Accounting essentials in FreeAgent for accountants

This article explains how to manage your client’s accounting categories and make journal adjustments. It also explains how to manage account locks in your client’s account and how FreeAgent handles the year end process for your clients.

How to manage your client’s accounting categories

If you require nominal codes that aren’t included in FreeAgent’s standard chart of accounts, you can add new accounting categories to your client’s account.

You might find the following articles useful for managing accounting categories in your client’s account:

• How to view or edit an accounting category
• How to delete an accounting category
• How the director’s loan account works in FreeAgent
• How to view the tax reporting type of an accounting category
• Tax and accounting effects of accounting categories for sole traders, partnerships and LLPs
• Tax and accounting effects of accounting categories for limited companies

How to create journal entries

If you need to make adjustments in your client’s accounts, you can create journal entries as long as there are no account locks in place. You can also create recurring journal entries that are automatically created at a set interval.

You might find the following articles useful for making adjustments using journal entries in your client’s account:

• How to record prepayments
• How to record accruals
• How to accrue or defer income
• How to edit or delete journal entries
• How to copy or reverse journal entries
• How to edit or delete recurring journals
• How to record payroll by creating journal entries
• How to adjust boxes 1 and 4 of your VAT return
• How to adjust your Corporation Tax liability figures

How to add or remove an account lock in your client’s account

Your client’s accounts will be locked automatically by FreeAgent as a result of certain events such as the filing of a Self Assessment tax return if they’re a sole trader, or approving and signing their end of year accounts if they’re a limited company director.

You can also add an account lock manually to prevent your client from editing any of the data that makes up their accounts, up to a particular date.

If you need to, you can then remove a lock on your client’s accounts.

How FreeAgent handles the year end process

At the end of an accounting year, your client’s profit and loss accounts are ‘cleared down’ to retained profits (code 968 in FreeAgent) so you and your client can measure profit and loss for the following year. FreeAgent clears the accounts down automatically for your client.

You might find the following articles useful for explaining the steps that FreeAgent takes for the year end process for each UK account type:

• How FreeAgent handles the year end for a sole trader
• How FreeAgent handles the year end for a limited company
• How FreeAgent handles the year end for a partnership or LLP
• How FreeAgent handles the year end for a landlord

Changing your clients' accounting year-end dates

You can change your clients' first accounting year-end date, or subsequent year-end dates, as long as there are no account locks in place or changes of accounting period.

Find out how to change your clients’ accounting year-end dates in FreeAgent.

Using Find and Fix to make corrections in bulk

You can use Find and Fix to make the corrections in bulk to bank transaction explanations, bill line items and out-of-pocket expenses in a client’s account.

With Find and Fix you can make bulk changes to the accounting category (nominal code), VAT rate and description of the selected items.