Accounting software
An overview of the different ways to keep business accounts
In order to run any business you need to keep accounts or pay someone to do this for you. Keeping accounts is a legal obligation, but keeping good records is vital to run your business effectively. There are many ways of keeping accounts.
Traditionally, accounts were kept on paper with handwritten entries. Many small businesses still use the traditional methods of bookkeeping, often using specially printed books to organise records. However, handwritten accounts can take a significant amount of your business' time and it is easy to make mistakes.
Computing spreadsheets can be set up to keep accounts. They can do the sums for you and update all data in a series of spreadsheets simultaneously. However, designing and maintaining a spreadsheet accounts system can be a significant task. Mistakes made in a spreadsheet may go unnoticed and not get corrected until the end of the year.
Computer based accounts packages can:
- save time by only requiring you to enter information once
- keep track of your business' debtors and creditors
- reduce delays between making a sale and generating an invoice
- automatically calculate VAT
- facilitate more accurate forecasting
- allow you to add payroll modules to calculate pay and produce pay slips
However, a computer accounts package can have some drawbacks:
- The package cost, although small in relation to your other costs, is higher than a paper-based system.
- You may need to purchase yearly maintenance and support for your package.
- An accounts package is designed to suit most types of business. However, if your business is very unusual you may find that you need to change the way you operate to suit the package.
- You will probably need some initial help setting up an accounts package. This will usually be a chargeable service, perhaps obtained from your accountant.
Subjects covered in this guide
- Introduction
- An overview of the different ways to keep business accounts
- Choosing the right accounting package
- Assessing your business' overall needs for an accounts package
- Assessing your detailed requirements for an accounts package
- Prioritising your requirements for an accounts package
- Issues to consider when making your accounts package selection
- Specialised requirements for your accounts package
- Implementing your accounts package
- Here's how accounting software brought efficiency savings to my business
