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The benefits of accounting software for small business

What are the benefits of accounting software for small businesses?
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    One of the biggest bugbears for sole traders and small businesses is keeping track of accounting. If you fit into this category, a cloud-based accounting software package could prove useful.

    At WIS Accountancy, we have experience with a variety of innovative online accounting solutions which could help your business to save time, become more organised and avoid falling foul of tax legislation.

    In this guide, we’ll talk you through the benefits of accounting software for small businesses.

    Why accounting software is essential for SMEs

    As a small business owner, you’re likely to be juggling several different tasks at once. Time should be spent developing ideas and looking at ways for your business to grow as opposed to juggling expenses and receipts. Small business owners could benefit in several ways from using accounting software.

    In addition, there are also legislation changes as part of Making Tax Digital, that will likely require all small businesses to utilise accounting software, and therefore a consideration as to when to switch to an electrical accounting software system should take place.

    With accounting software, you can save time to focus on what matters most to your business: growth, profit and enjoying healthy returns on investment. Here’s just how the right accountancy package could improve things in your company:

    Everything in one place

    With online accounting software, you can easily manage your invoicing, bookkeeping and expenses in one easy-to-use app.

    You can expect to quickly create, send, record and track invoices without having to juggle among several different programs. Keeping track of your expenses can also be done within the same software, and this makes the preparation for your annual Self-Assessment Tax Return much simpler.

    Minimise accounting errors

    In a small business environment, it is all too easy to lose or forget about invoices and receipts. With accounting software, everything is organised and can be quickly reviewed, reprinted or resent if any issues occur.

    Online accounting software can even connect to your business banking using a secure feed, and this makes it even easier to keep track of your accounting. Simply record your transactions automatically without having to worry about forgetting important transactions or invoices.

    Enjoy a better understanding of your company’s financial health

    Regardless of the size of your business, you’ll always want to know exactly how it is performing. With accounting software, you’ll have a minute-by-minute accurate snapshot of your company’s financial health, complete with deep and meaningful insights on profits, losses, tax summaries, expenses and more.

    If you choose a software package with automated reporting, you’ll be able to easily keep an eye on cash flow. This will help you to understand your finances in more detail. If your business is VAT registered, accounting software will also allow you to submit an automated digital VAT return in a few simple clicks.

    Lose the spreadsheets

    If you currently rely on spreadsheets to do your bookkeeping, your job could become much easier with accounting software. Most accounting software has been designed with the user experience in mind, and with a suitable package for your needs, you can say goodbye to confusing formulas, having to manually do the maths on a transaction, or worrying if the data you’ve inputted into a spreadsheet is correct.

    With an automated accounts solution, you could reduce your workload while learning more about the world of accounting on a daily basis.

    Ensure your data is secure

    Cloud-based accounting software is bound by GDPR guidelines. All major accounting software providers use sophisticated data encryption to prevent malicious individuals from accessing your data.

    Information is also backed up remotely, which means in the event of any computer issues or failures, you can relax safe in the knowledge that you won’t lose your data. This is because it is stored and backed up securely in the cloud.

    Collaborate with your accountant or colleagues

    If you already have an accountant, cloud-based online accounting software can help you to work seamlessly with one another. You can upload documents like invoices or important bank transactions, and your accountant can access these remotely.

    Likewise, if your colleagues or employees incur any expenses on the road, these can be uploaded via your accounting software, allowing you to have a clear view of what is being spent.

    Accounting software can ensure compliancy with Making Tax Digital

    Accounting software is required to securely transfer data to HMRC and therefore comply with Making Tax Digital requirements. Read on to find out more about the Government’s Making Tax Digital scheme.

    Currently, individuals and businesses that must complete annual self-assessments for a range of reasons including reporting self-employment income, a COVID-19 Grant or income from property, such as rent, or sales can choose to submit online or via paper forms.

    However, the forthcoming expansion of the MTD, requiring all self-employed individuals and landlords with income in excess of £10,000, to submit returns electronically via MTD process from April 2024.

    How to choose the right accounting software

    You may find it useful to discuss your accounting requirements with the WIS Accountancy team. In the meantime, ask yourself these simple questions prior to committing to an accounting software solution:

    What size is my business?

    Some packages are designed for enterprise-level businesses. Others are more suitable for sole traders and small operations. You should ensure the accounting software you choose meets your needs today, but it should also offer scalability in terms of future growth.

    What features are essential for my business?

    Begin by defining the accounting needs of your business. Next, take a look at what each accounting solution provides, and choose one which has the features you require. For example, if you require collaboration, an online cloud-based service is essential.

    What is your accounting budget?

    Work out how much you can realistically afford to spend on accounting, and choose a solution that fits your budget. Remember to factor in the cost of having an external accountant manage your books if you require this service. If you are unfamiliar with accounting software, we recommend this.

    Can WIS Accountancy recommend a compliant software for MTD?

    WIS Accountancy can assist with any questions regarding selecting and implementing accounting software that is compliant with the Government’s MTD scheme. In addition, we have already partnered with market-leading software providers and use such platforms on a daily basis and are therefore experts in the field.

    Conclusion

    For modern businesses, accounting software is no longer simply a useful tool – it’s an essential part of ensuring your finances are kept under control. With HMRC going increasingly digital, it is vital for businesses to be able to generate tax returns using accounting software.

    If you would like further information on how accounting software could benefit your business or to discuss implementing a collaborative way for our team to manage your accounting, please do not hesitate to contact us today.

    Whether you are a sole trader or operate an SME or limited company, our mission is to help contribute towards making your business a success. For further information, call us on 0203 011 1898 or fill in the contact form.

    Still unsure about what accounting software you should be using? Check out our other blog posts:

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