When I formed my limited company in 2018, I signed up with Crunch. However, I recently switched over to FreeAgent. This post summarises the pros/cons of each.
As a general point, with FreeAgent you have a wide choice of accountants. If you don't like the service at accountancy X, you can shift over to accountancy Y and keep everything intact. By contrast, Crunch is the only company that uses their particular software. You can export all your data, but there's no automated conversion process to import it into FreeAgent. (SJD is a recent example of where this can be a problem.) In my case, I manually re-entered everything, which was a bit tedious, and it will be a bigger job the longer you've been in business. That said, you don't necessarily need to enter a complete history; you could just enter the balance from the end of your previous year. In my case, it was worth the effort to keep everything in one place.
I've had some problems with the service at Crunch, but in this post I'm focusing on the software. Some of these issues are more significant than others, but I've listed everything that I'm aware of.
Disadvantages of Crunch
Crunch only support cash accounting (not accrual accounting); FreeAgent supports both.
Paying VAT | Crunch
What is invoice accounting for VAT? - FreeAgent
Crunch don't support bank accounts in foreign currencies (only GBP). That means I can't track what I'm doing in Wise (with an account in USD).
"However, many software providers, including Crunch, do not allow bank accounts in foreign currencies because of the increased risk associated with currency fluctuations."
Getting Paid in Foreign Currencies - Is Your Bank The Best Way? (crunch.co.uk)
FreeAgent supports bank accounts in foreign currencies:
How FreeAgent handles bank transactions in foreign currencies – FreeAgent
(This was the deal-breaker for me.)
Crunch and FreeAgent can both sync to bank accounts. However, Crunch is 14 days behind whereas FreeAgent is 1 day behind.
FreeAgent handles expenses and director loans separately; Crunch merges them together.
FreeAgent distinguishes between bills and bank payments; Crunch merges them together.
Using a Director's Loan Account in Crunch | Crunch
What's the difference between an expense, a bill and a bank payment? – FreeAgent
Crunch has predefined categories, and sometimes it's tricky to shoehorn items into them. E.g. does an IT textbook count as "professional subscription" or "staff training"? FreeAgent has a longer list (including "Books and journals") and you can define your own categories.
What are the expense categories? | Crunch
How to add a new accounting category – FreeAgent
Crunch don't support 2FA. When I logged in, I had to enter certain characters from my "memorable word" (e.g. 1st, 2nd, and 5th) so that word must be stored in plaintext in their database rather than using a hash, which is vulnerable to compromise and inconvenient. FreeAgent does support 2FA via an authenticator app.
How to enable 2-Step Verification in your FreeAgent account – FreeAgent
(I haven't linked to the Crunch site, because they don't even mention the concept of 2FA.)
FreeAgent lets you change the date format, and they support ISO 8601 ("yyyy-mm-dd"). Crunch has a fixed format, either "d mmm yyyy" (beta) or "dd/mm/yyyy" (classic).
Disadvantages of FreeAgent
Crunch can submit P11D forms to HMRC, but FreeAgent can't:
How to submit a P11D Form in your Crunch account | Crunch
HMRC form P11D – FreeAgent
In FreeAgent, you can't split a bill between multiple categories. E.g. if you're sent an invoice which contains goods and shipping (with different VAT rates), you have to enter each item as a separate bill. In Crunch, you can assign each line item to a different expense category.
How to create a new bill – FreeAgent
How to add expenses | Crunch
In April 2020, someone from FreeAgent said:
"However, adding multi-category bills is on our roadmap and we plan to introduce this functionality later this year."
Bills - adding multiple categories / cost lines - FreeAgent API Discussion Forum
Unfortunately, as of April 2022, there's no sign of it yet.
On the plus side, you can pay off "multiple bills" (really the same bill) with a single payment:
How to pay off multiple bills with one payment – FreeAgent
NB The same limitation applies to expenses in FreeAgent, so I've been attaching the same invoice to multiple entries.
Cost
(All prices ex VAT.)
Crunch costs £75.50/month for "Limited Company Pro" = £906/year.
Pricing - Online Accounting from just £12.25 +VAT per month | Crunch
NB That includes the software and the accountancy service.
If you want them to do your SATR (Self-Assessment Tax Return), it will cost £90 from 1st April to 30th Nov, or £300 from 1st Dec to 1st Feb:
Self Assessment service | Crunch
Comparing like for like (i.e. not just the cost of the software), it will depend which FreeAgent accountant you go to. Taking Maslins as an example (since I switched to them), they charge £99/month (=£1,188/year), which includes the SATR for 2 directors.
So, Crunch are a bit cheaper (particularly if you do your own SATR), but there's not much in it.
As a general point, with FreeAgent you have a wide choice of accountants. If you don't like the service at accountancy X, you can shift over to accountancy Y and keep everything intact. By contrast, Crunch is the only company that uses their particular software. You can export all your data, but there's no automated conversion process to import it into FreeAgent. (SJD is a recent example of where this can be a problem.) In my case, I manually re-entered everything, which was a bit tedious, and it will be a bigger job the longer you've been in business. That said, you don't necessarily need to enter a complete history; you could just enter the balance from the end of your previous year. In my case, it was worth the effort to keep everything in one place.
I've had some problems with the service at Crunch, but in this post I'm focusing on the software. Some of these issues are more significant than others, but I've listed everything that I'm aware of.
Disadvantages of Crunch
Crunch only support cash accounting (not accrual accounting); FreeAgent supports both.
Paying VAT | Crunch
What is invoice accounting for VAT? - FreeAgent
Crunch don't support bank accounts in foreign currencies (only GBP). That means I can't track what I'm doing in Wise (with an account in USD).
"However, many software providers, including Crunch, do not allow bank accounts in foreign currencies because of the increased risk associated with currency fluctuations."
Getting Paid in Foreign Currencies - Is Your Bank The Best Way? (crunch.co.uk)
FreeAgent supports bank accounts in foreign currencies:
How FreeAgent handles bank transactions in foreign currencies – FreeAgent
(This was the deal-breaker for me.)
Crunch and FreeAgent can both sync to bank accounts. However, Crunch is 14 days behind whereas FreeAgent is 1 day behind.
FreeAgent handles expenses and director loans separately; Crunch merges them together.
FreeAgent distinguishes between bills and bank payments; Crunch merges them together.
Using a Director's Loan Account in Crunch | Crunch
What's the difference between an expense, a bill and a bank payment? – FreeAgent
Crunch has predefined categories, and sometimes it's tricky to shoehorn items into them. E.g. does an IT textbook count as "professional subscription" or "staff training"? FreeAgent has a longer list (including "Books and journals") and you can define your own categories.
What are the expense categories? | Crunch
How to add a new accounting category – FreeAgent
Crunch don't support 2FA. When I logged in, I had to enter certain characters from my "memorable word" (e.g. 1st, 2nd, and 5th) so that word must be stored in plaintext in their database rather than using a hash, which is vulnerable to compromise and inconvenient. FreeAgent does support 2FA via an authenticator app.
How to enable 2-Step Verification in your FreeAgent account – FreeAgent
(I haven't linked to the Crunch site, because they don't even mention the concept of 2FA.)
FreeAgent lets you change the date format, and they support ISO 8601 ("yyyy-mm-dd"). Crunch has a fixed format, either "d mmm yyyy" (beta) or "dd/mm/yyyy" (classic).
Disadvantages of FreeAgent
Crunch can submit P11D forms to HMRC, but FreeAgent can't:
How to submit a P11D Form in your Crunch account | Crunch
HMRC form P11D – FreeAgent
In FreeAgent, you can't split a bill between multiple categories. E.g. if you're sent an invoice which contains goods and shipping (with different VAT rates), you have to enter each item as a separate bill. In Crunch, you can assign each line item to a different expense category.
How to create a new bill – FreeAgent
How to add expenses | Crunch
In April 2020, someone from FreeAgent said:
"However, adding multi-category bills is on our roadmap and we plan to introduce this functionality later this year."
Bills - adding multiple categories / cost lines - FreeAgent API Discussion Forum
Unfortunately, as of April 2022, there's no sign of it yet.
On the plus side, you can pay off "multiple bills" (really the same bill) with a single payment:
How to pay off multiple bills with one payment – FreeAgent
NB The same limitation applies to expenses in FreeAgent, so I've been attaching the same invoice to multiple entries.
Cost
(All prices ex VAT.)
Crunch costs £75.50/month for "Limited Company Pro" = £906/year.
Pricing - Online Accounting from just £12.25 +VAT per month | Crunch
NB That includes the software and the accountancy service.
If you want them to do your SATR (Self-Assessment Tax Return), it will cost £90 from 1st April to 30th Nov, or £300 from 1st Dec to 1st Feb:
Self Assessment service | Crunch
Comparing like for like (i.e. not just the cost of the software), it will depend which FreeAgent accountant you go to. Taking Maslins as an example (since I switched to them), they charge £99/month (=£1,188/year), which includes the SATR for 2 directors.
So, Crunch are a bit cheaper (particularly if you do your own SATR), but there's not much in it.
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