One of the first things an entrepreneur will look at (usually) before they decide to start their own business is how much money they are going to make. No business plan is complete without a projected yearly cashflow, and a breakdown of expected income and expenses. Working all of this out in the beginning to see where you stand is fair enough, but in reality it is extremely unlikely that any small business’s income and outgoings will entirely match their finanancial projections to the penny. And also, with business ownership comes responsibility, and the necessity to report the business earnings to the tax man. Keeping up with the accounting might seem like a daunting task for many, especially those who aren’t numerically gifted. The temptation to hire an accountant can be all too strong. But of course in a start-up, the common goal is often to save money wherever possible, and accountants cost money. However, doing the accounts yourself doesn’t cost a penny. Here’s how.
Online Accounting Software for Small Business
Gone are the days when accounting software cost hundreds and was only to be enjoyed by large corporations with larger computer systems to install it on. Any accounting software company worth its salt now offers access to their software online alleviating the need for driver and installation disks and regular updates. Online acccounting software is actually much more secure than old fashioned accountancy programmes. Not only is all of the information backed up in real time, but data is also guaranteed to be secure as no large software company would compromise the security of their servers if they can even help it.
One major advantage of using online accounting software is that it can be accessed from any computer provided you know your own log in details. This means that if you hate accounting and don’t want to be stuck in the office crunching numbers, you can enjoy balancing the books from the comfort of your own home with slippers, biscuits and Radio 2. Some of the free accounting software available is so easy to use, (and almost enjoyable, if you like that sort of thing) that you can manage your accounts sat in front of the TV.
Another benefit of accounting online is that access to the account can be shared with trusted colleagues. There’s no need to have a licence for each computer, just create a log in with access to view the accounts or if you really trust them to makle updates. Your small business book keeping can be a team effort and there’s no worry that if someone is on holiday or sick there’s no access. It’s not uncommon for 3rd party accountants to take a break in the Cayman Isles for a month rendering your company books inaccessible and leaving your invoices unpaid; this won’t happen if you have accounting software that can be accessed from anywhere!
By using a good quality online accounting system, you will be giving yourself access to reports as and when you need them at the click of a button. So many of the software programmes have built in reporting systems that can show you graphs, pie charts, how much you spent on loo roll and how much money you had last November within seconds of your request. Imagine asking your old school accountant to flick through your books as you pay him by the hour…
Finding the Balance
Whilst there doesn’t seem to be a need to employ an expensive accountant anymore for day to day book keeping, reporting and cash flow predictions, don’t discount them completely. It’s always useful to have a contact in case your accounts and income grow unexpectedly and become too large to manage, and of course it’s always nice to have a hand with the tax return at the end of the fiscal year. Use your accounting software to get everything in order, and if you do ever need help from an accountant all your information will be so easy to find that you’ll cut their consultation time in half.