What's in it for me?
By Clare Kendall, Business Owner & Bookkeeper, CLK Books
There's a lot of talk about how businesses will need accounting software to meet the compliance requirements of making tax digital. (For information on the requirements for Making Tax Digital for income Tax Self Assessment have a look here: 28/09/21 Updated Upcoming Changes to Self Assessment)
Most accounting software comes with a monthly fee so I really want to explain what the benefits are on top of meeting that compliance need.
For your sales and other income
Digital Invoicing: The software helps you invoice using a template. You type in your customer's details, how much money you're charging them and the invoice is generated complete with your business details, logo and payment instructions. It can be sent by email or you can choose to print them or export them to email yourself.
Quotes and Invoicing on the move: You can do all of this on the move using the mobile app. You can leave somebody's house and send their quote before driving away. You can finish the job and send the invoice straight away, meaning there's no additional admin time needed back at the office or at home. (If you're currently invoicing on evenings and weekends, accounting software has the potential to give you a lot of free time back)
Integrated payment services: The software can be integrated with a payment service, so as your invoice has a link allowing the customer to pay online. The money can literally be in your account before you have got home.
Track unpaid invoices: You can instantly see in your software which invoices have and have not been paid. There's no need to go back through invoices, checking against bank statements. Your software will show you which invoices are paid, unpaid and overdue.
Automatically chase overdue: Better than that, you can set your software to automatically chase up any invoice that becomes overdue. You set the schedule e.g. three days or a week after the due date, and the system will send a reminder to the customer to say that they haven't yet paid.
Automate regular invoices: Regular invoices can also be automated. The software will create weekly or monthly invoices automatically for you. If your invoice is for a fixed price, the software can create and send it. You can literally send your month's invoices whilst asleep!
For all expenses and overheads
Digital Storage: You can store all of your receipts and invoices securely and digitally in the software. There's no need to keep the paper and they are quick and easy to find, linked to the correct transaction should you ever need them in the future. There's no need to take paperwork to your bookkeeper or accountant - you just give them access to the software and they can see all the digital paperwork.
Apps: You can do nearly all of this through the mobile phone app. If you can use a smartphone, mostly it's as simple as taking a photo of your receipt. If you can work a smartphone I guarantee you can use these apps. You can also email receipts and upload them using the web version of the software.
Bank feed: By linking your bank account to the software, your bank statement lines feed in sometime between real time and 48 hours later, depending on the bank and software you use. It is safe and secure, and means your receipts can then be linked up to your bank transactions so as the expenses are categorised straight into your accounts.
Here's the really clever part. When your accounts are up to date, you have got a real time view on what is happening in your business.
You can see how much profit you have made. You can start to ask, "How much have I made this year?" and "How many sales have I made this week?". If you can think of the question, you can ask the software.
You can start to make comparisons; looking at profit, sales or expenses compared to last month, last week, last quarter or last year. This can aid the real time decision making in your business. You don't want to wait until after the year end to learn you spent too much on materials. With software you can see this in time to make a change before you lose money over a long period.
I am often asked which software is the best. There's a lot of different software out there and there is no single answer to that question. It really depends on a lot of factors such as the size of your business, what information you need to record, what functions you need to do and how much you want to pay. Some software is free if your business banking is with certain banks, some is free to all but limited on functionality.
If you are wondering which software would work best for you or want to see demonstrations, you need to get in touch with somebody like myself, who can discuss that with you and help you make the best choice.
Thanks for reading, Clare