Accounting software is a huge help to small business owners. Anyone who has had to grapple with spreadsheets, reams of paper and receipts will tell you keeping track of your accounts can be difficult.
But accounting software has taken away a lot of the pain when it comes to keeping your books and records.
As a result, it makes running your business easy, and because it is accessed by your accountant, it reduces the time they need to spend on your accounts. Also, the ability to scan your receipts from your phone means much of the software also takes away a lot of hassle.
There are many types of accounting software available and they can all help improve your efficiency, some more than others! So why should you choose to switch to accounting software?
Accounting software improves efficiency
To operate your business efficiently, you will have already introduced technology to your office. If you owned a typewriter, it is now consigned to history! So, why are you still using spreadsheets for your accounts?
Accounting software allows you to complete bookkeeping tasks so much more easily. It also computes totals and automatically adds VAT or discounts, if programmed, reducing your workload.
It also keeps all your information in one place so that you won’t need to plough through paperwork or sort out spreadsheets!
Depending on the accounting software you choose, the programme can add totals, compile statements (such as management accounts) and generate invoices.
As a result, you reduce the amount of time as there’s no need to duplicate information. There is also less chance of error, which means you have a clearer understanding of your business.
Accounting software simplifies tax
Losing receipts from the disorganised collection in your shopping bag is one of the easiest things to do. But it can make life very difficult for you if you cannot trace payments that have been made.
As a result, you may end up with miscalculated tax payments because you are disorganised. Misrepresented information on your tax return can land you with a penalty, which no-one wants to happen.
As well as paying too little, not keeping a track of your records could end up with you paying more. Accountants will diligently check your books but if there are gaps they may have to er on the side of caution, which means you pay more tax.
Accounting software – with its smartphone apps – helps you keep your business transactions organised. Your accountant will then be able to access your books more easily and will spend less time on sorting out your returns.
A running history of your business
It’s surprising how many business owners have no real idea of their numbers. If you’ve seen Dragon’s Den, it’s often the area that those pitching ideas fall down on.
Having a clear view of the current situation within your business helps you plan more easily.
We have helped many clients across Newcastle and the North East plan better because it’s easy to get an overview of their company. An accountant or business coach will struggle to help you reach your goals if you have no firm foundation to build upon.
Accounting software will clearly demonstrate how your business has performed in the past and whether the goals you set are achievable.
As a result, you can use projections to create a business budget and make better business and buying decisions.
Why you should use Xero
We know that there are a host of accounting software packages available. Some free versions are fine for new businesses that have few records. But once you start to build your business, those versions often don’t have the benefits of paid-for versions.
Be aware that some of the programmes offer far more than is necessary for small businesses. Many suit large limited or PLC companies better and have prices to match!
At Concept Accountancy, we have started to recommend Xero. Among the benefits it offers are:
- Live view of your bank balance including cash in and out and most recent transactions.
- It processes invoices electronically by emailing them straight to your customers.
- Receipts can be scanned with a smartphone or tablet. The app has an additional cost but is worth paying.
- Produces real-time reports. You can generate cash flow statements, profit and loss accounts or file VAT returns.
- Unlimited users can work on the account, which helps financial directors and accounts teams.
- It connects to PayPal, GoCardless and Stripe to receive payments electronically.
If you are in business and still using old methods for your accounts and want an honest review of our thoughts on Xero, contact us today.