If you’re looking for bookkeeping software then it’s important that you make the right decision for your business. What works well for one business may not work well for another and this will depend on what it is you do, how much detail you want in your reports and how much time you have to enter the data into the software!
The first thing to think about is why you’re purchasing bookkeeping software in the first place. In our experience it is usually one of the following reasons:
To get regular financial information about the business
To complete your VAT returns
To try and save money (i.e. so you don’t have to pay the accountant to do the bookkeeping!)
Your accountant has recommended it because they use that particular software
If your reasons are either of the first two then you’re buying the software for entirely the right reasons! Good for you!
If it’s the third one then you need to think about whether doing it yourself will really save you any money. Unless you are confident that you have accounted for everything in exactly the right place and all of the bank reconciliations are performed before you hand the information over to the accountant, it’s likely that the accountant will need to make corrections and adjustments to your figures anyway and there will be a cost involved in figuring out your figures, so to speak.
Finally, if it’s the last one then stop right there! Yes, all accountants have their favourite bit of software, but it might not be the right thing for your business. Bear in mind that many accountants receive incentives to sell certain pieces of software too, which may influence their advice to you.
Okay, so now you know why you’re buying it. The next thing to figure out is who is going to enter all the data. Not only is data entry time consuming but if you’re using the financial information that it produces to make decisions or submit returns to HMRC then you need to be confident that whoever is entering the data is going to get it right! We usually find that the following scenarios apply:
You will be hiring a qualified and experienced bookkeeper to do it
Your admin assistant will learn how to do it
Your mum / dad / partner has offered to do it
You are going to enter the data yourself. You don’t know a huge amount about bookkeeping but the software has a support line and it can’t be that hard, can it?!
If you’re going for scenario number one then you get a big thumbs up from us! Just make sure that know how to read a set accounts; you wouldn’t believe the number of cowboy bookkeepers that we have seen with no qualifications who end up making a royal mess of the balance sheet of the business. Just because they can enter data doesn’t mean they know what that data means, stay vigilant!
If you are opting for any of the other scenarios on the list then you need to think very carefully before you go ahead. Unless the person entering the data has a sound knowledge of how to read a set of accounts then we really wouldn’t recommend it. Posting an entry into the wrong place could not only significantly alter the financial information that you’re basing your decisions on; it could result in incorrect submissions to HMRC and even increased accountancy fees at the end of the year if the accountant has to unpick what’s gone wrong.
Finally, you need to look at how much the software you are considering costs. Bookkeeping software can range from free to incredibly expensive. It is very easy to be swayed by the pictures of fancy graphs and pretty reports that some of the software can produce; but think with your head and not your heart! You need something that is easy to use, gets the reports right and provides you with what you need. We’ve known people spend as much on a bit of software (that they never end up using) as it would have cost to hire an accountant to do the work for them!
There are lots of bookkeeping software providers out there nowadays so do shop around. Good places to start are with providers like Sage, Quickbooks and Xero. Many will offer you a free trial so take full advantage of that and see if the software suits you and your business needs.
If all of this information seems a little confusing then you’re not alone! Mazuma was founded for precisely the reason that many people simply don’t have the time to do their own bookkeeping or recognise that it’s sometimes best to let the professionals get on with it and get it right! Check out our list of 8 Reasons Not to Buy Bookkeeping Software; but remember, we are a little bit biased!
Shameless Plug Alert!
Our Purpleforce service offers a monthly bookkeeping service, monthly management accounts and year end accounts and tax returns for a fixed monthly price; so that you can get on with running your business!