In a vlog we published a few weeks ago, Making Tax Digital – part 3 we talked about how important accountancy software is going to be when HMRC brings in the new Making Tax Digital System. In this week’s Vlog we go into that in a bit more detail.
There are quite a few different accounting software systems out there, you might have heard of the likes of Sage, which is rather popular and then there are quite a few new comers like Xero, Quickbooks and Clearbooks. A lot of accounting software these days, is cloud based, so instead of installing the software on your computer, you can run it straight from the internet. That’s great because you can use it from any device – whether that’s a computer, laptop, mobile phone or tablet, you can run it from anywhere in the world.
One of the great things about accounting software is that you can give members of staff access to it. But the really good thing about accounting software is, when you use it correctly, it can save you a lot of time and automate quite a large part of your record keeping. For example, in the past people used spreadsheets or ledgers books and they would record every single transaction that went through the business.
Nowadays, you can get accounting software to connect directly to your online banking, download banking information and then you can tell the software what each transaction relates to and what it was for. It gets better, when you tell the software what that bank transaction was it will remember it. Accountancy has really changed a lot.
Let’s say you go to a petrol station one month to fill your car up and you tell your accounting software that it was a motor vehicle expense, the next time you go to that petrol station to fill your car up, the accounting software will recognise the bank statement transaction reference and it will know automatically that it was for a motor vehicle expense. This great when you consider that 80-90% of transactions in your business are repeating.
One of the other good things about accounting software is that it can connect up to a lot of other types of software. A lot of businesses have CRM’s, Client Relationship Management Systems, where they record information about their clients, suppliers or anyone else they come into contact with. Instead of having to transfer information manually or create invoices in one system and recreate them in another system, you can actually get those systems to link up now. You can also get valuable information from your accounting software.
A lot of accounting software will give you reports like VAT returns or a profit and loss return and these reports will give you an idea of how much profit you have made or how much tax you have to pay, usually months in advance of your accountant doing your tax work.
So, if you are interested in finding a bit more about what accounting software can do for you and if you need someone to show you how to get the best out of it, please get in touch and we will be happy to help.
At Northants Accounting we are an experienced team of accountants, specialising in adapting to the changes in our client’s businesses and having such a proactive approach to our work means that we are the ideal business for small companies that are doing something exciting in their sector and are looking for advice and expert help.