It’s a numbers game – What your accounting system should do for you.
With Making Tax Digital just around the corner, it’s worth considering if your current accounting system cuts the mustard.
Whether you’re self employed or running several businesses, a decent accounting system will make managing your finances a breeze. The new making tax digital rules will mean that your accounting system must be compatible with HMRC. Whilst many of the major players will be compatible, it’d pay to check ahead of April.
With sophisticated online accounting systems previously only used by larger organisations, smaller businesses are now spoilt for choice when it comes to choosing the right software to suit their needs.
What tools should your accounting software include?
– Cloud Based – You want a system that works whenever and wherever you are, across several devices. This way you can access your accounts on the go.
– Invoicing – An easy to use interface within your invoicing system should allow you to stay on top of issuing invoices, tracking outstanding payments and keep on top of chasing up when needed, helping you to keep on top of your cashflow.
– Expenses – Many of the big players allow you to link your banking directly to your account, making tracking expenses easy. There’s also several systems which allow you to photograph your expenses receipts via an app on your phone. This saves time and removes the fear of lost receipts come the month end.
– Digital – HMRC will accept digital records of invoices and receipts as accurate record keeping. This will save time and shelf space by not having to print out paper copies. Just ensure you back up regularly and your chosen software has a recovery option if the worst happens.
– Reporting – Online accountancy systems certainly provide a benefit that paper bookkeeping can’t. Whilst you might currently use a spreadsheet for basic reporting, accountancy systems do the hard work for you and are easily customisable.
– Payroll – Whilst some companies prefer for their accountant to organise Payroll directly, those with a larger team would benefit from a system which organises monthly payroll.
As we’ve mentioned, check that your current software will allow you to easily submit to HMRC. It’s equally important to check what notice period you may need to give your current provider, should you need to migrate to a new, MTD compatible one.
Correctly managing your business finances ahead of preparing for a sale will be more appealing to potential buyers. Not to mention making the due diligence process much smoother further down the line. If you need advice on how you could improve your record keeping then contact us here.