How to Create and Send Invoices in FreeAgent – and Mark Them as Paid

1. Create an invoice

1. 1
   Go to Work > Invoicing and click Add new invoice.
2. 2
   Choose your customer from the contact list. If they're new, create the contact first — check the name, email address and billing address are right, because these appear on the invoice.
3. 3
   Set the invoice date. This is normally the date you supplied the work or goods.
4. 4
   Set the payment terms (for example 14 or 30 days). FreeAgent works out the due date for you.
5. 5
   Check the invoice number. FreeAgent numbers invoices in sequence automatically — leave it as it is unless you have a good reason to change it.
6. 6
   Add your line items: a clear description, quantity and price for each item or service.
7. 7
   Choose the correct VAT treatment for each line. Only charge VAT if your business is VAT registered and the sale is taxable. If you're not sure which rate applies, ask us before you send it.
8. 8
   Make sure your bank details are shown on the invoice so your customer knows where to pay.
9. 9
   Save the invoice and check the preview before moving on.

2. Send the invoice by email

There are two ways to email an invoice from FreeAgent:

1. 1
   If you selected automatic emailing when creating the invoice, click Send Now.
2. 2
   Otherwise, open the invoice from Work > Invoicing, then choose Actions > Send by email.
3. 3
   Select the recipient. Check it's the right person — often your customer's accounts team.
4. 4
   Proofread the email and the attached invoice: customer name, amounts, VAT, due date and bank details.
5. 5
   Click send. The invoice status changes to sent.

3. Mark it as paid using your bank feed

The best way to mark an invoice as paid is to match it to the money received in your bank. That keeps your bank balance and your invoices in agreement.

1. 1
   Go to Banking > Bank Accounts and open the account the money was paid into.
2. 2
   Find the money received from your customer and open it.
3. 3
   Set the Type to Invoice Receipt.
4. 4
   In the Invoice dropdown, choose the exact invoice being paid. Check the invoice number and amount — don't just pick the first one listed.
5. 5
   Click Explain transaction.
6. 6
   Check the invoice status. It shows as paid if the full amount was received, or part-paid if only some of it was.

Worked example: a £120 invoice

Part payments and common problems

No bank feed? The manual option

Only use this if the account has no bank feed and you don't upload statements — for example, a cash payment.

1. 1
   Go to Banking > Bank Accounts and open the right account.
2. 2
   Choose More > Add transaction.
3. 3
   Enter the date and amount received, set the Type to Invoice Receipt and pick the invoice.
4. 4
   Save, then check the invoice status.

FAQs