainer for a startup. I am currently involved with three early stage startups. If I am to use FreeAgentCentral it will cost me a cool £75 per month. Everytime I look at this space, I come to one conclusion - keep using messy spreadsheets.
March 5th, 2008 at 8:34 pm
Manoj,
Take a look at the Kashflow product mentioned above. It will probably be ideal for your clients (unless they need intensive stock control). And it’s a lot cheaper than £75 a month!
If you are likely to have 5+ clients on it, then their Partner Programme is worth a peek too.
Best.
S