But the reign of these leading names is being challenged by a new generation of web and desktop-based software. Accounting software might sound dull, unless you are an accountant, but it will allow you to keep track of your business' cash flow, invoices, profit and loss, tax and even VAT in some instances.
In big successful organisations the finance director is often considered one of the most important people. If your business is not of the scale to justify having one, spending some time researching the best helping hand for your accounting - and a bit of money on the most suitable software - could pay off handsomely in the form of better profits.
Remember, it doesn't have to be a choice between paying for a professional accountant and going all out DIY on your finances and tax.
While many people feel comfortable conducting their own business finances, others might want professional advice, especially when it comes to their tax bill, either because they don't have the time, want to make even smarter financial choices, or lack confidence.
Lots of freelancers or small businesses find themselves somewhere in the middle, and pay for professional advice as and when they need it.
Whatever your situation, accounting software helps you to compile business information in a clear, manageable way.
Many systems allow free access to your accountant - so look out for that if it's something you think you'll need.
Different systems suit different people, but the below is a guide to some of the best.
WHAT YOU NEED TO KNOW ABOUT ACCOUNTING SOFTWARE
Chartered accountant Simon Gunn gives his advice: The requirements of any accounts system are to keep track of income and expenditure and tell the business owner how his or her business is doing (in enough detail to keep HMRC happy).
In a really simple business structure, a quick look at the bank balance might be enough to get an overview, but it doesn't always tell the true story when things are moving quickly - which is where accounting software comes in.
However, using a computerised accounting system can be a project in its own right, and getting one set up can be very time consuming.
Apart from manual systems, including paper books and spreadsheets, there are two basic options, a cloud based system or a system where the software and data reside on your own computer and network.
Prices vary but most cloud systems are paid for monthly. You can find good advice from the Institute of Chartered Accountants, (the body which the best qualified accountants belong to), which has published a guide to online accounting packages.
But beware, you might need to keep your own backup of data (preferably in a form other software can understand) and you shouldn't rely on the cloud system to keep your valuable data safe.
The de facto choice of accounting software for small businesses is Sage 50 or, its cut down sister Sage Instant. And Sage have a cloud based version as well, which you pay for on a monthly basis.
However, these systems are not cheap for an entrepreneur looking to keep costs down.
If you keep your eyes open you can find free versions of some software; TAS Basics, built by Sage will do a lot of what you need to keep basic records even if it doesn't file VAT returns online. But if you get that far you will probably need to start paying for your software.
Should you hire an accountant?
What about employing someone to keep your books for you? Well, a qualified accountant will charge upwards of £40 an hour doing as much as you can yourself with accounting software.
However, getting the best advice is invaluable and is bound to save you money in the long term.
But, if cash flow is a big issue from day one, you can easily stay on the right side of HMRC so long as you are prepared to wait in their call queuing system or navigate their website. They are a very good source of advice to help you stay on the right side of the tax rules.
What can accounting software help with?
There are a vast range of services and tools available with accounting software, and they vary between individual offerings.
The most basic software allows you to record your income and expenditure in a clear manner.
More complex offerings allow you to fill out tax forms and file returns, control stock levels, make and send invoices and even carry out payments in a variety of currencies.
KashFlow: Good for payments and avoiding VAT headaches
Cost: Two weeks free trial. £18 per month flat fee. Currently offering a free book-keeping course worth £200.
KashFlow’s dashboard might be low key, but the information is presented clearly. There is also a nifty form which generates a business health check score, with suggestions on how to improve.
Selling points
KashFlow’s selling point is direct VAT filing. You run the VAT report, enter your HMRC online filing credentials and submit - easy.
Given how much of a chore many small businesses find submitting returns, the ability to do so without leaving KashFlow is a major thumbs up.
THINK OF THE FUTURE
When picking out accounting software for your business, always check out how easy it is to transfer information to a different system.
You may find you don't like the software, or want to upgrade to keep up with business growth down the line. You don't want to have to start your figures from scratch.
Another tempting feature is its exceptional secure integration with a variety of payment card processors, including SagePay and Barclaycard, which means your accounts will automatically be updated with any payment information.
KashFlow is also an impressive, speedy, invoicing tool. You can easily create quotes and turn them into invoices using one button. Plus, you can schedule reminders by email when an invoice or payment is overdue.
Some accounting software only lets you send a certain number of invoices per month. But KashFlow's monthly payment is all inclusive – you can add as many invoices, customers, suppliers and transactions as you need to.
KashFlow's stock management option is also a great feature - it's unusual for accounting software in this price range to offer such a tool. It’s basic, but functional: you enter the number of items in stock, and that decreases when you issue an invoice containing that item. You can also set a reminder to warn you when stock is running low.
Customers get unlimited telephone support for the first two weeks while they are getting set up. After that it provides 24/7 email support - with a promise to reply to each email within 20 minutes, no matter what time of day.
Cons
A real drawback for some, however, will be limited support for multiple users - you can’t allocate people different passwords or permission levels.
FreeAgent: Good for freelancers or contractors
Cost: Starts at £15 a month for basic Sole Trader software. 30 day free trial.
Geared towards a small business owner or freelancer with not much accounting experience, FreeAgent is seriously easy to use and has developed a firm following.
It uses simple headings like Work and Expenses rather than Accounts Receivable or Accounts Payable and lets you reorganise your overview modules by dragging them around.
Selling point
FreeAgent is probably best suited to freelancers or contractors.
It allows you to organise your expenses and outgoings or income by project, set up a budget for each one, and provides an overview of each, to help you keep on top of how each one is doing separately.
One of the major draws is the multi-user options and time tracking feature, which makes it very easy for you to manage remote workers or freelancers. Each user can log in and input information on their own timesheets. This is then displayed as an overview of the entire project for the manager or business owner.
Employees set up as users are not able to view or edit any of the financial settings.
Another handy tool is a one-click report that creates a self-assessment summary for income tax, which you can copy to your tax return.
Invoices can be easily created and sent by PDF and email. Plus, you can create payment reminders at set dates after invoice due dates.
FreeAgent also offers a free 20 minute call to help iron out initial setup queries.
Cons
You can’t accept electronic payments other than PayPal, which may rule it out for larger businesses.
There's also no stock control functions, which means its not really geared towards manufacturing businesses, for example.
Sage One Accounting: Good for 24/7 support
Cost: Starts at £10 a month plus VAT for basic account. 30 day free trial.
Sage One Accounts is an online accounts service. Designers claim it doesn't require any accounting knowledge or previous experience.
Selling points
It is Sage's most basic offering, is low-cost, and ideally suited for freelancers, or those that just need a simple accounting system with invoice, tax assistance, profit and loss information.
The major benefit for this service is that it comes with free telephone and email support, which means it could be a great option for start-ups, small businesses, or freelancers nervous about doing their accounts for the first time.
Because the software is online, you can access Sage One from anywhere at any time via the internet.
Cons
Sage One does not allow for foreign currency transactions or stock control.
This means if you are working in manufacturing or you're a financial adviser it probably is not right for you - although you can upgrade to Sage's other software options, which also offer free 24/7 support.
Sage has also got a pretty bad reputation for being complicated and inflexible.
Although this offering goes some way to reverse such concerns, the software is really more aimed at accountants, who can set it up and look after the tricky bits, rather than for businesses looking for a DIY solution.
- Business Accountz is another easy-to-use program for sole traders and offers free email on online forum lifetime support, which you buy and then download onto a computer.
You'll also get telephone support for free for 30 days after signing up. From then on it costs an extra £96 for Basic users (on top of a £69 package), or £168 for their Professional offering (£279 a year, excluding the telephone support).
Accountz promise to get back to you within one working day via email with any support.
Kashoo: Good for multi-currency payments
Cost: $20 a month pay-as-you-go or $192 a year. One month free trial.
Kashoo provides financial statements, full bookkeeping features, automated bank data imports and expense tracking.
Selling point
As well as creating invoices, accepting payments, printing checks and viewing reports, Kashoo is one of the few online accounting services that provides decent multi-currency facilities.
Other software will allow you to set up your account to one currency, but Kashoo allows you to work with more than one - plus it regularly updates exchange rates.
Even better, it can also manage a number of different tax rates and tax filing periods and download bank transaction data from any bank.
As well as its impressive currency options, Kashoo generates a range of helpful reports, including profit and loss statements, transaction logs and change logs.
Your accountant or business partner also gets free access to your data. This is a useful feature considering that many similar companies charge extra for this.
Kashoo is entirely cloud-based. You can also take advantage of the free iPad app, although Kashoo does not include an iPhone or Android-specific app.
Cons
While Kashoo is excellent at preparing invoices and performing accounting tasks, you're not able to track projects.
VT Cash Book: Good for no-frills
Cost: Free to download.(Not cloud-based).
If your accounting needs are simple then VT Cash Book might be a good option for you.
Essentially, this software helps you to clearly record your income and expenditure. There's no database of customers or suppliers and no invoicing or purchase order module. You simply enter transactions.
Still, the program does support multiple accounts, has a simple reconciliation option, and can help with your VAT returns. So if you're a small trader, and just looking for a way to record your cash transactions, then VT Cash Book is worth a look.
Selling point
If you have more than one bank account, you can easily transfer cash between them.
Another useful point is that you can extract all information into excel, which can be handy if you need to work on your figures. Your VAT options are also clearly marked and pretty straightforward. Plus you can view all your transactions daily on a special report.
Cons
This program is pretty basic, although on the plus side it means it is simple to use.
A big concern among users seems to be the ease of amending data - with a right click you can correct pretty much or delete anything without an audit trial behind.
All information can be back up on the memory pen and emailed if needed.
Best free accounting services
There are a few - again it will depend on your preferences and needs.
TurboCash is a free accounting tool, which you download to your computer, rather than accessing on the cloud.
It has all the usual standard functions - stock control, invoicing, debtors, creditors, general ledger, VAT accounting, balance sheet and income statements, as well as plenty of reports functions.
It also supports multiple users, and even multiple companies.Plus, it's one of the few free accounting tools that holds back on the 'upgrade' messages.
Turbocash doesn't seem to have been made with those new to accounting in mind, so it can seem a little confusing, although it does provide a decent online manual.
NCH Express Invoice is free only for businesses with less than five employees, which it asks you to confirm every time you use the program.
Express Invoice does what it says on the tin. It's an easy-to-use invoice package. You simply enter a customer's name and the product details and it creates an invoice for you, which you can then print or email.
gnuCash is easy to use and has most, if not all of the features, a small business owner would need. Because you download it to your computer, rather than accessing the software online, cloud-based sceptics should give it a try.
gnuCash is suitable for use on both Windows and Apple based operating systems (as well as Linux and others). It comes with 40 ready-made financial reports, from a simple profit and loss report to reports on your cash flow, assets or liabilities.
Wave accounting is free, cloud-based, accounting software. It supports itself by placing advertisements within the software and emailing you special deals for other software.
There are some paid upgrades, like payroll for example, but it does offer unlimited invoicing.
Invoices can even include a Pay Now button so you can take credit card payments (for a small fee). It also automatically backs up all of your data.
0 comments:
Post a Comment