When you’re starting up a new business there are hundreds of questions to be answered. Do you need a separate business address? How do you register with the HMRC and crucially how will you keep track of all the financial incomings and outgoings? Many small businesses begin life with a pretty basic spreadsheet setup but if you have big plans for your business, as most of us do, then it makes sense to start with the right systems in place from the off. Investing in accounting software is something every small business owner should do on day one.
Whilst there are some aspects of your business you can learn such as social media management and marketing, accounting can take a lot more time to pick up and a professional system designed to make it simple for you is a way of guaranteeing a higher chance of accurate accounts.
It does help to have a basic understanding of accounts as you may need to do things like produce your own invoicesbut as a rule software is so advanced you just need to be accurate with your inputting.
Common Features of Effective Accounting Software
You can simply open a spreadsheet and devise a simple system for managing your accounts except you’ll soon see it’s not as simple as you think and you’ll get bogged down in formulae and working out what goes where. It’s simply not time effective even if it does initially seem cost effective.
There is a huge range of accounting software on the market catering to different types of user. It’s important to take your time with your choice as some software may promise the world, look flashy but in the end not have the basic functionality you require. Understand your business needs before you decide on the type of software you need as you don’t want to spend more than necessary on a programme if you’re only going to use a tenth of its capability.
The majority of accounting software suites will now include:
• General ledger information – the simplest accounting interface displaying accounts payable vs. accounts receivable. Most software packages also have extensions available which allow for the inclusion of tax documenting and payment handling.
• Double-entry bookkeeping – much like the traditional bookkeeping method this is simple an automated way of tracking both where money is coming from and where it goes.
• POS – most accounting software offers point of sale capability so can internally process electronic payments such as PayPal as well as debit/credit card payments.
• CRM – a customer relation management tool so the software can be integrated into your customer-facing platform, so usually your website, and provides technical support for your customers where you may not be able to.
• Inventory Management – the inventory management element of most accounting software programmes is particularly useful for e-commerce businesses and can be integrated with the POS feature to ensure only items in stock are sold.
• Software as a Service – SaaS is a relatively new concept and can come about with the growth and development of virtual offices and cloud computing. SaaS keeps all accounting information at a secure but decentralised location rather than on a private intranet so it can be accessed via passcodes wherever you may be.
Accurate record keeping is an essential part of running your own business and the range of packages means there genuinely is something for everybody. If you’re daunted by the prospect there are plenty of experts out there willing to give you further advice and help you choose the product right for your business.
If you’re not too sure where to start, we can highly recommend KashFlow. It’s easy to use, offers great support and integrates with a huge number of applications and services which will save you time, money and make your life easier from the very start.
After your 2 weeks free trial, you can enter discount code: AFF2105441 and you’ll make a saving on your subscription for 6 months.
Feel free to browse our range of articles related to helping start-up and small businesses. From business ideas to funding and how to market your business there is something to help you at each and every step on the business ladder.