How to set up your FreeAgent account

This article explains how to set up your FreeAgent account after you’ve signed up.

This article is for UK-based businesses. If your business is based outside of the UK, find out how to set up your FreeAgent account.

There is also a ‘Universal’ account type which can be used for UK businesses as well as international businesses. US and Universal accounts don't include some of the complex functionality that other UK-based business types require, such as VAT, payroll, Self Assessment and Corporation Tax computations.

Enter your business details

First, you will need to select an account type. UK-based businesses can choose either a 'Sole Trader', 'Partnership', 'Limited Liability Partnership' or 'Limited Company' account type. 

Select the appropriate option from the ‘Confirm your Business Type’ drop-down menu. Please note that it’s important to select the appropriate account type as this cannot be changed later.

If your business is a charity, not-for-profit organisation or social enterprise, find out how to choose the appropriate account type.

Next, select the category that best describes your business from the ‘Business Category’ drop-down menu.

If your business is a charity, not-for-profit organisation, social enterprise or community interest company, select ‘Charity/NFP/CIC'.

Then, enter your business name and address. These details will appear on the invoices you create in FreeAgent.

If your business is a UK limited company or a limited liability partnership, you will need to enter its registration number as you’re legally required to include this on your invoices. Select ‘Find company details’ to automatically populate this information from the details held at Companies House.

Select ‘Save and Continue’ to proceed to the next step.

Enter your accounting dates

Next, you’ll need to enter your business’s accounting dates and accounting basis (if applicable).

When did you officially start your business?

For sole traders and partnerships, this will be the same date that you notified HMRC that the business started trading.

For limited companies and limited liability partnerships, this will be the incorporation date for the business, which can be found on the certificate of incorporation issued by Companies House.

When did your first accounting year end?

The ‘First Accounting Year End Date’ is the date that you want FreeAgent to prepare your first accounting year to.

If your FreeAgent account is for a sole trader or partnership, the year end date in most cases will be 5th April, to coincide with the tax year. If you’re unsure of the correct year end date, please check your HMRC personal account or speak to your accountant.

If your business is a limited company, the year end date will be one year from the end of the month in which you started the company, unless you've filed a form with Companies House to change your year end date. For example, if your company start date was 5th June 2021, your first accounting year end date would be 30th June 2022. If you’re unsure which date to choose, please check with Companies House or speak to your accountant.

Please note that the date that you enter as your ‘First Accounting Year End Date’ will be used by FreeAgent to set the year end for future years too. For example, if your first accounting year ended on 30th June 2022, FreeAgent will prepare your accounting reports to 30th June 2023, 30th June 2024 etc.

What date do you want to keep your books from?

The 'FreeAgent Start Date' is the date from which you're going to start keeping your books in FreeAgent. Your choice of date will depend on whether your business is new or existing.

If your business is new or if you’ve been trading for less than a year, you may decide to start keeping your books in FreeAgent from the start date of your business. If you’ve been trading for longer, you may choose the start of the most recent accounting year.

All bank transactions, invoices, bills, out-of-pocket expenses, capital assets and journal entries entered into FreeAgent need to be dated on or after your FreeAgent start date. If you enter any of these with a date before your FreeAgent start date, they will not be counted in FreeAgent.

Select ‘Save and Continue’ to proceed to the next step.

Accounting basis

If you’re setting up a sole trader or partnership account, you’ll be asked to confirm whether you’d like to prepare your accounts using the ‘Traditional (accruals) basis’ or ‘Cash basis’. This is different from using the cash basis to prepare your VAT returns, so please check with your accountant if you’re unsure which basis you should be using for your accounts.

The main differences between preparing your accounts using the accruals accounting basis or the cash accounting basis are when your income and costs will be recorded on your profit and loss report in FreeAgent. Find out how to choose the appropriate accounting basis.

Select ‘Save and Continue’ to proceed to the next step.

Enter your VAT details

Next, you have the option to enter your VAT information.

Not registered

If your business isn’t registered for VAT, or you don't have the details to hand and want to enter these later, choose 'Not Registered' from the ‘Are you VAT Registered?’ drop-down menu.

Please note that if you are VAT registered, you will need to enter these VAT details before issuing your first invoice.

Registration applied for

If you’ve applied for VAT registration but haven’t yet received your VAT certificate from HMRC, choose 'Registration Applied For' from the ‘Are you VAT Registered?’ drop-down menu and enter the date you expect the certificate to take effect from. Here’s more information on waiting for your VAT registration number.

Registered

If your business is registered for VAT, choose 'Registered' from the ‘Are you VAT Registered?’ drop-down menu and enter the relevant details.

Select ‘Save and Continue’ to proceed to the next step.

About You

If you have a subsidised account via NatWest, Royal Bank of Scotland, Ulster Bank NI or Mettle, the ‘About You’ section allows you to shape your FreeAgent experience. We’ll provide tips and suggestions based on your answers. 

First, select whether or not you have an accountant.

Select ‘Save and Continue’ to proceed to the next step.

Then, select the relevant options below ‘What would you like to do in FreeAgent?’

Select 'Save and Continue' to proceed to the next step.

Banking setup

Banking is one of the most important features in FreeAgent. The software prepares your business’s accounts based on the explanations you give for the money paid into and out of your business bank accounts.

Account name

Enter an account name for the bank account to make it easy to identify in case you add more bank accounts later.

By default FreeAgent assumes that all bank accounts are business bank accounts. If you’re a sole trader, or a partner in a non-limited liability partnership, and you haven’t opened a business bank account for your business, you can tick the checkbox to mark it as a personal account.

Learn more about the differences between business and personal accounts.

Bank details

In order to enable a bank feed or upload bank statements from your online banking, you’ll need to enter your bank account’s sort code and account number in the fields provided. If you don’t want to do this, or would prefer to do this later, leave these blank.

Opening balance

The opening balance is the bank balance before any new transactions on the date you choose as your FreeAgent start date (or, in other words, the balance as at the close of play on the previous day). Enter the exact balance in the field provided.

If you enable a bank feed on or after 30th September 2022 with a supported bank, FreeAgent’s ‘Balance at Bank’ feature will automatically populate your opening bank balance.

Select 'Save and Finish' to complete the setup process and start using FreeAgent.

Once you’ve signed up for a FreeAgent account, you’ll receive an email asking you to verify your email address. It’s important that you follow the instructions in the email to confirm your account to prevent temporary limitations being placed on your account.

What should I do next?

Once you’ve set up and confirmed your FreeAgent account, we recommend reviewing our guide to getting started with FreeAgent.