Find the best cloud based accounting software for your small business

Small business accounting software has developed significantly in recent years. Thankfully, the advent of cloud computing has consigned the days of buying book-keeping software in a box and installing it on your computer to history.

At CHW Small Business Accountants in Bolton we recognise that with so many different web-based accounting solution providers out there, it is both difficult to and important that you select the right system for you and your business.

We have experience and knowledge of all the major providers and can help you to select and implement the best online accounting software for your needs.

New business?

If you’re starting a new business, you’ll need to maintain records of your financial activities from the outset. So, it is worth spending time now to think carefully about the accounts software you are going to use because it will save you a lot of time, trouble and wasted effort down the line.

Many cloud based accounting packages offer really useful features for start-ups and, unlike some of the traditional accounting packages, they are quite inexpensive. Usually, you just pay a small monthly fee – this can really help cash flow in those early days.

As a new business owner you are probably trying to do everything yourself, so having an online accounting system which lets you raise invoices, update your bookkeeping, look at the list of outstanding debtors and creditors, analyse profits and cash flow – all from anywhere you have internet access – can really help you save time and manage your business more effectively.

As a start-up, the big problem you face is that until you have actually used one of the online systems available, it’s difficult to know for sure whether it’s suitable for you.

Consider the pros and cons

So many online accounting packages have emerged in the past few years and they all come with their benefits and limitations.

Some were designed with a focus on sales invoices whilst others provide a more complete bookkeeping system. Many are originally from the USA or New Zealand so may not be suitable for all UK businesses.

You don’t want the hassle of changing your system after a short period of time, so invest the time to choose the right system for you and the future of your business. The cheapest option isn’t always the best and whilst recommendations are usually well meant, remember, what suits one business doesn’t suit all.

To help you establish which of the cloud based accounting options is best for your business, here are a few questions you should ask yourself.

Is there a ‘VAT’ module which suits my business?

If you are, or expect to become, VAT-registered you will need to check some details;

  • Can the software cope with cash and invoice accounting for VAT?
  • Can it accommodate the Flat-Rate VAT scheme?
  • Can it produce a VAT return and submit it to HMRC as part of the package?

Not all online accounting packages implement Reverse Charge calculations automatically, so if your business has slightly complicated VAT rules to follow, you will need to check whether this feature is included. You could end up making costly mistakes on your VAT returns with the wrong software.

Reporting

In order for you to measure performance and manage your business effectively, you need your accounting software to produce a range of reports. Popular and arguably essential ones include;

  • Monthly profit & loss reports with comparisons of previous periods
  • Monthly balance sheet reports detailing assets, liabilities and capital balances
  • Reports of your top customers or suppliers
  • Aged debtors and creditors reports
  • A snapshot of profit & loss for the current financial year with an estimate of likely tax liability

Ascertain what features are most useful to you and make sure the system you choose offers them.

Link to the bank

It is almost essential that the software links to your bank account. Some require you to upload bank statements, whereas, others allow you to set up an automatic feed from your bank account and credit cards so all banking transactions are detailed automatically.

An automatic feed is most definitely better as it saves time and mean your figures are always up to date.

Stock

Some systems can handle stock, some can’t. If you trade in products, this is a necessary feature for you.

Payroll

This facility is sometimes included in your software package and sometimes it’s available as an add-on. Consider whether the payroll module offers RTI submissions to HMRC directly from the software.

Permission levels

Whether you are working with teams or individuals and want to allow different accesses, make sure the software you are choosing will allow that.

Journals

Accountants have to make certain adjustment entries into accounts that cannot be entered through your usual modules. Whilst this may not sound important to you for your day to day bookkeeping many of these accounting entries, such as year-end adjustments of accruals, prepayments or monthly wages are done through journals and if your accountant is unable to process them it can make it difficult to match your system figures to your final accounts.

Multiple currencies

If your business requires you to have multi-currency accounts make sure your software provider can facilitate this – not all can.

Annual tax return

Most online accounts options can use your information and use these to submit your personal self-assessment tax return.

Support

Find out what level of support is available. You will undoubtedly have some questions that need answering and problems to overcome, so ask what help is provided.

Mobile version

Most cloud based accounting options offer a mobile version, allowing you to access your accounts through your smartphone / iPad. But, in some cases, mobile versions have very limited functionality so it’s worth deciding before signing up how important this is to you.

For further advice on cloud accounting for your small business or to discuss any other issue contact Nicola Roby at CHW Small Business Accountants in Bolton on 01204 534031 or via our contact us page.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

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