Business planning in FreeAgent
This article explains how to use some of FreeAgent’s handy features to plan ahead for your business.
FreeAgent has a variety of powerful tools that you or your team can use to get to know your numbers and spot efficiency improvements in the day-to-day running of your business. Read on to find out how to understand the health of your business and project future cashflow.
Using FreeAgent reports to understand business health and plan ahead
Get a clear understanding of the financial position of your business to make informed decisions by using the accounting reports in FreeAgent. The information in your FreeAgent reports is based on the data entered into your FreeAgent account.
To access the Reports area, navigate to the ‘Accounting’ tab and select ‘Reports’ from the drop-down menu.
Select the name of a report to access it in FreeAgent.
Each report provides different data and insights into how your business is performing. We’ll go through what a select few of them can help you with:
Profit & Loss report
A profit and loss report shows your business's income from sales, bank interest, and other income such as grant income, less its expenses during a given period of time. This can be used to show the profitability of the business and signal whether your business may be in a position to invest in future growth.
Read more about the kind of business decisions it can help you make.
Balance Sheet report
A balance sheet report provides a snapshot of what your business owns and owes at a particular moment. It tells a powerful story about whether your business is healthy and stable and how resilient it might be in the face of challenges.
For example, whether you’re thinking about hiring new team members, upgrading equipment or buying more stock, your balance sheet shows whether you have enough money available to support that investment. Read more about the powerful decisions and insights your balance sheet can help you make.
Aged Debtors report
The Aged Debtors report shows you a breakdown of all the invoices that are currently outstanding grouped by customer and will include the invoice date and due date. This can help you manage your cash flow and chase payments to reduce bad debt and increase profitability.
Managing cashflow is a key part of running any business, so keeping on top of outstanding debts and ensuring cash is consistently entering the business allows you to spend more time on what you’re good at and generate more revenue for the business. Read more about why cashflow is important.
Aged Creditors report
The Aged Creditors report shows you which suppliers you owe at a particular date and how much you owe them. This can help you manage your cashflow and prioritise when to make payments to suppliers.
Paying suppliers on time builds strong relationships, leading to potential discounts and better terms, strengthening your business's financial health.
Customer Sales report
The Customer Sales report shows a breakdown of the income you've invoiced your customers.
This can help you see clearly where your business income comes from and whether it relies on a particular customer. This allows you to consider how you may look to generate additional revenue from other customers or how you can shift your focus onto your larger clients to ensure their needs are met.
It can also be used to identify trends based on when you invoice so you can plan throughout the year if you have particularly quiet periods for invoicing which means you are likely to receive less cash into the business around that time.
Spending Categories report
The Spending Categories report shows how much you are spending in each area over a given time period.
Analysing your spending patterns throughout the year can help you identify cost-saving opportunities, create more accurate budgets and reliably forecast future expenses.
Projecting your future cashflow
The Cashflow functionality in FreeAgent is designed to provide you with a visual representation of your projected cashflow over the next 90 days.
You'll find this by navigating to the ‘Banking’ tab at the top of the screen and selecting ‘Cashflow’ from the drop-down menu. You’ll see a forecasted amount for your income and outgoing transactions for the next 90 days with a resulting predicted balance in 90 days’ time.
FreeAgent calculates your cashflow and updates it automatically based on your bank balance, added invoices and bills, tax liabilities and more - so whenever you need your forecast, it’s ready and waiting.
You can model different scenarios and plan the right path for your business by adding and updating manual events in your cashflow calculation. Read more about customising the data in your Cashflow report.
FreeAgent also shares smart suggestions to help keep your cashflow healthy - like reminding you to chase an overdue invoice or pay an upcoming bill (you can conveniently do both from your Cashflow dashboard). Read more about using FreeAgent’s Cashflow functionality.
Maintaining healthy cashflow is key to keeping your business afloat and enables you to manage your outgoings, grab growth opportunities and deal with unexpected challenges. Read more about how to create a cashflow forecast and how to improve your cashflow.
If you're interested in learning more about understanding your numbers to plan ahead, watch our webinar - Chart your course: navigate your numbers for better planning.