How to Choose Accounting Software
Any business owner will tell you that accounting is the most difficult and most boring part of their job. It’s also one that they can’t avoid or overlook. A big part of doing this work is choosing the right tools since that will make it easier on you.
Choosing accounting software should be the first step towards that goal. The software should be chosen to accommodate your current needs, to be compliant with the rules set by HMRC, but also to meet your needs as your company grows.
What are your accounting skills?
It’s important to take into account what your accounting skills are before you make a choice in terms of software. There are solutions made to take you by the hand and guide you through the process. They are also not well suited to complicated accounting tasks.
If your accounting skills are limited or you have none at all, you’ll need to look for the software that can help you out. However, have in mind that you can learn by doing and that you might end up growing beyond your current software solution as time goes by.
As is the case with any other purchase, you need to consider how much you’re able and willing to spend before you make the purchase. It’s a tool you’ll need to use, but you should still remain firmly within the budget you’ve set for yourself. If you need to borrow money to set up such a system, you should do it.
Have in mind that there are other expenses beyond simply buying the software you need. Beyond that, you’ll need to set aside the money for maintaining it, and also for training your employees to use it.
Keeping data safe
Accountants need to keep a lot of different documents in their archives for quite a long time. This is a legal requirement since these documents could be obtained by the government during an audit, and there are penalties if you don’t have the documents at your disposal. Keeping the documents within software makes this easier on you.
You’ll need to set up the system for storing the data. It’s not always needed to have your own servers, but if you’re not sure about the servers provided by others, then this is the best way to go. This is only the option for large companies.
HR tasks are very much related to those of taxation. Employees pay their taxes at the source via a system called Pay as You Earn (PAYE). This is an effect done by the employer, and the employee receives their salary minus the taxes paid on it.
Since this presents a direct and often used link between the company and those who work for it, it can also be used to complete other HR-related tasks as well. Trying to integrate as many processes as possible – will make your management efforts, more effective and less costly.
There are numerous add-ons you can use to make your tax software better, more advanced and more comprehensive. These are mostly about analytics that will allow you to get a better grasp of how your finances are doing and where they can be improved.
Small companies aren’t always able to buy these as well. That doesn’t mean you should give up on them all together because you might be able to use these resources latter on and thus use them when they are needed the most – when your company grows.
The software used in this case is just a tool, and the main work is still about the people who use it. The accountants and bookkeepers are the ones who carry on the bulk of the work in this case, and they should be consulted when you choose the software.
The main area in which accountants could help is how the employees would interact with the software. This is where most friction comes about. If it takes the employees too long to learn how to use the software, it won’t be worth to install it. This is where the accountant could help you make the call.
Choosing accounting software is an important and long term task for a small business. One of the biggest expenses you have will be taxation, and you need to use all the tools that can help you handle it with ease. There are a lot of options when it comes to software, and you can always change your mind.
The software ends to keep your data safe, and it needs to have additions that will help you keep track of your finances and complete other HR tasks together with the taxation. It also needs to be useable by your employees.