If your business is VAT registered, and/or a limited company, there are legal requirements as to the records that must be kept. Spreadsheets can handle these requirements in a simple and straightforward manner, and it maybe that if you don't need any additional info about the financial affairs of the business, you need look no further.
BUT, and its a big but, if you want additional information, such as that listed below, really you need to be considering software:
- Profitability!
- Debtors reports (ie reports detailing customers owing you money)
- Creditors reports (the same, but detailing those to whom you owe money)
- Cash flow information
- Sales information (ie which products sold what, when)
- Stock control
- Costing information (ie how much was spent on say advertising last month)
- Automated invoicing and statement generation
- Project and time costing
- Customer database
- VAT reports
- Snapshot financial reporting data
For small businesses, the choices of packages are typically split between those covering bookkeeping (and therefore data entry only), and reporting, covering bookkeeping, everything above and a lot more besides.
The cheapest bookkeeping packages (think Cashflow manager and Do$h for example) will do VAT returns and produce basic profit and loss information. Don't ask them to do much more than that though. We think there are much better options out there, even for the non accountants.
If you've established you need software, and are looking at something that will be of value to you as well as your accountant, then really you are looking at a piece of full accounting software. What package to go for? Clients often come in having heard about Sage or Quickbooks, and it is true that these firms have been the market leaders in the UK for some time.
Here is our view on the current round up of full packages we regulalry encounter:
Sage Instant £115+vat - this just makes the list, it is simple and fairly cheap, but does have the likely functionality a simple, small business will need. Tech support is extra mind you after a year, as is training. We don't generally recommend it as non-accountants tell us they find it less intuitive to use. Its also software in the traditional sense, meaning it is one license installed on one pc.
Sage line 50 £550+vat - for small/medium sized businesses, with high volumes of transactions, and needing solid financial reporting, this is the definite article as they say. Reporting is excellent, but the programme is complex. Unfortunately it is expensive, and tech support will cost more still. Sage line 50 will push the abilities of the non-accountant, so be prepared for training on top (or to pay a bookkeeper to come in). Sage also have a nasty habit of charging for annual updates...........
Quickbooks - various editions from £90 to £450 +vat - some clients swear by Quickbooks software, it is certainly better designed for the non-accountant user, and also good with dealing with higher volume of transactions (as Sage). It achieves very similar functionality to sage, in an easier to use way. Again like sage, its installed on a pc or laptop, so unless you carry the pc round with you, thats the only place you can access your financials. Your accountants may well be less keen on Quickbooks but thats another story.......
VT Transaction+ £125+vat - I would describe this as a 'rough diamond' - VT has a basic company website, the package manages basic reporting only and is cheap as chips, but don't be deceived! Underneath the budget exterior lies a great piece of software, especially when your business is heavy on the transaction side. Its very easy and quick to enter data, easy to correct mistakes and easy to reconcile the bank. Its our choice over the sage and Quickbook alternatives EXCEPT if you want it to talk to your website, which it can't, yet.
Kashflow £15.99+vat per month direct (or see our offer below) - this is by far the best of the new breed of 'in the cloud' programmes. 'In the Cloud' refers to the fact that the software is internet based, so can be accessed from wherever you happen to be, and via pc, laptop or even mobile phone. The other big advantage to this is that your accountant can login to your records for the occasional check-up without doing the whole transfer of data routine malarky! Functionality is great for the smaller business, including great invoicing options and reporting. It fairs less well for the high volume of tansactions business (simply because its internet based). Otherwise we think its the first and only choice, and if you've never used accounting software before, we think you'll be amazed by its ease of use.
I did mention that we are running a Kashflow offer - currently we have a 60 day trial on our TaxAssist version, AND are selling it at the discounted rate of £149+vat for the year, AND will even chuck in 2 hours one on one training for purchasers who also appoint us as their accountants. We like the product so much we use it in house too for our own books, need we say more?
This article will hopefully emphasise the fact that there is no one size fits all when it comes to software. So if your accountant insists on your use of one program its probably because its in his interests rather than yours!
Ultimately we'll work with whichever software is right for each client.
