Accounting systems: what’s available?
Bookkeeping, profit and loss accounts, balance sheets and more
Accounting software has come on in leaps and bounds over recent years. Complex, fiddly systems that required esoteric knowledge to install and run have largely been replaced by easy-to-use, integrated solutions which offer business owners a huge range of options.
Whether you are a sole trader with a side venture or an established businesses with multi-million pound turnover, you should be able to find a solution tailored to your exact needs. The increasing proliferation of cloud-based solutions also means accessing financial information on the go is easier than ever before.
This article should give you an overview of the different functions accounting software can fulfil in your business.
Most accounting software should include at least the following basic features:
- Book-keeping: Almost all packages will have the ability to handle basic in/out cash transactions and produce related information such as balance sheets and profit and loss accounts.
- Invoicing: Accounting software can allow you to easily create and send invoices to customers. Some software will automatically update your ledgers when you get paid, too.
- Tax and VAT: Any accounting software package worth its salt will be able to access the latest tax and VAT information and update you on your obligations accordingly.
Accounting software can be extremely complex and full-featured – the range of functions some packages can carry out is truly staggering. Some advanced features you could look for include:
- Financial analysis: Some packages include a “dashboard” feature, which lets you see essential information about your business on one page. You may also be able to see vital sales and cost information by metrics such as geographical area, salesperson, or supplier.
- Supply chain management: Some software will be able to alert you when product stock runs low, and even automatically order more when this happens, saving you both time and money.
- Payroll: Sometimes offered as a separate module or different software altogether, payroll functionality will enable you to easily manage staff salaries, national insurance, PAYE and more.
- Visualisation: Some packages can convert your financial analysis into different visual formats, such as graphs and pie charts, allowing you to more clearly see how your business has performed over a given period.
- Foreign currencies: If you trade within the EU or internationally, you'll want an accounting software package that can deal with foreign exchange quickly and easily.
- CRM: CRM, or Customer Relationship Management, functionality used to generally come as discrete software but is increasingly being integrated into mainstream accounting packages. It allows you to automate, synchronise and analyse interactions with customers across sales, marketing, customer service, and technical support.
- Multiple companies: Serial entrepreneurs rejoice; you now have a number of options when it comes to mid-range software that allows you to manage accounts across several different companies.
- Accountant collaboration: Some software can allow you and your accountant to work together on your finances in real-time over the internet.
These are just some of the more common advanced features available as part of mainstream packages. Talk to your software reseller about your individual needs – there will almost always be some module that deals with them.
Should I choose cloud-based software?
Most, if not all, accounting software now gives you the option of keeping financial information on the “cloud” – that is, stored on remote servers and generally accessible from anywhere in the world. Whilst this means you can easily access and manage your finances through web, mobile and tablet apps, tread carefully – remember you are essentially trusting a third party with some of your most sensitive business information.
Most mainstream packages have excellent security and use encrypted data to ensure your information is as safe as it can be. However, you should always check whether this is indeed the case. Generally, you should only use cloud-based accounting software from companies which will store your data within the EU, as member states have to adhere to a set of strict data protection guidelines. It's always good practice to research your options thoroughly and check a range of customer reviews before purchasing – you should also discuss it with your accountant before taking the plunge.