FreeAgent for startups: bookkeeping that becomes a founder's dashboard

By Buzz Accounting · 5 August 2026

FreeAgent can show a founder the four or five numbers that decide whether the company can keep going over the next two quarters. That depends on how it is set up and on a twenty-minute check each week.

This post covers the setup, the numbers to read each week and the arithmetic behind them.

Setting up the bank feed and rules

Three things need to be in place first.

The company has its own bank account. A limited company is a separate legal person and its money belongs to the company. A separate account also keeps personal spending out of the bank feed. Our page on business banking for startups covers the options.
The bank feed is connected. An open banking feed brings transactions in automatically. Uploading statement files by hand leads to gaps and duplicates.
Recurring transactions have rules. Your cloud hosting, software subscriptions and rent are the same every month. Set the explanation once and they are categorised automatically from then on, which keeps the weekly check to about twenty minutes.

Photograph receipts in the mobile app when you spend, so each one is attached to its transaction.

Five numbers to read every week

For an early-stage company, these five numbers tell you more each week than the profit and loss account:

Cash in the bank — what the company holds today.
Money owed to you — invoices raised and unpaid, and how old they are.
Money you owe — bills entered but not yet paid.
Tax accrued but not yet due — corporation tax, VAT and PAYE building up in the background.
Net monthly burn — money out minus money in each month, which together with cash in the bank gives your runway.

Watch the last two closely. A bank balance can look healthy until a VAT payment, a payroll run and a corporation tax bill fall due within the same six weeks.

Worked example: working out the zero-cash date

Illustrative figures. A seed-stage company on 1 September 2026.

Cash in the bank: £180,000
Monthly costs (salaries, employer National Insurance, hosting, rent, software): £42,000
Monthly receipts from customers: £16,000
Net burn: £42,000 − £16,000 = £26,000 a month
Runway: £180,000 ÷ £26,000 = 6.9 months, so cash runs out around the end of March 2027

The bank balance includes £14,000 of VAT owed to HMRC at the end of the quarter. Without it, runway is £166,000 ÷ £26,000 = 6.4 months, so cash runs out around mid-March 2027, about two and a half weeks earlier.

Raising money often takes three to six months. A founder who finds out in February that the money runs out in March has no time left to raise. Checking the zero-cash date every week shows the problem months earlier, in time to start raising in the autumn. Our guide to runway and forecasting takes that further, including how to model the hire you are considering before you make it.

Tracking the corporation tax bill

FreeAgent keeps a running corporation tax estimate through the year and shows upcoming deadlines on its tax timeline, so you can see the first bill building up and set cash aside for it.

The rate a company pays can fall between the two main rates. Corporation tax is 19% on profits up to £50,000 and 25% on profits over £250,000, with marginal relief between. Marginal relief is calculated as 3/200 of the difference between the £250,000 upper limit and your profits.

Worked example — illustrative. A company with taxable profits of £60,000 and no associated companies.

Tax at the main rate: £60,000 × 25% = £15,000
Marginal relief: (£250,000 − £60,000) × 3/200 = £2,850
Corporation tax due: £15,000 − £2,850 = £12,150
Effective rate: 20.25%

Both thresholds are reduced for accounting periods shorter than 12 months and shared between associated companies. A founder who controls two companies can therefore pay more tax on the same total profit than a founder with one.

For a company of this size, corporation tax is due nine months and one day after the end of the accounting period, and the CT600 return twelve months after it, so the tax is paid three months before the return is due. Setting cash aside each month against the running estimate means the money is there when the payment falls due. Our guide to corporation tax for startups goes through the reliefs that reduce the bill.

Invoicing and payment reminders

FreeAgent will send automatic payment reminders on a schedule you set, add card and open banking payment links so customers can pay quickly, and show an aged debtor list of who owes what and for how long.

Automatic reminders mean invoices are chased on time without anyone having to remember. For example, set a reminder seven days before the due date, on the due date, and seven, fourteen and thirty days after it. You then only need to contact the customers who still have not paid.

VAT and payroll

You must register for VAT once taxable turnover exceeds £90,000 in any rolling 12-month period. That means any twelve consecutive months, whatever your financial year. You have 30 days from the end of the month in which you went over to register. Up-to-date books let you see the rolling total before you reach the threshold.

Once you are registered, FreeAgent prepares VAT returns and files them to HMRC under Making Tax Digital. It also runs payroll and sends HMRC the payroll report due each payday, which you need from your first hire.

The numbers investors ask for

When you raise, even a small angel round, investors want up-to-date accounts and figures for burn, revenue and runway that they can check. A company with up-to-date books can produce these quickly. A company without them has to rebuild months of records from bank statements while it is trying to raise. The same figures go into the monthly investor update that keeps investors informed between conversations.

Your twenty-minute weekly routine

Explain the week's bank transactions. With rules in place, most will already be explained.
Photograph any receipts still in your wallet and clear them.
Read the aged debtor list and chase anything past 30 days.
Write down cash, net burn and your zero-cash date, and keep the list so you can see the trend.
Once a month, move the accrued corporation tax and VAT into a separate savings account so the balance you see is money you can spend.

What FreeAgent costs

FreeAgent's limited company plan lists at £33 a month or £330 a year excluding VAT, with an introductory 50% discount for the first six months or first year. It is free for as long as you hold a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account. We include FreeAgent in our fee for simpler companies, and our FreeAgent page explains how we use it.

We review the bookkeeping, estimate the tax ahead of each deadline and file the returns. Get started.

Common questions

Is FreeAgent free with a business bank account?

FreeAgent is free for as long as you hold a NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account. Otherwise the limited company plan lists at £33 a month or £330 a year excluding VAT, with a 50% introductory discount for the first six months or first year. We also include FreeAgent in our fee for simpler companies.

Can FreeAgent handle my startup corporation tax?

It keeps a running corporation tax estimate through the year and flags upcoming deadlines on its tax timeline, so you can see the bill building up before the year end. Preparing the statutory accounts and the CT600, claiming reliefs and checking the treatment of anything unusual is work for an accountant, and we do that alongside the software. Corporation tax is payable nine months and one day after your accounting period ends, which is three months before the return is due.

How often should a founder look at the numbers?

Weekly, for about twenty minutes, once the setup work is done. Look at cash, money owed to you, money you owe, tax building up and net monthly burn. The profit and loss account changes little from week to week. Keep a running list of your zero-cash date and watch which way it moves. Raising money often takes three to six months, so a founder who discovers in February that cash runs out in March has no time to raise. A founder who has tracked the date since the autumn can start raising much earlier.

Does FreeAgent file VAT returns under Making Tax Digital?

Yes. Once you are VAT registered, FreeAgent prepares your VAT returns from the bookkeeping and files them directly to HMRC under Making Tax Digital, with the digital records that regime requires kept as a by-product of normal use. You are responsible for watching the registration threshold. You must register once taxable turnover passes £90,000 in any rolling twelve-month period, meaning any twelve consecutive months whatever your financial year, and you then have 30 days from the end of the month in which you went over. Up-to-date books let you see that rolling total as it builds.

Is FreeAgent enough on its own, without an accountant?

It keeps clean records and shows your position. It will not tell you that you have missed an R&D claim notification deadline, that a payment to a founder is being treated the wrong way, or that an associated company has halved your marginal relief thresholds. FreeAgent records transactions and shows the numbers. An accountant decides how things are treated, claims reliefs and prepares the statutory filings.