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richallum started following the question "As a Ltd Co director, how should I claim for use of a home office?" in FreeAgent Central.
Ed Molyneux replied on August 29, 2008 12:53 to the question "Writing-off unbilled time?" in FreeAgent Central:
Charles,
We're certainly planning to get round to it, but it's probably a nice-to-have from an accounting point of view. Four years of accounts produced by my former accountant (who shall not be named ;0) never once included such a thing so I assume their other 8,999 clients' accounts didn't either.
BUT - we want to do better than that, and we do have the data to do it, so...
Your point about a 'don't rebill' flag on timeslips is noted and that's the way we'll probably go (plus a 'don't rebill outstanding' action).
Profit reports for jobs? Yes! But you guys will keep on suggesting things that are more important (reminders, bills, multi-currency)...
Stuart Jones replied on August 29, 2008 09:47 to the question "Partnership with employee salary" in FreeAgent Central:
Charles Verrier replied on August 29, 2008 09:25 to the question "Writing-off unbilled time?" in FreeAgent Central:
Thanks, Ed.
If you create 'unbillable' tasks - then you again run the risk of losing information entered on the timeslip if you have to change the task.
USE CASE: I do some work, intending to bill, but something transpires (dispute with the client, or something) that then means it cannot be billed. So. the timeslip would not have been marked as an unbillable task on initial creation. I'd hate to lose the task information against that timeslip, as it again impacts the record I have of the cost of the job, and makes it harder to review the job history at a later date.
My own preference would be a new property for the timeslip, rather than altering the behaviour of an exisiting property.
--
I'm not sure why writing-off one timeslip should automatically cause all subsequent timeslips to be flagged as written off.
If I was closing the job, then I would agree, but there could be any number of reasons why one part of the job could fail, while others continue to progress.
--
On a more general note - this all suggests to me that FAC doesn't have a concept of a Work In Progress Ledger. Unbilled time is outside the accounts part of the system, more or less as a set of memorandum records until they are billed. (or am I wrong?)
This also means that WIP doesn't appear on the Balance Sheet - again a deliberate decision on your part, I'm sure, but it could be argued that my accounts are skewed if WIP is not reported at year end.
By the way - I just noted that a conversation on accounting for WIP has already happened here ....
http://getsatisfaction.com/freeagentc...
Did anything happen off the back of that?
If you do start assigning a value to unbilled WIP (which is what we're all talking about), then the process of write-off is basically a process of settign that value to zero....
We could also then use this data to do things like warn when the overall job billing (Biling to date + predicted WIP bill-value + recoverable expenses) exceeds the budget figure for the job.
AND THEN...
We can start to talk about assigning a COST value to the timeslip, as well as a SALES value, and generating profit reports for jobs!
Lewis replied on August 29, 2008 08:21 to the question "Partnership with employee salary" in FreeAgent Central:
A comment on the question "Suppliers/invoices payable" in FreeAgent Central:
No it won't, but it won't reflect the correct VAT treatment either unless your cash accounting for VAT. Real Bills handling is coming soon! – Ed Molyneux, on August 29, 2008 08:03
Ed Molyneux asked a question in FreeAgent Central on August 29, 2008 08:02:
As a Ltd Co director, how should I claim for use of a home office?Previously I've been advised to add up household expenses and divide by number of rooms and proportion of time worked in the office.
Now I read that this method is only allowable for self-employed or employees, and that only 'incremental' expenses can be allowed (basically a bit of extra light and heat) even though the office is 99% used for business.
What's the real answer?
Ed Molyneux replied on August 29, 2008 07:58 to the question "Do you support multiple currencies?" in FreeAgent Central:
Jim P,
Thanks for making contact. Development for our multi-currency invoicing is well underway but we don't expect to be handling multi-currency banking for a while. It's significantly harder and we need to do some more research into the most usable way of doing it.
Sorry if that's not the answer you wanted to hear just now.
Ed Molyneux replied on August 29, 2008 07:53 to the question "Partnership with employee salary" in FreeAgent Central:
Stuart,
Caution: Accounting Jargon:
------
Those journal entries are exactly what are automated by our payslips (and we have salary accounts for each user which should be used instead of Trade Creditors, so that when payments are made they correctly reflect the amounts owed). And yes, our payslips are dealt with in the more accurate way as far as the P&L is concerned - the entries are posted on the payslip date not when the salary/PAYE leaves the bank account.
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Accounting Jargon Ends
It's much easier to create 12 payslips than make 48 journal entries for the year, even in the event that our simple payroll calculator does not cover their situation.
Lewis feel free to drop me an email (ed at freeagentcentral dot com) if you a hand setting this up...
Stuart Jones replied on August 29, 2008 07:48 to the question "Partnership with employee salary" in FreeAgent Central:
I would do it by journal entry:
Debit Salaries with Gross pay
Debit Employer NICs with Employer NIC
Credit Trade Creditors with Net pay
Credit PAYE/NI with PAYE & NIC owing to HMRC
The wages cheque should be analysed as Trade Creditors and the HMRC cheque as PAYE/NI.
The advantage of doing it this way is the expense is shown when it arises rather than when it is paid so the P&L account is more accurate especially if you pay your PAYE quarterly.
Jim P replied on August 29, 2008 07:23 to the question "Do you support multiple currencies?" in FreeAgent Central:
I also need the ability to have a bank account that's in a different currency from my 'base' currency. For example, I have a UK bank account for my UK clients and a Danish bank account for my clients here in Denmark. I'm currently having to ignore the references to 'kr' (kroner) in my UK account in FreeAgent and pretend they're UK pounds. However, that messes up the profit and loss and other general accounting functions...
Ed Molyneux replied on August 28, 2008 21:40 to the question "Writing-off unbilled time?" in FreeAgent Central:
Charles,
We've spent some time here at FreeAgent Towers discussing this today. Thanks loads for your detailed feedback.
What we'll plan to do, probably, is introduce a way of marking recorded time as unbillable - either by allowing you to create tasks which are unbillable or by having a permanent 'unbillable' task for each project.
The write-off function is another option - any timeslip might be flagged as unbillable whatever the task, and this single action would flag all remaining unbilled timeslips as such.
For the above, we'll need to consider which solution will be easiest to use for most people.
We'll certainly allow you to navigate directly to the expense from the project page, or at least be able to click something to 'not rebill on this project'.
On the expenses page we do show (in the small print) which items are rebillable and which are rebilled, thus
GNER KX-MK Travel -> Client A: Project A
GNER KX-MK Travel -> Client A: Project A on CA0023
..but it's not as clear as it could be, I agree. Traffic lights may well be the answer.
richallum marked one of Ed Molyneux's replies in FreeAgent Central as useful. Ed Molyneux replied to the question "Does free version of ltd co not allow you to create users?".
Ed Molyneux replied on August 28, 2008 21:31 to the question "Does free version of ltd co not allow you to create users?" in FreeAgent Central:
Rich,
As we've discussed on email now, we've tweaked FreeAgent to not require the whole account is setup (bank accounts and all) but only that the company details and accounting dates are in.
In truth, we can probably relax this requirement too if we're more careful about how we collect user details, and we'll aim to tidy this up soon.
Thanks for bearing with us...
Ed Molyneux replied on August 28, 2008 21:08 to the question "Does free version of ltd co not allow you to create users?" in FreeAgent Central:
richallum replied on August 28, 2008 20:59 to the question "Does free version of ltd co not allow you to create users?" in FreeAgent Central:
Ed Molyneux replied on August 28, 2008 20:55 to the question "Does free version of ltd co not allow you to create users?" in FreeAgent Central:
richallum replied on August 28, 2008 10:31 to the question "Suppliers/invoices payable" in FreeAgent Central:
Lewis replied on August 28, 2008 10:30 to the question "Suppliers/invoices payable" in FreeAgent Central:
Stuart Jones replied on August 28, 2008 10:21 to the question "Suppliers/invoices payable" in FreeAgent Central:
You could use a journal entry. Date it on the last day of your year and only enter the net of VAT amount (it's simpler & will avoid problems with your VAT returns)
Debit Expense account
Credit Trade creditors
Don't forget to reverse the entry on the first day of your new year, ie
Debit Trade creditors
Credit Expense account
PS Would someone at FAC confirm using Trade Creditors won't throw anything else out of balance please?
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