There’s nothing more exhilarating than starting your own business. You’re offering a great product or service, you’ve got your sales pitch down, you’re promoting your company and expanding your customer base – all lovely. But alas, whether you have a dog walking service, an online shop or the local deli, there’s one dreaded area that all businesses have to deal with – accounting. Sure, there’s no legal obligation to stay on top of your bookkeeping, but if you don’t have a system or an accountancy firm in place, you’re going to be in a world of hurt when those tax deadlines come a-looming.
Thankfully, gone are the days of endless paper ledgers and giant button calculators (though they’re handy in a pinch). Now, there are lots of e-solutions to help you stay on top of your incomings and outgoings – but with so many choices, how are you supposed to know which one is right for your business?
Digital Accounting Packages
There are quite a few industry favourites out there, with their own pros and cons. So whether you want to opt for Sage or Xero accountant, you should think about not only your business current, but long term needs as well.
If your company is relatively small, then one of the more basic packages is a great starting off point. You could even make do with Excel – a tidy spreadsheet is better than nothing – but unless your organisation is going to plateau at a relatively low level, you’re going to expand, and with expansion comes more paperwork. Will there be stock options? Do you have a lot of people on your payroll? Are they freelancers or permanent employees? Do you have a lot of assets? Are you on top of your overheads? What CRM system do you use?
That’s a lot of things to consider and you can easily let it get away from you whilst you’re busy with the day to day operations. Nobody can be expected to be a fully trained accountant and sooner or later you’re going to need one – and friendly reminder, they charge by the hour. The easier it is for them to go over your books, the better.
You need to keep records for a substantial amount of time, so you need not only a software package that can keep up with your business growth, but also a system that is easily updated and adaptable to businesses of different sizes. Ease of use is one of the most important things to consider when choosing a package and you should be aware that once you get used to an accounting system, it becomes very tricky to switch to a new one, both from a data transfer and learning perspective.
Top choice for a small business
For a small or new business with potential for growth, the newcomer Xero is actually a great choice – it was originally designed for smaller businesses but now has lots of easy to use ad-ons that can turn this accounting tool into a powerhouse that can handle 7 figure turnovers. Woe betide you if you get sucked into something like SAP, which is notoriously over-complicated, costs a fortune and you’ll need NASA engineers for any technical help. Going for the cheapest option is also not the most advisable idea, since many smaller software packages might not move with the times or even go out of commission – you’ll want something with decent upgrades and good customer service!
At the end of the day, despite what the men in suits will try to tell you, all accounting software does the same thing – it’s adding and subtracting and record keeping. Ultimately, you should see what you’re most comfortable using on a day to day – regardless of your chosen package, effective accounting comes down to you and getting into good habits – keeping your receipts and invoices organised, keeping up with data entry, and definitely not leaving it to the last minute!