Accounting is an essential function for any business. As a business owner you know that accurate and regular financial information is imperative for monitoring business performance and to enable good decision making. Fortunately you can pay an accountant to prepare this information for you but it all starts with well-managed, accurate bookkeeping, and that part is down to you.
The Bother of Bookkeeping
In the past, bookkeeping meant keeping paper records of everything that a business spent (purchases and expenses), everything that it sold and revenue received from those sales, and then recording it all in some sort of hand written log. Then in more recent times, many businesses have periodically input their paper records onto their business’s computer system but retained hard copies just in case the computer system crashed and all records were lost or HMRC requested to see original documents. Both methods are considered time consuming and labour intensive, they require storage space for hard copy archives and hard drive storage for accounting software backups if the business’s computer system is being used for bookkeeping data. But with bookkeeping being such an important part of a business’s housekeeping, is there a way of minimising the bother of bookkeeping without cutting corners?
Yes there is. The solution is online bookkeeping. Read on to find out why it revolutionises the bookkeeping process for small businesses.
Advantages of online bookkeeping
- Paperless online storage – Online bookkeeping systems store all of your business transactions and data on an online storage system called the Cloud. This means that you can de-clutter your desk and filing cabinets of hard copy records without needing to worry about losing the information if your computer system crashes. In addition, the electronic copies of your documents that are held in this online storage system are acceptable to HMRC which means that you no longer need to keep archives of paper records for six years in case they should request to see them, thus saving you space and possibly even storage costs.
- Reduces your accountancy fees and frees up your accountants time to add more value to your business – Accountants use computer software to help prepare your accounts. Online bookkeeping will reduce your accountancy fees because your accountant will no longer need to spend their time entering your bookkeeping data into their system before they can use it to prepare your financial information. This will enable them to spend more time on the ways in which they can add value to your business, namely saving you tax and increasing your profit.
- More timely and accurate information and advice – Accountants will have live access to your records enabling them to give you more timely and accurate information and advice.
- Business records up to date for HMRC – Online bookkeeping enables you to keep your records up to date helping you to avoid the hefty fines imposed by HMRC should you fail one of their business record checks.
- Access to your records anytime anywhere – Having your records online means that you can have access to them whenever and wherever you like; providing you have an available internet connection and your secure login details, your bookkeeping records will always be at your fingertips via the Cloud. There are now phone apps available for most bookkeeping software, so you can bookkeep on the go!
- User Friendly and time efficient– Online bookkeeping software is designed to be user friendly. Accounts can be kept up to date with a few regular data entries and if you use online banking then information from bank statements can be automatically uploaded and processed into the correct categories saving you increasing amounts of time as your business grows.
- Technical support – Most providers of online bookkeeping software offer technical support to help you get started or to overcome any issues you may have on an on-going basis.
Recommended Online Bookkeeping Software
To finish this article we thought it would be useful to share some examples of some of the software available on the market, which we would recommend. The following all have free trial periods, so you can take them for a test drive and see which you prefer.
- Xero
- Sage one
- Kashflow
In addition to the above there is also the Trinity Online Portal, our own online bookkeeping software, which is free for all our clients to use.
We hope that this article has been interesting and informative. If you have any questions or would like to discuss online bookkeeping for your business or the accountancy services we offer with a Free consultation, please contact Sam on 02475 185286 or complete our online form.
