How to Choose the Best Accounting Software
Keeping your accounts can be a tricky business. It is necessary to do so not only to comply with legal obligations but to help you manage your business. You’ll need to find the best online accounting software for your business.
Businesses keep accounts in different ways…
- Some businesses will get their accountant to do it. Our bookkeeping starts at an extra £30pcm.
- Some keep accounts manually using pen and paper and special accounts books. Why would you when there is free online accounting software?
- Some will use a computerised version of this such as Excel spreadsheets to help with all the adding up and so speed up the process. There is of course the danger of incorrect formulas in the spreadsheet and they are not specifically designed to be accounting systems. Why would you when there is free online accounting software?
- Some use the best online accounting software which is usually the most efficient method of keeping accounts if used correctly. This could also be offline, but there are many more advantages if you choose the best online accounting software.
Advantages of using the best Online Accounting Software
- Only having to enter information once, The best online accounting software does the double entry.
- Management of your debtors and creditors.
- Automatic sales invoice generation, as well as emailing, repeating, chasing and collecting.
- Provision of financial management reports of all types to help you manage the business.
- Automatic calculation and submission of VAT Returns
- Easy production of management accounts.
- Some have forecasting and budget facilities built in to help you manage.
- They can integrate with other best online accounting software add-ons such as stock control and payroll.
Disadvantages of using best online accounting Accounting Software
- The learning cost and time of using and setting up the software.
- The cost of purchase (free or low monthly), support (offline only) and maintenance (offline only) although there are several low priced packages on the market suitable for small businesses.
- Whilst a general package will work with most businesses, the package may need adapting or not be suitable to some particular types of businesses. Which is why it’s important to choose the best online accounting software for your business.
How to Choose the best online accounting Software
You need to compare the needs of your business against what the different best online accounting software packages offer.
Of course, the software must enable you to meet your legal tax and accounts obligations but it is usually your own commercial needs that help decide which is the best online accounting software package for you.
Whilst you may start out with some general needs, you need to also ensure that specific detailed needs are met. A cash business will have different needs to a non-cash one. Choosing the best online accounting software package can be a complex business and getting it wrong can cause you major headaches.
Talking to your accountant is a good place to start. It certainly helps if your accountant is familiar with the best online accounting software you could use so they can provide any help you need and they will be able to help advise on what is suitable for you. A consideration of what other support is available for the software is also a critical consideration. Sometimes it is necessary to adapt how you work to meet the software but ideally the best online accounting software already matches how you work.
You need to consider factors such as…
- Do you want real time access from your accountant or access from anywhere? If so, the best online accounting software package may be the solution.
- Do you have employees and so need a payroll package to go with the software and if so is it accredited by HMRC? The best online accounting software also has payroll.
- Do you have enough transactions to warrant using the best online accounting software? However, there is free online accounting software and it’s easy to use.
- Do you need a number of people to be able to access the software at the same time over a network? Using the best online accounting software, you can add as many users as you need.
- What is the set-up of your computer system and is the software designed to run on it? A Windows based PC will give you the most options. The best online accounting software just needs an internet browser and internet connection.
- Do you need to monitor debtors and creditors? The best online accounting software even chases debtors and collects the money for you automatically.
- Do you need it to do invoicing and tailor the appearance of the invoices and be able to print in the format you want. The best online accounting software even emails them automatically and on a repeating basis if you need it.
- Do you need it to keep track of VAT and do your VAT Returns? The best online accounting software will even submit the VAT return directly to HMRC.
- Do you need it to produce management accounts? The best online accounting software has many reports to help you run your business.
- Does your accountant also have the software to allow easy production of your end of year accounts and sharing of data? With the best online accounting software, we just need to be given user rights and we can log in online.
- Do you need stock control? The best online accounting software has this.
- Is there a particular leading software for your industry?
- Do you need it to deal with a particular type of VAT scheme such as cash accounting, the flat rate scheme or a particular retail scheme?
- Does it need to handle foreign currency – these packages tend to be more expensive. Although the free online accounting software handles foreign currency.
- Does it need to integrate with your retail point of sale if you have a shop?
- Does it integrate with making online payments?
Implementation of the Accounting Software
Implementing the accounting software requires some planning and consideration of the following…
- Training – staff will need to be trained in use of the package.
- Initial setup details – apart from your business details, year end and type of VAT scheme one of the important factors to get right from the start is your Chart of Accounts. These are the headings in your accounts and it is sensible to discuss this with your accountant. Whilst packages often come with several standard ones you may want to tailor it to your own needs. We can set this up for you.
- Historic transactions – you may need to enter the historic transactions and the current balances to get the right opening position. Often it is simpler to start the package at the beginning of an accounting year and in a quiet time for the business.
- Parallel running – this does require a lot of work but is often helpful to do so for a short time just to ensure everything is operating as you expect.
- Support – most packages can have a support agreement purchased with them and this is often a good investment, particularly for the first year of use.
How We Can Help You
We can assist you with advice on choosing the best online accounting software system for you, in helping you implement the system and training.