Starting a small business is exciting, and choosing the right software accounts package will help it to grow
If you are starting your own small business or have recently started one, then you will already be aware that you need to keep track of inventory, insurance, payroll and a myriad other financial things.
In years gone buy you would employ an accountant with a ledger and years of training and experience. But these days its hard to afford an accountant when you are looking to plough all your spare cash back into helping your business to grow, apart from maybe the end of year returns. So you have probably already decided that you are going to go it alone and do your own accounts.
But are you going to choose to do it the old fashioned ledger way, or to go for software?
The old fashioned way is a great option if you don’t have too many parts to your business, or if there is only you in the company. For example if you are setting up in window cleaning there isn’t a huge amount of options and simple book keeping might not need more than an accounts book,pen and somewhere safe to store your receipts and bank statements. You just have to make sure that when the bank statement comes in you cross reference all your transactions to make sure that you haven’t made any simple mistakes – and as a person who is dyslexic with numbers I can tell you that those errors are hard to find!
You could go one stage further and use an excel spreadsheet, but be aware that they can get complicated pretty quickly and might take you a few days to set up.
Home accountancy software on the other hand is a great boon to the new business. There are often templates and wizards to help you get started, and on some of the more professional packages you can import files that you have downloaded from your bank account (usually in ‘csv’ format – enquire on your bank’s online site to see if this function is available). The software package will then do checks and balances for you to make sure that you haven’t made any errors.
Probably the greatest advantage of software over ledgers or even spreadsheets is the ability to know exactly where you stand financially in the shortest space of time. And time, after all, is money.
If, for example, you are an investor looking for a buy to let mortgage then you would need to be able to demonstrate to the lender that you are able to keep tight hold of you finances, and know where you are financially at any time. Having the software that can generate the right kind of reports immediately and in a short time is very important, and many packages will do that for you.
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