We live in a digital world, so it shouldn’t come as any surprise that accounting software is taking steps into the digital arena. The introduction of Making Tax Digital in April 2019 means that any VAT-registered business with a taxable turnover over the VAT threshold is now required to keep digital records and use software to submit their VAT returns. But even sole traders can benefit from using a digital accounting package. Here is our quick beginners guide to cloud software, what to look for and why you should be a convert!
What is it?
Accounting systems have progressed from physical ledgers through to software loaded onto a computer’s hard drive. But even these advances leave you at risk, whether from user error – hands up who’s accidentally deleted a file! Or from your computer failing you at the wrong moment. Cloud-based accounting software packages enable you to store and access your data over the Internet, also bringing the advantages of remote access wherever and whenever you want it.
At heart, the functionality of the software remains the same but the security, accessibility and reliability, jump up to the next level.
Why should I use it?
By 2020 it is predicted that 72% of small businesses will rely on cloud technology.
Cloud technology is becoming entrenched in our daily lives – your photos might automatically back up online, or you might use an online file storage system such as Dropbox, Google Drive or iCloud. Then taking the next step to cloud-based accountancy should be a no brainer.
The are multiple benefits of moving to a cloud-based package ranging from the ability to view real-time data, accessing your data anywhere from your tablet to your laptop to your mobile phone. Cloud-based systems often come with robust technical support, and sometimes active online communities which provide 24/7 peer-to-peer support and advice.
Cloud-based software can also help save you time by enabling you to automate some processes, such as invoices. Once you’ve entered the initial details, the software will generate invoices and reminders keeping track of your customer’s payment status and removing a task from yourself or your employees.
In my professional opinion, the biggest win is the potential to collaborate. Now, this could be with your business partner, you could grant limited access to your employees, or you could share the full details with your accountant. Once you’ve embraced cloud-based accountancy tracking your receipts, expenses, and income immediately will become second nature. Come tax return time you’ll thank your past self for moving to a cloud-based system!
What should I look for in a software package?
Hopefully, by now I’ve sold the benefits of moving to a cloud-based accountancy software package to you! Now you need to choose one. Here are my quick pointers to get you started:
- Look at your business, it’s needs and your accounting requirements. Does your business turnover £90,000 or £900,000? The industry that you operate in may also influence what software you choose.
- Define your budget! This is an area where costs can escalate quickly, determine what you can afford to spend and keep that in mind.
- Add-ons may sound attractive but weigh up whether you will use them or if they are a bit of a gimmick.
- Ask an expert! Your accountant will have experience in different software packages and will be able to help you make an informed decision that’s right for your business.
Blue Fusion Business Services can support you with your accountancy and
Get in touch today to see how we can help you.