Online Accounting

Online Accounting

Imagine a future in which you dealt with your receipts by taking a photo on your phone, or one in which all your business records were available online 24/7.

There are lots of solutions available but how do you know the one you choose is the best, or even that it will be available tomorrow? This online accounting guide walks you through key issues to help you make an informed decision.

 

accounting ledger written longhand in copperplate handwriting
An example of how accounting used to be done, back in the day.

Why would you not want to record receipts with a photograph and have the transaction automatically entered into your accounts? Why would you manually reconcile bank statements when you can have an automatic bank feed to software that recognizes regular transactions and automates their entry?

So whether you are just starting out in business, or your business is growing, and you want to ensure you use a streamlined, efficient tool that saves you more of your hard earned cash, then we urge you to start online accounting straight away.

Choosing the right software

There are a number of cloud accounting software solutions which vary in the range of features, the ease of use and the quality of reporting. In additional some link with a number of external services (like taking card payments and credit control). Here are some of the most used systems…

Accounting Software Ranking 2017 Winners

How do you choose? Here are some things to think about while you are searching:

  • Ease of use – can I find my way round it in an intuitive way
  • Quality of reporting – does it tell me what I need to know easily
  • Cost – usually a monthly subscription
  • Range of features – can it grow with me as I expand
  • Support – who can I talk to when I hit problems
  • Connectivity to other systems – check that you can link with other software
  • What does my accountant use? – why not use what they are expert in?Quickbooks Elite ProAdvisor

It’s always best to talk to users and accounting experts who specialise in setting up new businesses with online accounting software. They are likely to be using several of the different software systems already and know what will work for you.

There are several good systems out there but we have come to prefer QuickBooks online as it has all the features you want, backed by a great range of apps, and all at a reasonable price. What’s more, the company has the resources to continue to develop and improve the software over the long haul.

 

You will also want to know who owes you money and for how long (You can also get apps to automate the debt chasing process – see below). You will certainly want to know which products and services are making you money and which are losing you income.

A good system gives you control over your business so you can make good decisions based on up to date knowledge of the facts.

Add-on useful apps

Once you have chosen your software, you should (if it’s any good!) be able to add on apps that will help you automate credit control, produce fantastic projections, take credit card payments and much, much more. There are loads of apps for QuickBooks Online and Xero who probably have the widest offerings.

receipt not handled efficiently, folded into a plane lying on the grassHandling receipts efficiently

Once you had to take all your receipts back to the office and someone (usually you!) opened the accounting software and typed in the company name and address, amount, VAT amount and how it was paid.

Today you don’t need to do any of that! Take a photo with your smartphone using an app like ReceiptBank. Then click to upload, and their software will recognize all the information above and, when you are back in the office, ask you if you want to enter or amend the entry.

Or, even easier, get your accountant to handle the office function and train the software to recognize transactions and enter them into the right category for your accounts. It really doesn’t get any easier.

Set yourself a daily & weekly routine

So is there a catch? Well, yes … and no! The software will do exactly what it says if it is set up correctly. The weakest link is usually the human software. The data cannot get automatically entered if you don’t take a picture of the receipt. Bank accounts cannot be automatically reconciled if the bank feed isn’t downloaded.

None of the above is remotely difficult if done regularly. If you don’t let the train pull out of the station before you have snapped the ticket receipt, or leave the coffee shop without pulling out your phone, then you’ll be fine! Everything will be there and up to date. However, if the bills pile up then your business reports will be out of date and you will be back to late night sessions with piles of paper!

It’s all a question of creating good habits and establishing a regular routine. Once you’ve done that, everything is easy and you will save lots of time to run your business better.

Picture of an HMRC letterhead mentioning UTR, Tax reference and Employer referenceKeep the taxman at bay!

You will still, of course, have to complete VAT returns, prepare accounts and send tax returns to HMRC. But keeping your records up to date should take the stress out of the statutory reporting. With some help from your accountant (who can work on the accounts while you are still using the software) then reporting to the taxman should be both easier and more prompt.

Choose a great accountant

A great accountant will help you get started, be there to support you through the early days, and then teach you how to use reporting to grow your business. They will be an adviser, trainer and help you to make more profit in a tax-efficient way.

Building a long-term relationship with an experienced accountant will undoubtedly help you enormously. You will want to be sure you get good value, though the cheapest option may not provide that. They should know the software you use incredibly well and, ideally, like us be certified pro-advisers in online accounting.

Ideally, you will want to build this relationship from the very start of your business but, if your current arrangement is not working, then change as soon as you can.

Why not get a FREE consultation to help get your business accounts online

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Hi, I’m Ian Marlow and I lead the team at HFM Let's discuss how you can go digital

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