Bookkeeping software will make your life a lot easier by ending the frantic search for paperwork when the annual tax returns need to be done. You’ll need to consider your business’ needs and budget when deciding and look for software that’s easy to understand and perfect for filing your tax returns.
To make your search a little easier, here’s how to find the perfect small business bookkeeping software.
Things to Think About When Choosing
Your Business’ Needs
Make a list of exactly what you need bookkeeping software for and keep it in mind when shopping around. There’s no point investing in a state-of-the-art program that does hundreds of amazing things that your business will never need.
What kind of business do you run? Different companies require different financial requirements. You might need a system that can create reports based on stock levels or VAT modules that can deal with cash on sales.
A cheap and cheerful option might not have some of the features your business needs when it comes to bookkeeping. At the same time, the most expensive software isn’t necessarily going to be the right one for you.
Many app-based options offer subscription tiers so you can choose the level that has all of the features you need, without paying for things that you’ll probably never use.
Is It Safe and Secure?
You’ll be using this software to carry out important financial submissions and tracking your business’ incomings and outgoings. Because it’s a web or phone app, it needs to value security and keep your sensitive information safe.
Simple features like backup and restores mean that you’ll never have to worry about losing data and passcode locks keep unwanted eyes from accessing your important business information.
Which Features Does the Software Need to Have?
Basic Bookkeeping Features
Before worrying about fancy extras and exciting features, it’s important the software you choose can handle the basics of bookkeeping. The app needs to be easy to use and intuitive as the last thing you want to be worrying about is complicated software.
When comparing software, look out for features that you’ll use the most often, like expense management, report generation and standard tracking so you can see exactly how your small business is performing.
Tax Return Preparation
With Making Tax Digital coming into effect in April 2019, the bookkeeping software you choose should allow you to easily submit digital tax returns. It will replace any paper-based system you already use, reducing mistakes and allowing you to access real-time tax information.
You’ll wonder how you ever managed without features like automatic tax calculations, tax reporting and calendar reminders that let you know when important deadlines are fast approaching.
Some bookkeeping apps are packed with confusing jargon. They’re frustrating to use and easy to make mistakes with because you don’t understand exactly what it is you’re doing. With things as important as tax returns and bank accounts, you need software that uses concise and clear language.
Simply by looking at the software’s website, you should be able to get an idea of the language they use. If you need an accounting degree just to understand half the terms they’re using, it’s probably not the one for you.
So that you’re never confused by some of the bookkeeping or accounting terms you might come across, make sure to bookmark our handy glossary.
Bank Statement Management
When it comes to filing tax returns and tracking business performance, you need software that can manage your bank statements. This is because they need to be reconciled to see if there are any missing or incorrect transactions that have taken place. Errors like these can cause problems further down the line and need to be ironed out quickly and effectively.
Some apps also offer consolidation features that allow you to consolidate all of your business’ income and expenditure for that year by using the Profit and Loss report.
Comparing Different Bookkeeping Software
To help you choose the right software to suit your business, make sure to follow these simple steps.
1. Have a free trial.
Most apps and software options will give you the option of having a free trial. It gives you the chance to get to grips with the app and see how it feels. See if it’s able to carry out all of the tasks you’ll need it to do and whether or not you enjoy using it.
2. Check out online reviews.
Thousands of other businesses will have used the software you’re looking at and left online reviews. Look at online review sites, rather than the app’s own site, to get a balanced look at how other customers have rated them.
3. Talk to the app providers.
Speak to the software providers themselves and ask them any questions you might have about functionality, features or integrations. It’s an opportunity to see what their plans are for the app and if they aim to add more features in the future.
4. Check to see if they have technical support.
It’s important to know beforehand whether or not they have expert support on hand to help with any issues you might be having. Do they have a troubleshooting number you can contact if you’re having problems or are you on your own?
Why You Need Software That’s Ready for Making Tax Digital
One of the key features you need to look for in bookkeeping software is the ability to easily carry out digital tax returns. That’s because Making Tax Digital begins in April 2019 and you need to be prepared.
To find out more about Making Tax Digital and what it means for your small business, make sure to download our free summary sheet using the link below.