Accounting Software FAQ
How can accounting software help my business?
Accounting software can transform the way you run your accounts. It helps you to keep accurate financial records while delegating many repetitive everyday tasks to technology, leaving your busy team with more time on their hands for other work. Accounting software can even help to ensure that you meet your legal requirements for VAT, taxes, and payroll.
Depending on the product you choose, your accountancy software may be able to help you:
- Create forecasts and budgets
- Record expenses
- Create and send invoices
- Offer quotes and estimates
- Check your cash flow or profit and loss
What should I consider when choosing accounting software?
The right accounting software will depend on your unique needs as a business. Ask yourself if you'll need access to online invoicing services, payroll packages or VAT management. The kind of business you run (and its size) is likely to identify the level of accounting software you need. For instance, a sole trader with a low turnover won’t need online VAT management or payroll. But a growing limited company will benefit greatly from these kinds of features, along with extras like real-time bank feeds and automatic currency conversion.
Do I need to be an IT expert to use accounting software?
In short, no. Most accounting software is designed with usability in mind. That should mean that you'll have no trouble using your new system on a regular basis. However, you can research the simplicity of the product you choose before you sign up for a contract, or even request a trial period if you want to make sure that you're not choosing anything too complicated. Additionally, if you have any problems, you should be able to turn to the customer support of the developer or accounting company for help.
What extra features could accounting software include?
Some companies might specifically want to keep things simple with accounting software that's as straightforward as possible. A basic package might include expense and income tracking, invoice generation, financial reports, and client management tools. However, if your company is a little larger or your services more complex, it’s worth keeping an eye out for some more advanced features like:
- Quote and estimate templates
- Automatic billing, recurring payment features, and past-due notifications
- Tax preparation services featuring automatic tax calculations, tax reporting, and file management
- Payroll processing, including time sheets, payment calculators, check templates, and bank feeds
- Mobile access that allows for the use of accounting software through any device with a secure internet connection
What accounting software do I need as a freelancer or sole trader?
As a sole trader or a freelancer, you’re likely to need a basic package of accounting software including invoicing, bank feeds, tax management and cash flow management features. Depending on what you do, and whether you hire any employees or extra freelancer to help with your company, you may need additional services like payroll and online VAT as you grow.
What accounting software do I need as a larger limited company?
Larger companies tend to require more comprehensive accounting software packages right from the start. Often, this will include comprehensive VAT management, payroll features, online invoicing, and even additional extras like currency conversion, tax management, and more.
Does accounting software replace my accountant?
While accounting software is useful for automating number-crunching activities your accountant or members of staff might handle currently, it shouldn't replace an expert entirely. Often, it's better to think of accounting software as a way to simplify and improve the relationship you have with your accountant – and your accounts!
Most software includes features that make working with your accountant more productive and efficient, such as automatic pay reminders, VAT calculations, and the use of standardised invoices.
When is a good time to start using accounting software?
Businesses can begin using accounting software whenever they feel ready. However, the easiest time to switch is at the beginning of your new financial year. If you're unable to wait that long then consider making the move at the end of your next VAT quarter if you’re VAT registered. Speak to your accountant for additional guidance.
Is it easy to switch to a new accounting software package?
Sometimes, transferring all the valuable business data your accounting software has gathered can be tricky, but many software suppliers now provide solutions to make it easier to transfer or "import" data from other sources.
If you're considering moving or changing packages as your business grows, it is a good idea to discuss the options and see if you can get your chosen supplier to help you and of course, to run things past your accountant prior to making the switch.