So, what is online accounting software all about?
Computers and book keeping go together. Many years ago, it was all completed on paper – and some business still do. With the introduction of computers many book keeping systems were transferred to spreadsheet or accounting software. All of these systems are accounting packages – what they actually do is the record keeping or book keeping not the accounting. A well designed and reliably used accounting package enables a good accountant to add lots more value to your business than just the number crunching.
Application of the latest technology has given rise to cloud accounting or online accounting software. For small owner, managed businesses, we feel that this has been the most significant development to the accounting and book keeping world since the introduction of the spreadsheet. The online accounting platform has enabled significant additional functionality that is capable of revolutionising the book keeping function of most small businesses; to free up time for the owner-manager to concentrate on the profit-making aspects of the business, rather than the admin, or to fit in with their active lifestyle.
What are the benefits of online accounting software?
- Undoubtedly ease of access is the prime advantage of cloud accounting. Online accounting means just that – it is online. You can access your businesses financial data from anywhere worldwide, at any time without having to download and install anything on your desktop. All you need is an Internet connection. This ability to take care of your bookkeeping on the go means that business owners are not stuck in one location but can spend more time travelling, gaining new clients and taking care of other important business matters without having to be in the office.
- Easily access data wherever you are. Smartphone and tablet apps give you information on the move because software housed in the cloud can be easily accessed anywhere there is a connection, anytime and from pretty much any device. Cloud accounting supports those businesses which have mobile personnel like service and sales teams.
- Easy invoicing: Send professional looking estimates and invoices whilst you are out and about – no need to spend the weekend drafting and sending out the previous week’s invoices as it can now be completed on the go using your laptop, tablet or smartphone. Track your invoices all the way to payment and manage your cash flow by checking who owes you money at a glance.
- Book keeping made much more efficient with direct data feed downloads from your bank accounts, to enable the input of data with the minimal level of data input.
- Purchases and expenses can easily be recorded whilst on the move as most of the packages available provide mobile applications to quickly and easily record the transaction. Some also allow receipts to be scanned easily using a smartphone and stored as part of the transaction record in the software.
- Many online accounting packages are able to integrate with other systems; for example, point of sale systems for a retail business and front of house systems for pubs and restaurants, stock control and inventory management.
- Real time financial information – when managed properly cloud accounting will give you and your business up-to-date and current financial information (most packages have a financial dashboard which helps this). This can assist you to respond to customers quickly and to evaluate business performance by giving you financial information at your fingertips.
- Collaboration with your accountant at any time. By having access to your numbers, we can support you throughout the year and complete all of your accounting and tax returns well before deadlines.
- Payroll: Many providers also offer simple to use payroll software that is capable of real time information submissions to HMRC and handle auto-enrolment pension contributions.
- Price is always important and another advantage of cloud accounting is that it can be the cheapest way to go. Firstly, there is no need to pay upfront for all of the cost as you would with a desktop accounting package – because you pay monthly. Secondly, unlike buying an accounting software package, it requires absolutely no updates as they are automatically included in the price. The subscription usually includes a technical help service either online by telephone or both.
- Backup and data security is made easy. Security is similar to that of online banking and you don’t need to pay extra for online backups because they are done for you. You don’t need any special servers or desktop configurations – just an internet enabled device to use it.
Is online accounting right for you and your business?
We can help you with this decision. Whilst most online accounting packages broadly offer similar functions, some are better suited to certain types of business than others – each has their pros and cons:
- Some were designed with a focus on sales invoices and others provide a more complete bookkeeping system. Some are originally from USA or New Zealand so may not be right for every UK business.
- Sage One offers a very clean, simple and easy to use package that is capable for the majority of small businesses
- Clearbooks provides additional features that are extremely useful for contractors and sub-contractors that are required to submit CIS returns to HMRC
- FreeAgent offers a very clean and comprehensive package that is capable of handling most business’ needs
- and Xero provides a very comprehensive system with many add-ons available
We have reviewed the most popular packages and have narrowed down our preferred online accounting software providers to those noted below. The links will take you to a page containing information about the product which has been supplied from the software provider.
You don’t want to have to change systems after a few months, so it is important to take time to choose the right one for you and the future of your business. The cheapest option isn’t necessarily the best. And your friend’s recommendation, while well-meant, might not fit the needs of your business.
Please contact us if you are considering a switch to online accounting software.