Tag Archives: freelancer

Xero Online Accounting Software Review

Xero Accounting Software LogoXero (www.xero.com) is online accounting software for small businesses and, according to the product website, is the World’s easiest accounting software. The software lets you see your cashflow in real time, lets you automatically import bank transactions, create and send invoices, and use a large selection of add-ons.

 

Features

Dashboard
Xero’s dashboard gives you an at-a-glance overview of your bank balances, bills, invoices, and expense claims, enabling you to see the big picture of your business at any time. Interactive graphs show revenue coming into your business and money going out, and a ‘watch list’ lets you keep an eye on specific accounts.

Mobile – Xero Touch
Xero Touch enables you to use the Xero accounting software from any mobile device. You can keep track of bank transactions, check bank balances, create invoices, enter expenses, and communicate with your accountant,

Inventory Items
If you have services and products that you buy or sell on a regular basis, you can set these up as inventory items. You can then use these items in repeating invoices or bills by referencing the associated inventory code. You can either add inventory items individually, or you can import a batch of items from a .csv file.

Purchase Orders
Purchase orders enable you to keep track of purchases you make from your suppliers. This lets both you and your supplier know what has been ordered, its cost, when it should be delivered, and the delivery address.

Expense Claims
Xero can easily handle expense claims when you have used your own money to buy items for your business. You simply enter the details of the expense and then scan or take of a photo of the receipt and add it to the expense record.

Free Online Support
Free, around the clock, online support is available from experts in the Xero product.

Multi-Currency Financial Accounting
Xero provides real-time conversions with exchange rates for over 160 currencies. You can also add foreign currency bank accounts and create foreign currency invoices. The software keeps track of foreign currency gains and losses to enable you to have an accurate picture of your company’s finances.

Payroll
With Xero, you can easily enter a pay run, make bulk payments and email or print payslips for your employees. Detailed reports give you an overview of all your salary expenses. You can combine the pay run functionality with the HMRC’s RTI compliance tools to create a fully-compliant solution for up to 9 employees. With online payroll you are always using the latest tax tables.

Supporting Files
To compliment Xero as being a cloud accounting solution, you are able to store supporting files in the cloud as well, rather than needing to keep them on your computer’s hard drive. This enables you to keep source documents right next to the financial data, making it easier for you and your accountant to keep track of the numbers.

Financial Reporting
Xero has an extensive selection of financial reports, ranging from a simple profit and loss report to advanced management reporting. All reports can be exported in as PDF, Microsoft Excel or Goggle Docs. Xero’s reporting functionality is very good, giving it an edge over its competitors.

Bill Payment
Managing bills helps you to keep on top of cashflow and ensure that your suppliers are paid on time. From the Purchase area of the software, you have a complete overview of your bills and purchase orders.

Fixed Asset Depreciation
The software also lets you keep track of fixed asset depreciation.

Pricing

Xero offers three pricing models:

  • Starter – £9+VAT per month
  • Standard – £20+VAT per month
  • Premium – £25+VAT per month

According to the Xero website, the Standard accounting package is the most popular. Due to the limitations in the number of bank transactions that can be reconciled (20), and the number of invoices and bills that can be generated (5 each), I would imagine that the Starter package is only suitable for micro businesses that only have one or two clients, for example, IT contractors.

For companies that carry out international trade where multi-currency capability is necessary, the Premium package will be necessary, but for most small businesses, the Standard package will be sufficient.

Free Trial

As with most online accounting software solutions, Xero offers a free trial of its software. Registration takes a few seconds and, once you’ve responded to the activation email sent to you, you can begin using the application.

 

Initially, you are prompted to set up your business, but there is a help video and links to assist you with this task. This can be quite a time-consuming exercise if you want to set everything up properly, but you can skip through the screens if you want to, and also save and quit at any time. You may also require the assistance of your accountant in order to complete some of the screens.

Once you’ve gone through the setup process, you can start to use the software properly, and create invoices, run reports, and so on.

Conclusion

Xero is a powerful accounting solution with great reporting functionality, and will be a good choice for many small businesses. As is often the case through, it’ll be down to personal preference as to whether Xero is the right choice for you.

Other Accounting Software Reviews

You might also be interested in reading the following review(s):

Clear Books

KashFlow

FreeAgent

All Accounting / Bookkeeping Software Reviews

Freelancers – why your flexibility should stop at your finances

It is certainly true that freelancing offers a degree of flexibility when it comes to working hours. Instead of resisting the temptation to snooze the alarm clock at 7am every day in order to beat the morning rush, many freelancers will often start their day at a time that suits them and more importantly, from a location that suits them.

This often makes things such as running the family home, doing the school run, commuting, and taking time off for holidays a lot simpler than when you are an employee of someone else’s company. At the end of the day, the freelancer can often take his or her work with them wherever they decide to go. A flexible work-life balance is one of the major advantages when working for yourself as a self-employed freelancer.

Setting up a freelance business

While this flexibility is a godsend to many, it should by no means spill over into your finances. It is of the utmost importance to get your accounts in order prior to setting up a business, and to keep on top of them during the day-to-day running of your business. To do this, you must begin by creating a business name and setting up a business bank account. You must then inform the Inland Revenue (HMRC) that you’re a sole trader.

Managing your taxes

Unlike full-time employment, when working on a freelance basis you will have to manage your own accounts. This often means that you have to sort out for yourself how much tax and national insurance you owe, and when they need to be paid. This can be time consuming and you must ensure you have the necessary funds in place when it comes to the end of the tax year so that you can meet your financial obligations.

Managing unforeseen costs

Quite possibly the biggest problem with freelance work is that one week the money might be rolling in and the next week work it may have completely dried up. This can make organising your monthly finances somewhat difficult, especially if you have an unexpectedly high bill to pay, unforeseen house repairs to cover or a daughter’s wedding to contribute towards.

Getting your processes right

Being efficient is often the key to running a profitable business. This means ensuring that your time is well spent. It’s wise to begin by putting your processes in order, which often entails sorting out your accounts, your invoices and your bills. Using bookkeeping software will help you to do this, or you can hire the services of an accountant.

Be ruthless

In order to make money you must be ruthless, especially when working on a freelance basis. This often involves chasing up invoices on the day they are due, being disciplined with yourself and ensuring you claim for the likes of travel, software and business costs – either through tax deductions or from clients.

FreeAgent Online Accounting Software Review

FreeAgent LogoFreeAgent (www.freeagent.com) is an online accounting solution for limited companies, partnerships, or sole traders, which is used by over 35,000 freelancers and small businesses. The software lets you keep on top of expenses, payroll, time tracking, estimates and invoices. You can also keep track of your businesses cashflow and project profitability, and check to see who owes you money. You can also see what your current tax situation is, and file VAT, RTI (Real Time Information) and Self Assessment returns directly to HMRC.

 

Features

Estimates (Quotes, Proposals)
The software lets you create estimates for potential work. The estimates can be combined to form a single invoice if necessary, they can be printed or emailed directly to clients. Multiple currencies and languages are supported.

Time Tracking
FreeAgent enables you to log timeslips for work done on active projects, and to switch between weeks and months so that you can see where your time is going. On project completion, you can generate an invoice for unbilled time and send this to the client. The software also lets you generate timesheets that can be printed or emailed to clients.

Invoices
Create professional invoices and emailed them to clients. You can also create recurring invoices. The software enables you to keep track of outstanding invoices and to send late payment reminders where necessary.

Part of the FreeAgent Add New Invoice page

Part of the FreeAgent Add New Invoice page

Expenses
The overview screen lets you view a list of your recent expenses, and to add a new one instantly. Where you have expenses that are repeated on a monthly basis, for example, you can set these up to automatically recur.

Banking
You can automatically import bank transactions or complete bank statements into the software, and reconcile invoices and bills with transactions made in FreeAgent. You can even import transaction data from PayPal.

Accounting
FreeAgent gives you access to monthly and quarterly accounting reports, providing you with a clear picture of your profit and loss at any time and helping you to track revenue and spending. To help you work more effectively with your accountant, you can give them access to your FreeAgent account. This will allow your accountant to provide you with advice throughout the financial year and not just at year end when they are producing your company accounts. The software is also able to produce a complete balance sheet for your business. For limited companies, FreeAgent keeps track of company profit from both the current year and previous years, ensuring that any dividends you take are legal.

Taxes
FreeAgent can work out your tax situation from both a personal and business perspective. The tax timeline tells you how much tax you have to pay and when you have to pay it. You can export the dates from the timeline to calendar software such as Google Calendar. The software can also work out all the figures for your quarterly VAT Returns, and is able to handle both invoice accounting and cash accounting, as well as the VAT Flat Rate Scheme. If you are a limited company, FreeAgent can also calculate how much corporation tax your business owes.

Secure, Web-Based Accounting
FreeAgent is a cloud (web-based) accounting solution that uses secure 256-bit SSL technology to encrypt all transactions between you and the FreeAgent servers. You can access your account from any web-enabled device that supports a web browser, for example, a PC, laptop, tablet, or mobile phone.

 

Free Trial

A 30 day free trial of the software is available. Although the initial setup is straightforward (I selected the limited company option), it does prompt you to enter a lot of details that you probably don’t want to at this early stage (bank account details, VAT registration number, etc). After all, you’re just trying out the software. Of course, you can just enter dummy data to get yourself up and running – which is what I did. You can update these settings later if you want to using the Settings menu bar option.

As with all software applications, it takes a bit of time to find your way around the software, but I have to say that the navigation in FreeAgent is easy to follow. It also has a Quick Links drop down list at the right of the screen that contains the most common tasks, such as, creating an invoice and adding a new expense.

Pricing

Three pricing models are available:

  • Sole Trader (£15+VAT per month)
  • Partnerships/LLP (£20+VAT per month)
  • Limited Company (£25+VAT per month)

If you pay for 12 months up front though, you can get two months for free, meaning that for the limited company option the price would work out at just under £21+VAT per month. Although slightly more expensive, this is similar to KashFlow and Clear Books.

Conclusion

I particularly like the fact that you can choose the accounting software that suits your particular company structure, for example, if you’re an IT contractor working through your own limited company, you choose the limited company solution, whereas if you’re a sole trader, you choose the sole trader solution. This makes everything tidier, when it comes to the functionality that is provided. You can also choose an account based on US company structures … nice!

FreeAgent is aimed at very small businesses that have just a few people. It offers plenty of functionality – probably as much as most one- or two-person enterprises would require. It doesn’t seem to handle stock control though, so it assumes that your business is a service-based one.

Other Accounting Software Reviews

You might also be interested in reading the following review(s):

Clear Books

KashFlow

Xero

All Accounting / Bookkeeping Software Reviews

More Women Becoming Sole Traders

It appears that more and more women in the UK are setting themselves up as sole traders rather than following a more traditional approach of a permanent job in a company.

Being a sole trader or freelancer does, in many cases, offer a certain amount of flexibility in work patterns, which is often useful for women as they are predominantly responsible for child care. Being the person who, in general, has to drop off and pick up the kids from school often means that women are forced to take low paid part-time jobs. Going it alone also provides an alternative against banging your head against the corporate glass ceiling that prevents many women from achieving their true potential.

Since 2008, the number of female sole traders has grown by 21% nationally, with the figures for London and Middlesex being 22% and 23% respectively. East Lothian in Scotland has also recorded an impressive 21% increase. Some figures are, however, not quite so good, with Gwynedd having a 10% increase.

This information comes following a Freedom of Information request from Crunch Accounting. The HMRC data includes information on 3,517,580 UK businesses.

Laura Hughes, Crunch’s Accountancy Training Manager, said: “It’s great to see more women setting up on their own in business. So many of our clients choose the freelancing lifestyle for its flexibility and for working mothers, a sense of control and autonomy is key. Thanks to technology this working lifestyle is now becoming more accessible to more people.”