Tech Tools For Business Growth – Part 6

Tech tools can assist your business in streamlining processes, enhancing communication, improving sales and much more.

Use our blog series to understand the advantages and disadvantages of tech tools for business growth.

Part 6: Accounting Software

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Accounting software automates financial transactions, including accounts payable, accounts receivable, payroll, purchase orders, billing and general ledger.

Advantages

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– allows comprehensive, real-time analysis of cash flow and expense management

– ensures invoices are sent out and paid on time

– helps with cash flow forecasting

– reduces operational expenses by bringing accounting functions in-house

– improves process efficiency

– allows business monitoring from anywhere on any device if cloud-based

– reduces time spent on manual data input and human errors

– easier tax compliance using accounts information stored in the system

Disadvantages

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– time to understand the software and train of staff

– accuracy of data input is crucial to the effectiveness of the system

– cost of software although should be mitigated by efficiency savings

Features

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Accounts Payable (amounts due to suppliers/trade creditors) – automates invoice capture, approval, and authorisation. Transactions are displayed in accounts payable and general ledger tables.

Accounts Receivable (amounts due from customers/trade debtors) – tracks customer purchases and payments. Transactions are displayed in accounts receivable and general ledger tables.

Bank Reconciliations – matches ‘credits’ and ‘debits’ to find discrepancies and missing entries.

Financial Reporting – provides graphs of accounting data, such as sales, accounts payable/receivable, and cashflow.

General Ledger – summarises accounts payable and receivable in a table, plus assets, expenses and revenues for each.

Billing and Invoicing – creates and sends invoices from customer records, automatically updates the system.

Expense Tracking – records expenses incurred, often allows submission by uploading bills from a mobile app.

Project Accounting – tracks costs, expenses, billable hours and payments per client project.

For a straightforward guide to accounting terms see https://www.clearbooks.co.uk/blog/accounting-terms-glossary/

Considerations

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Purpose

What do you need the software to do? For example, send invoices, update inventory, income and expense tracking, cashflow reporting, payroll. 

How many invoices will you send per month, how many bank transactions, how many users? 

What functions will save time on employee management and customer relations? Perhaps annual leave and time tracking, quote generation, credit control and easy payment options?

Evaluate each stage of your sales process, from purchase order to bank deposit, to see where software can improve efficiency.

Integration

Consider how the accounting software will integrate with existing processes and software applications.

This might include your point-of-sale system instantly updating the accounting sales and inventory, or customer invoices and payments posted directly to your CRM.

Consult with your accountant, to ensure they are proficient and happy with your choice, and it complies with Making Tax Digital requirements to submit VAT returns online (see making-tax-digital).

If you give your accountant year-round access, ensure there are online or cloud-based capabilities.

Most products offer demos and free trials, use these to check how intuitive the interface is, and how well it fits with your work habits and task flow.

Check the product training and tech support available, and the product’s scalability – good software should grow with you.

Cost

Most products are priced on a ‘per user, per month’ basis. Additional features such as multi-currency billing, sales quotes, purchase order management, and recurring invoicing increase cost.

Data Security

OCR (optical character recognition) technology allows documents to be scanned and stored in digital format.

Ensure your accounting software keeps sensitive client and financial information secure, and adheres to security standards such as Extended Validation (EV) SSL and 256-bit Encryption.

Check how data is backed up and kept safe, and how easy it is to recover files if systems are damaged.

Accounting software can be delivered through the cloud, with software-as-a-service offerings; or installed on site. 

If storing accounting data in-house, ensure your security and servers are fit-for-purpose.

For further information see https://www.capterra.com/accounting-software/#buyers-guide

Examples

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Accounting software to consider, as reviewed by Capterra, Tech Radar, and Accountancy Age:

1. Wave

Easy and intuitive, sync expenses, remote access, backed up, unlimited bank and credit card connections, unlimited income and expense tracking, month-to-month or year-to-year comparison reports.

OCR (optical character recognition), 256-bit encryption, PCI Level-1 certified for handling credit card and bank account information.

Accountant-friendly double-entry accounting software.

Integration with PayPal, Shoeboxed, and Etsy, instant updates for invoicing, payroll and payments data, foreign currency payments, run multiple businesses in one account.

2. FreshBooks

Tailored for SMEs, user-friendly interface, cloud-based.

Many features including invoicing, expense tracking, time tracking, business reports, import expenses from your bank account, and automatically send payment reminders. 

Generate invoices for customers at point-of-sale with phone-and-tablet functionality, bill in any currency, save time by setting up recurring invoices, and accept credit card payment.

Integration with many services, including PayPal, MailChimp, Basecamp, WordPress, Zendesk.

3. Intuit QuickBooks

Well-featured, easy-to-use cloud-based invoicing, expense tracking, payment handling, VAT tracking and calculation, payroll and pension management.

Inventory management, Shopify integration, job scheduling, CRM, Direct Debit payments, mobile apps, generate invoices, incorporate existing Excel spreadsheets.

Direct links to HMRC for VAT returns.

4. Xero

Affordable plan with limitations on number of invoices sent and bank reconciliations. Excellent mobile apps, but maximised over computer browser.

User-friendly interface, cloud-based back-up, connects directly to bank accounts for reconciliations.

Expense Tracking, many reports, multiple users, high functionality.

5. Sage Business Cloud Accounting

Easy-to-use, impressive customer support, cloud-based SaaS.

Manage quotes, invoices, submit VAT online, smart bank reconciliation, cash flow forecasting, some detailed reports, multiple currency support, project tracking, desktop or mobile app.

Credit card payment acceptance, expenses and sales  monitoring sales. 

6. Kashoo

Credit card acceptance, extensive customer support.

7. Zoho Books

Simple solution, essential features, scalable, invoice generation, expense tracking, automated banking, reporting, inventory listing, quotes, project analysis, tax preparation, mobile apps.

8.Kashflow

Cloud-based bookkeeping, quotes, invoices, payroll, VAT submission and HR, receipt digitisation, compliance management.

Remote access, good support, mileage tracking, recurring purchases, mobile expenses and receipts, automatic invoicing and reminders.

9. FreeAgent

Small business software, HMRC compliant for Self-Assessment and VAT, invoice raising and chasing, revenue and expense capture, mobile, bank feeds.

10. 1tapreceipts

Affordable bookkeeping software for sole traders, track spending, HMRC compliant, pricing depends on number of ‘scans’ per year (receipt imports inserted into HMRC expense categorisation and stored for tax return), mobile use.

For full reviews and further information see:

View at Medium.com

View at Medium.com

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