If you run a business of any size, you’ve probably used accounting and bookkeeping software at some point. Accounting software makes it easy for you to track your business’s financial health and monitor the way money moves in and out of your business. You can use it to create invoices, track expenses and generate a variety of reports that can help you asses your business performance and inform key decisions. But with so many options out there, how do you know which is the best one for you? We have a few tips to help you make the right decision for your business.
Since this is usually the first thing people think about (particularly if you’re starting out), we thought we’d address this first. Accounting software’s all vary in cost and billing model, so it’s important to find something that fits in with your budget and needs. Some will demand a high upfront cost to buy desktop software (though this is rare now), while most will work on a Software as a Service model and sell you a license on a monthly subscription. You can usually choose from multiple billing plans, ranging from £10 to £40 a month and even higher, and there may be an annual payment option that offers a discount for bulk payments. Ultimately the cost will be determined by what level of functionality you need. So look at what’s included in each package, and compare the prices of those, not just the cheapest or most expensive options from each supplier.
Depending on the needs of your business, you might need some extra functionality, so it’s important to remember to check what’s included and what isn’t. Accounting software can help you see a bigger picture of your business and make day to day tasks much easier – but you should only pay for that if it’s going to be useful to you. Here are a few features you should look for in your bookkeeping and accounting software:
Basic Accounting: Most small businesses can make do with accounting software that offers basic functions like invoicing, income and expense tracking, financial report generation, and customer management. However, if your business sells more than just a few products, you may also want software that tracks your inventory, manages vendors and assists you with purchase ordering. Or, if your business provides services, you could want functionality that makes it easy to track time and invoice billable hours.
Time Saving Automation: If you’re raising a lot of invoices every month, or your expenses tend to be in the same place for the same amounts all the time, automation features could save you a lot of time. Automate recurring invoices, reconcile your accounts with the click of a button or automatically create purchase orders for new stock when your levels dip.
VAT Preparation: Do you want to make you (and your accountant’s) life easier, and have your bookkeeping software help with compiling your VAT data ready for the HMRC returns? If so, check that your chosen programme can do the correct VAT calculations and VAT reporting. It will also need to be compliant with the upcoming ‘Making Tax Digital’ requirements due to be introduced for most VAT registered businesses in April 2019.
Add-On Services: Do you need any extras, like payroll services or payment processing? These usually come as an added subscription charge, but might save you money compared to buying them elsewhere.
Third Party Integration: Can your bookkeeping software integrate with the programmes and services you already use? Can you set it to bring in data from your bank account, CRM, POS, inventory software and e-commerce platforms? Or will you have to do all of that manually?
When you’re comparing bookkeeping and accounting software, it’s important to ask yourself how you plan to use it – since this will affect your choice. Will it just be you using it, or will you need multiple users to have access? For example, many people will give their accountant and bookkeeper access to their software to help stay on top of things. Or if you have a finance department, you may want full access for them, but limited access for sales team who only need to raise invoices. If you own more than one business, you may also want to choose accounting software that supports multiple small businesses under one account with no additional costs – or else the subscriptions will add up quickly. And finally, where and when will you be using it? Some business owners are happy to simply stick to a desktop software version, however, more commonly now, they want to be able to check their books on the go. A lot of providers will offer mobile apps as well as cloud storage of your data, so you can monitor key information and get core tasks done no matter where you are. This will influence whether you opt for a cloud-based provider, or a desktop one.
Our Top Picks
Of course, as bookkeepers ourselves, we have our preferences when it comes to software. We work with all sorts of platforms and packages, but there are a few we see time and time again:
Xero: Xero is widely acknowledged as one of the top pieces of cloud based accounting and bookkeeping software – especially if you’re working on a Mac. Xero is great if you’re just starting out, or if you need your accounting to be simple and straightforward every month, but is designed to grow as your business does. We like that it’s affordable, easy to use, offers a ton of add-on features and integrates with hundreds of third-party business solutions, many of which you probably already use. There is also a 24-hour email and live chat support function, so there’s always someone there to help you.
FreeAgent: Unlike a lot of bookkeeping and accounting software products that limit your transactions unless you purchase a more expensive package, FreeAgent supports unlimited users, clients, invoices and transactions for one monthly price. It’s also a cloud-based piece of software, and comes with a built-in project management feature that makes it perfect for keeping track of billable hours and expenses. As a FreeAgent partner, we recommend it for freelancers, consultants and other project-based businesses.
QuickBooks: One of the most popular accounting software packages out there (and for good reason), QuickBooks works for all types of small businesses. With three different small business plans to choose from, plus a separate plan for the self-employed, freelancers and contractors, it’s got something for everyone. Both new start-up businesses and bigger, established businesses have benefitted from its range of features, which cover basic bookkeeping to advanced accounting and business analytics.
Sage: Sage is one of the bigger brands, and it’s been around a lot longer than most. Sage Business Cloud Accounting has two plans for small business owners, starting with invoicing, expense management and reporting, and building up to the creation of quotes, estimates, tracking and inventory management. It’s most popular with retail based businesses due to its ability to integrate with POS systems, or businesses with large finance departments thanks to its support for multiple users and payroll systems.
At Rosemary Bookkeeping, we work with small and medium sized businesses across the Reading area to take the pain out their bookkeeping. From helping you choose the right software to use, software supply, training and data migration, to a complete outsourced bookkeeping service – we can help. If you’re just starting out, or you’re looking to hire a bookkeeper to support you as you grow, we’d love to help. Just get in touch with us today for your free consultation.