When you are trading as a Limited Company there are two types of business costs in FreeAgent:
Out of Pocket Expenses - these are business costs that you have paid for personally i.e. they have not been paid directly out of the business bank account
To enter these on FreeAgent it is a two step process.
First, the expense needs to be added by going to "My Money" , "Expenses" , "Add New Expense". You then need to select "Payment" and choose what category the expense is for e.g. Computer Software
Then when you repay yourself back expenses from the business bank account (usually you'll be repaying the total amount for several expenses) you should explain the payment on the bank as "Money Paid to User" , "Expenses"
To see your running expenses balance (what you are owed back from the business) go to "My Money" , "Expenses"
Costs the Business pays for directly
If the business pays for a business cost directly from the business bank account you simply need to explain the payment out on the bank as "Payment" then pick the category such as "Travel"
There is another way where you add "Bills" on the system and then pay the bills but we suggest not to use Bills if you are running a simple business as they can get a bit messy.
Some of the typical incomings and outgoings on a company bank account are explained as below on FreeAgent:
- Dividends: money paid to user, dividend
- Salaries: payment, net salary expense
- Receipt from a customer for an invoice: invoice receipt, then select relevant invoice
- Business cost paid directly by business bank account e.g. software: payment, computer software
- Paying corporation tax: payment, corporation tax
- Paying VAT: payment, VAT
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