What can computerised bookkeeping do for me?

Accounting software gives small business owners the tools to manage and use their own books for the first time. It also provides business owners with a clearer picture of how their business is performing, at the touch of a button...

 

Most bookkeeping software packages allow you to:

• Control your business finances and cash flow
• Manage VAT, tax and NI (many packages allow you to complete your VAT return in just a few minutes)
• Easily produce your annual accounts and end of year reports
• Know which products and customers make you the largest profits
• Manage and record your stock levels
• Keep accurate records of your customers and suppliers
• Identify consistent late payers and reduce the risk of bad debts
• Run your payroll with confidence and ease
• Track your credit card payments and record your cash sales
• Automatically reconcile your books with your online bank accounts.

 

How do they do it?

Bookkeeping programs do all the complex calculations using the basic information you type in. You can check balances, produce balance sheets, print cash flow forecasts, analyse payment patterns and carry out a host of other financial management tasks.

Many software packages can store information on other aspects of the business such as payroll, stock management, invoicing, banking, customer accounts and credit management.

 

Who is it suitable for?

Bookkeeping software is particularly appropriate for any business that wants to:

• have more control over their finances, while saving money and freeing up more time
• make financial projections and produce in-depth reports on their business performance
• use their accountant more cost-effectively.

 

Advantages of using bookkeeping software

• Bookkeeping can be complex and a manually created double-entry ledger can be unfathomable to the lay person. Computers have changed all that and to use accountancy software, you don’t have to be a financial expert. 

• A real benefit of computerised bookkeeping is the ability to instantly compile records for whichever period of time you specify. These range from profit and loss accounts to balance sheets presented in a way that those who regularly inspect a firm’s books (such as accountants and auditors) recognise.

• Proper forward planning is critical to the success of any business and the software will assist with preparing budgets and forecasts.

• Securing funding is made easier. All lenders will expect to see up-to-date and accurate books before releasing funds, and the software can produce the necessary reports quickly and professionally.

• With information on who owes you money and when they should pay, and when you need to pay your suppliers, you can manage the credit that you give and receive more efficiently.

• Bookkeeping software can help you plan your cash flow, and stay ahead of forthcoming financial commitments by being aware of when bills need to be paid and when monies are due to come in.

• Avoiding financial penalties. You are legally obliged to maintain proper records and can be fined for failing to do so. It’s advisable to stay on top of how much needs to be paid to HM Revenue and Customs to avoid having to pay fines for late payment.

• Controlling your stock is made easier. Many businesses waste money buying surplus amounts of stock simply because they are not aware of how much stock they have, how much they need and what their minimum levels are.

 

Disadvantages of using bookkeeping software

• The main drawback is that, like any computer program, it relies on the user entering accurate, up-to-date and correct information. Put wrong data in, or forget to keep it up to date, and you won’t be able to rely on the information it produces.

• Care needs to be taken when considering the cut-off dates for reports in relation to accrual and pre-payment analysis.

 

Suggestions from a small business

Wanting to start a company that reflects the commitment faced by UK water-sports enthusiasts in the harsh English winters, Tom Kay formed Finisterre in 2002. Initially there was a large cash flow deficit, but help was received from the Prince’s Trust. After that, getting the product right for the market was a challenge.

Following the launch of their first product, a waterproof and windproof fleece, they had some excellent reviews that helped build their reputation. This was a boost for the business, as was turning over a small profit in their first year.

“Now we’ve been successfully trading for a year, we feel we’ve passed a major milestone – we have a bit of a track record and are really establishing ourselves as a serious business. Online banking has made our life easier and helped the business. We can check our accounts and make payments online, which saves time and makes banking a lot simpler.

“We also use computerised bookkeeping software on a weekly basis to help manage our cash flow, control stock levels, and manage our customer and supplier relationships. Having an online bank account means we can automatically reconcile our business bank accounts with our books, so they are always up to date. Another major benefit we’ve found from using bookkeeping software is that it helps us identify which products are the most profitable.”

Tom Kay, Managing Director, Finisterre

 

How to get computerised bookkeeping for your business

If you want to start using a bookkeeping package for your business then we suggest you check out the Barclays Business Manager range. It features essential business software including bookkeeping software from either Sage or Intuit on a subscription basis – this means you’ll always receive the latest version for as long as you subscribe. Find out more about the types of bookkeeping software we have for your business type, visit our product and service pages.