Enter money owed at your FreeAgent start date

This article explains how to enter money that your customers owe you, or money you owe your suppliers at your FreeAgent start date.

Please note:

  • The steps below only apply if you're preparing your accounts using accruals basis accounting. If you're preparing your accounts using cash basis accounting, you wouldn't normally have opening debtor or creditor balances to enter.
     
  • To update your FreeAgent account with the information on money owed, you need to edit your opening balances. You should not create new invoices or bills for this purpose.
     
  • You should enter all the money you're owed and all the money that you owe at your FreeAgent start date (along with any other opening balances that you might need to edit) at the same time in order to bring your accounts completely up to date.

Entering money owed to you at your FreeAgent start date

Navigate to the ‘Accounting’ tab at top of the screen and select ‘Journal Entries’ from the drop-down menu.

Journal Entries option highlighted within Accounting drop-down menu

Select ‘Opening Balances’ from the drop-down menu.

‘Opening Balances’ highlighted within the ‘drop-down menu in the Journal Entries area..png

Next, select ‘Edit Opening Balances’.

‘Edit Opening Balances’ button highlighted next to ‘Import Opening Balances’ in the Journal Entries area..png

You will see the amount that you entered as your opening bank balance when you first set up your FreeAgent account, and a corresponding amount with the code ‘999 - Suspense Account’.

Edit Open Balances area showing ‘999 - Suspense Account’ as the final listing..png

To enter the details of money owed to you, delete the ‘999 - Suspense Account’ line entry by selecting the cross-shaped icon.

Red cross button highlighted next to the ‘999 - Suspense Account’ listing data..png

Then select ‘Add Another’.

‘Add Another’ button highlighted at the bottom of the Edit Opening Balances area..png

In the new field, select ‘681 - Trade Debtors’ from the ‘Code’ drop-down menu and enter some additional text to describe the entry if you wish. Enter the amount owed at your FreeAgent start date in the ‘Debit’ column.

Example text added to detail who the money is owed to for a new ‘681 - Trade Debtors’ listing for Opening Balances..png

If you are owed more than one sum of money, you can either select ‘Add Another’ and repeat the process for each amount you are owed, or calculate the total amount you are owed and input this as a single line entry.

You will notice that the ‘Difference’ figure updates automatically each time you enter a line item.

Explaining the payment of money owed to you

When your customers pay you the money they owed you at your FreeAgent start date, you should explain those payments as individual bank transactions. Use the 'Other Money In' type and the 'Receipt from Initial Debtor' category when you do this.

Entering money you owe at your FreeAgent start date

Navigate to the ‘Accounting’ tab at top of the screen and select ‘Journal Entries’ from the drop-down menu.

Journal Entries option highlighted within Accounting drop-down menu

Select 'Opening Balances' from the drop-down menu.

‘Opening Balances’ highlighted within the ‘drop-down menu in the Journal Entries area..png

The select 'Edit Opening Balances'.

‘Edit Opening Balances’ button highlighted next to ‘Import Opening Balances’ in the Journal Entries area..png

Delete the ‘999 - Suspense Account' line entry by selecting the cross-shaped icon.

Red cross button highlighted next to the ‘999 - Suspense Account’ listing data..png

Then select ‘Add Another’.

‘Add Another’ button highlighted at the bottom of the Edit Opening Balances area..png

You can either create a new line for each of the amounts you owe or enter the total amount you owe as a single line entry. Remember to use the code ‘796 - Trade Creditors’, and to enter each amount in the ‘Credit’ column.

Example text added to detail who the money is owed to for a new ‘796 - Trade Creditors’ listing for Opening Balances..png

The ‘Difference’ figure will continue to update automatically each time you enter a line item.

Explaining the payment of money that you owe

When you pay your suppliers the money you owed them at your FreeAgent start date, you should explain those payments as individual bank transactions. Use the 'Other Money Out' type and the 'Payment to Initial Creditor' category when you do this.

Entering other types of opening balances

Once you have edited your opening balances to reflect the money owed to you and the money that you owe at your FreeAgent start date, you should enter your other opening balances (if you have any). These might include accruals (credit code 660), prepayments (debit code 620) and money owed to HMRC for PAYE tax on staff wages (credit code 814).

If the debit and credit entries you've entered are equal to one another, your balance will read as ‘0’. If the two sets of figures do not balance, a suspense account (code 999) will automatically be created to reflect the difference.

Edit Open Balances area showing new ‘999 - Suspense Account’  listing accounting for the difference..png

When you've finished editing your opening balances, select ‘Save Changes’.

‘Save Changes’ button highlighted at the bottom of the Edit Opening Balances area..png

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