Choosing an accounting software doesn’t have to be complicated. Here are three questions to focus on when selecting one for your business:
- How much are you willing to pay?
- Why do you need accounting software?
- Which features does your business require in an accounting software program?
1. How much will the software cost?
The most popular packages are:
- Best all round– Quickbooks online: prices start from £10.50/ month, iOS and Android compatible and there is both phone & chat support
- Best for Mac users– Xero: prices start from £10/ month, iOS and Android compatible and there is both 24/7 phone, email & chat support
- Micro businesses– Zoho: prices from £6/ month
- Free– Wave Accounting: no mobile app and phone & chat support at extra cost
How much are you willing to pay? Accounting software products vary in cost, depending on the features you choose. Most providers also use subscription models for different types of packages, and most offer free trials for 14/ 30 days.
Paid packages range anywhere from less than £6 per month to roughly £35 per month. Features that add to costs include expense tracking, sales tracking, recurring invoices, automatic overdue billing, team functionalities, payroll services, advanced reporting capabilities and company branding.
2. Why do you need accounting software?
To find the best accounting software for your business, the first step is to figure out the primary reasons why you need one in the first place. For some businesses, using spreadsheets, or even handwritten ledgers, will do. For most, however, the ease and efficiency of accounting software make it the better choice. It is also worth keeping in mind the Making Tax Digital legislation coming into effect from April 2018 so paper record keeping will no longer be appropriate for HMRC.
Here are some factors to consider:
- You’re just starting out. Using accounting software right from the start sets your business up for success down the line. It’s far more beneficial to begin using accounting software from the first day than to implement one after months, or even years, of using spreadsheets or handwritten ledgers.
- Your business is growing. If you plan to expand your business, or if your business is quickly growing, a manual accounting system becomes inefficient and complicated. If you use accounting software, it can save your growing business tons of time and money by automating processes and being highly scalable to your business’ size.
- You want access on-the-go. Many packages provide mobile apps which allows you to record your finances out and about such as taking photos of your receipts as they are incurred thus saving time and effort.
- Your current system is too complicated. Not all accounting systems are made the same. For small businesses, some of the mainstream accounting systems are too complex and packed with unnecessary features. If the software you currently have is too complex, a solution made specifically for small businesses is a much better option.
- You want to make sure you comply with all laws and regulations. Making Tax Digital legislation means your books need to be in a format that is compliant with making the quarterly submissions to HMRC
3. Which features does your small business need in an accounting software?
Here are some of the features accounting software should offer to help you save time and better manage your finances:
- Basic accounting tasks. Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), income and expense tracking, financial report generation, and client and supplier management.
- Automation. Things like automatic billing, recurring payments, overdue notifications and other automated processes save you time because you will not have to manually do them yourself.
- Quote and estimate creation. Use customised, pre-made templates to create quotes and estimates for clients; then automatically convert them into invoices.
- Tax preparation. Make both your life and your accountant’s life easier with accounting software that can help you with your taxes. Features include automatic tax calculations, multiple tax rates and tax reporting, and the ability to instantly email all necessary data and files to your accountant at the click of a button.
- Multiuser access. Most accounting software products give access to multiple users (e.g., you and your accountant), so you don’t have to do everything on your own.
- Payroll processing. Enter time sheets, calculate pay, print cheques and pay your employees — without all the legwork.
- Mobile access. Use your accounting software anytime, anywhere on your mobile phone or tablet. This is particularly useful for business owners who are always on the go and are too busy to sit down and manage the books at a computer.
Before deciding on the right accounting software, ask the software provider:
- Is your software built for small businesses?
- Is your software a good fit for my industry?
- Do you offer customised solutions to fit my business’s needs?
- How many employees and clients can your software accommodate?
- How can your software help me comply with GAAP, tax laws and financial regulations?
- How is my data backed up? Can access be restored immediately during an outage?
- What security measures do you have in place to keep both my business’s and my customers’ data secure?
- What is the total cost? Are there any setup or cloud storage fees?
- What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)
LeeP Accountants are Quickbooks Certified Accountants; however, we do use other software providers such as Xero, Kashflow and Wave. If you would like to find out more about our services, please contact us on [email protected] or call 01733 699033