If you’re considering using a piece of cloud-based accounting software, such as Xero, QuickBooks, or Sage, then it’s important you understand what each option can offer you.
The benefits of using this software include its accessibility, meaning financial data can be managed wherever there’s an internet connection, which is particularly useful for teams working remotely. As well as this, it may give you a more insightful perspective on your numbers, allowing you to forecast and plan ahead with greater confidence.
In general, businesses (sole traders, partnerships, limited companies) should be moving away from using manual records and spreadsheets for their main cashbook accounting data. Manual data entry is prone to inaccuracies, such as entry and calculation errors. Additionally, organising paper records and digging out receipts for your accountant at the year-end can be time consuming and tiresome.
However, before you commit to a specific platform, or to paying a subscription, it’s important you understand first, what your particular needs are, and second, the different features each package offers.
What follows are some worthwhile considerations:
Ensure that your software complies with UK accounting standards and regulations, such as those set by the Financial Reporting Council (FRC), HM Revenue & Customs (HMRC), and Companies House. This will become increasingly relevant as Making Tax Digital (MTD) reforms take place. Xero, QuickBooks and Sage all meet MTD requirements for VAT, allow for digital copies of receipts and bills to be kept in one place.
Evaluate the software provider’s data security measures, including encryption, access controls, and regular security audits. Verify that the provider adheres to data protection laws, such as the General Data Protection Regulation (GDPR), to ensure that your financial information is stored and handled with maximum security and in compliance with UK privacy regulations.
Consider whether the accounting software integrates with other tools and systems you use, such as banking platforms, payment gateways, or customer relationship management (CRM) software.
Your bank account can be linked directly to the software ensuring completeness of income and expenditure. Consequently, accounting records are kept up-to date meaning your year-end accounts could be produced more efficiently and with less effort.
Many providers will have corresponding mobile applications, where receipts can be photographed and uploaded as soon as you pay for something. Also, invoices can be raised and emailed to your customer immediately after you have completed the work. This could free up some of your time to dedicate to other activities that either require your attention or are more enjoyable.
As well as this, payment services can be linked to the software, so that your customers can pay your digital invoice online using a debit or credit card.
Keep in mind where you may want to take your business in the future, to try and anticipate potential requirements…
Compare pricing plans and models offered by different software providers. Evaluate whether the pricing aligns with your budget and whether the software offers value for money based on the features and support provided. Consider factors like monthly or annual subscription fees, additional charges for add-ons or extra users, and potential price increases as your usage scales.
Some banks are offering their own accounting software, or are partnering with specific software providers; this allows for a cheap, or in some cases, free way to digitising your records.
Research and read reviews from other businesses or accounting professionals who have experience with the software. Consider factors like user satisfaction, reliability, customer support, and the reputation of the software provider within the accounting community.
If you employ an accountant, make sure your software has the option to invite them to access your accounts too for free; this means if you have a question, they can look at real time information.
Speak to one of the Burton Sweet team and they will be able to advise you on what cloud accounting software would best suit your purposes.
We’re offering up to 35% off QuickBooks subscriptions; find out more here…