It was once commonly accepted that if you were a small business and needed some accounting software there was a simple choice between splashing out on Sage or QuickBooks. But the reign of these leading names is being challenged by a new generation of web-based software like MoneyPenny. Accounting software might sound dull, unless you are an accountant, but it will allow you to keep track of your business’ cash flow, invoices, profit and loss, tax and even VAT in some instances.
While many people feel comfortable conducting their own business finances, others might want professional advice, especially when it comes to their tax bill, either because they don’t have the time, want to make even smarter financial choices, or lack confidence. Lots of freelancers or small businesses find themselves somewhere in the middle, and pay for professional advice as and when they need it.
Types of accounting products available
The range of accounting software products available for small and mid-sized businesses has been growing steadily. Right now, there are a few general categories to choose from: small business payroll and accounting packages, more full-service business management programs, online Web-hosted applications, and free programs.
Tip 1 – Understand Your Accounting Needs
The first step you need to take in choosing accounting software for your business is to undertake a good needs analysis, which will address both managerial and financial needs. It should be broad, exploring both obvious questions and ones that really make you think. Take your time with this important step, since the last thing you want is to have to repeat this process within the next two years. If you experience unexpected growth that forces an upgrade, terrific, but good planning at this stage can help you avoid having to change software too soon. Get some help before you buy anything.
Tip 2 – What you need to know about your business
The first step you need to take before deciding on accounting software is to make sure that you are somewhat financially literate. There are several ways that an entrepreneur or small business executive can become proficient in understanding what data their business needs to keep and what reports they need to generate. You can read books. You can take classes. You can do research on the Internet.
Tip 3 – Talk to your accountant and staff
If your business has an accountant – either an outside consultant or an in-house accountant — you would be wise to consult that expert before you take the plunge into accounting software. Your accountant may be able to recommend software that works with programs they have.
MoneyPenny: Good for freelancers or contractors
Geared towards a small business owner or freelancer with not much accounting experience, MoneyPenny is seriously easy to use and has developed a firm following. It uses simple headings and lets you organise performance overview reports.
MoneyPenny is probably best suited to freelancers or contractors. It allows you to organise your expenses and outgoings or income by project and provides an overview of each, to help you keep on top of how each one is doing separately.
One of the major draws is the multi-user options and time tracking feature, which makes it very easy for you to manage remote workers or freelancers. Each user can log in and input information on their own timesheets. This is then displayed as an overview of the entire project for the manager or business owner.
Another handy tool is a one-click report that creates a self-assessment summary for income tax, which you can copy to your tax return.
Invoices can be easily created and sent by PDF and email. Plus, you can create payment reminders at set dates after invoice due dates.
Make your business accounting software decision
Now it’s up to you. The journey ends here. You’ve talked to many people, inside your organization and out, and you’ve read vendor literature and third-party reviews. You have used a few of the programs, or a least had a tour of the screens. So what is the deciding factor? That’s up to you. Prioritize your needs analysis and make sure the software you choose meets most, if not all, of the features that are important to you. There is no ‘best’ business accounting software package, but there is one that’s best for your business.