What do you dislike about FreeAgent?
Here is a structured explanation of the accounting and operational difficulties encountered with FreeAgent software, particularly in a multi-currency context (example: EUR / GBP).
1. Processing EUR → GBP transfers treated as sales
- In correct accounting, a transfer between two bank accounts belonging to the same entity does not constitute a commercial transaction.
- It is normally a simple internal cash movement.
- Expected accounting treatment
Example:
Transfer of 10,000 EUR to a GBP account.
Debit Credit
GBP Bank EUR Bank
Only a possible exchange rate difference is accounted for.
Problem observed, in some cases, in FreeAgent which:
- Interprets the movement as a commercial entry or exit
- May require a revenue or expense category
- May create an artificial impact on the income statement
Consequences encountered:
- Incorrect revenue
- Incorrect tax result
- Difficulty in reconciliation.
2. Revaluation of foreign currency balances
According to international accounting standards (IAS 21 or UK GAAP equivalents), the revaluation of currency accounts must be treated by:
- An exchange gain/loss account (often via a technical account or pseudo-account)
Standard accounting treatment
At closing:
Debit Credit
Exchange gain/loss account Currency bank adjustment
The key point:
- these entries should not disrupt commercial operations.
Problem observed with FreeAgent
- The entries appear directly in the bank accounts, create movements that are difficult to understand, complicate bank reconciliation, and may give the impression of real transactions.
This makes auditing more difficult, understanding accounts less transparent.
3. Questionable management of subscription payments
Regarding FreeAgent billing, it has been observed that the platform may attempt to charge multiple registered cards.
Thus, the possible problematic behavior is:
- attempt to charge each registered payment method;
- Lack of clear hierarchy of the main payment method;
- Multiplication of attempts in case of failure.
This can be perceived as an aggressive collection practice, a lack of user control over payment methods.
4. GDPR-related issues
The General Data Protection Regulation (GDPR) imposes several obligations:
- limitation of data retention;
- possibility to delete personal data;
- transparency on the use of information.
The criticisms expressed about FreeAgent notably concern:
- the difficulty in deleting certain payment methods;
- prolonged retention of financial data;
- lack of clarity on the use of data. These practices are confirmed and raise questions of GDPR compliance.
5. Why these problems arise
These difficulties often stem from the philosophy of simplified accounting software: FreeAgent is primarily designed for:
- Freelancers;
- Small businesses;
- Non-accounting users.
Consequence:
- Excessive simplification of certain mechanisms;
- Limited multi-currency management;
- Automations that can produce ambiguous entries.
6. Impact for a company
The effects can be significant:
- Risk of error in tax declarations;
- Difficulty in producing reliable accounts;
- Loss of time to correct entries.
For companies with multiple currencies, multiple bank accounts, or international operations, FreeAgent can become complex to use correctly.
✅ Conclusion
The main criticisms addressed to FreeAgent are:
- Erroneous assimilation of internal transfers to commercial operations;
- Non-transparent currency revaluations;
- Questionable management of payment methods for subscriptions;
- Questions about certain GDPR-related practices.
These elements can make understanding accounting unnecessarily complex. Review collected by and hosted on G2.com.
