Privately-backed FreeAgent Central (FAC) is a new online money management and accounting tool intended for small, service businesses of 1-3 employees or sole traders in the service sector (so not retailers). The UK firm comes out of beta today and is also available from now as a planning tool in the US/globally, but without the tax functionality. The reason it’s interesting is that it’s a disruptive online application which could well develop into quite a powerful system, especially if it starts – as the firm claims – to ‘learn’ how you spend money and run your business. They have also got a long way without significant venture backing, unusual in this personal finance space.
FAC costs up to £25 per month but in theory you could buy an off the shelf accounting product for £100. Why spend three times as much? It’s built to address ‘spreadsheet hell’ and double entry book-keeping and do all the grunt work in the background while giving your professional accountant the figures needed to prepare regulatory accounts. FAC is also useful in that it uses an algorithm that is the equivalent of that used by the major banks, and of course your work is backed-up on their servers , so it’s safe if you drop your laptop, as freelancers are wont to do. Other features include auto-allocation of monies you draw between expenses, salary and company dividend.
Also, FAC says its system will tell you your tax position before your professional advisor, who might cost £65 to £90 per month. (Although my experience of freelancers is that they are realy getting into using the online tax form system in the UK. But FAC would be a nice early warning system).
All accounts start with a free 30-day trial. The UK account for the UK tax regime costs sole traders £15 per month, UK Partnerships/LLPs £20 and Ltd companies £25. Users can refer other customers and get a 10% discount. (Make ten successful referrals and you can use FreeAgent for free). The Universal Account can be used by anyone costs US $20 per month and uses all the sites features but without the tax functionality, although this is going to be rolled out soon. The current plan is to target US, Canada, South Africa, Ireland and Australia/NewZealand.
FAC uses electronic statement data to track money in and out of your business, such as QIF, OFX and some CSV formats. You can also export all of your FreeAgent data in CSV format. All information which passes between its servers and your computer is encrypted over SSL and host Rackspace is known for its tightly-controlled physical and online security. Only account owners – not FAC – can log in to their data.
Competitors in the ‘light-weight invoicing’ and small biz management arena – mainly in the US – include Freshbooks, BillMyClients and Blinksale, but FAC claims it has more features geared to smaller operations and allows freelancers to know their financial position in a more ongoing basis. Certainly the user comments I’ve read indicate some good feedback from beta testers.
What I’d like FAC to do moving forward is to do what Mint promises and start profiling me against others like me so I can learn from the crowd about how to run my business. That would be a start…