How to handle supplier bills, credits, VAT and statements in FreeAgent, and the accounting concepts behind each task.
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Go to Bills, select Add new bill, choose the supplier contact, enter the reference, dates, VAT option, category and total, attach the invoice and save. To mark it paid, open the bank account, select the payment and explain it with the type Bill Payment.
Read articleDownload a statement from your online banking as OFX, QIF or CSV, open the bank account in FreeAgent and choose Upload Statement. If your bank only offers CSV, format it as three columns first: date, amount and description.
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A credit note is a document a supplier sends to reduce the amount you owe them, or to confirm they owe you money back. It refers to an earlier invoice and is issued for returned goods, overcharges, price corrections or cancelled orders.
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A purchase ledger is the record of what your business owes each supplier for goods and services bought on credit. It holds one account per supplier, and the balances across all of those accounts add up to your accounts payable figure.
Read articleA CIS invoice is a normal subcontractor invoice that separates labour from materials, so the contractor can work out the deduction from the labour alone. If the job is within the VAT domestic reverse charge, it must also say so and must not add VAT to the amount payable.
Read articleCompare the supplier's statement with your purchase ledger balance for that supplier, then explain every difference. Tick each line on both sides, list what does not match, correct your own records and query the supplier about the rest.
Read articleA nominal code is the number of one account in your general ledger, such as sales, rent or printing. Your full list of them is the chart of accounts, and every line on a supplier bill is coded to one.
Read articleA reverse charge invoice shows no VAT charged by the supplier, because you, the UK buyer, account for the VAT on your own VAT return instead. You record it by using a reverse charge tax rate or code, so the software adds the VAT to box 1 and reclaims it in box 4.
Read articleAn invoice and a bill are the same document. The seller calls it an invoice because they issue it to get paid, and the buyer calls it a bill because they receive it and have to pay it.
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