There is nothing more exciting than starting your own business. You offer a great product or service, you’ve nailed your selling point, you’re promoting your business, and you’re growing your customer base—all wonderful. But unfortunately there is one dreaded area that all businesses have to deal with, whether you have a dog walking service, an online store or your local deli – accounting. Sure there aren’t any legal Obliged to keep your accounts on track, but if you don’t have a system or an accounting firm, you’ll be in a world of pain when those tax deadlines loom.
Thankfully, gone are the days of endless paper books and giant calculators (although they come in handy in a pinch). There are now many e-solutions that help you keep track of your income and expenses – but with so many options how are you supposed to know which one is right for your company?
Digital accounting packages
There are a few industry favorites with their own pros and cons. Regardless of whether you want to choose Sage or Xero as your accountant, you should not only think about your current needs, but also your long-term needs.
If your company is relatively small, one of the simpler packages is a good place to start. You could even get by with Excel — a decent spreadsheet is better than nothing — but unless your organization is stagnating at a relatively low level, you’ll be expanding, and with expansion comes more paperwork. Will there be stock options? Do you have a lot of people on your payroll? Are they freelancers or employees? Do you have a lot of wealth? Do you have your overhead costs under control? Which CRM system do you use?
That’s a lot of things to consider, and it’s easy to forget while you’re busy with the day-to-day business. No one can be expected to be a fully qualified accountant and sooner or later you will need one – and as a friendly reminder, they charge by the hour. The easier it is for them to go through your books, the better.
You need to keep records over a significant period of time, so you not only need a software package that can keep pace with your business growth, but also a system that can be easily updated and adapted to accommodate businesses of different sizes. Ease of use is one of the most important things to consider when choosing a package and you should be aware that once you get used to an accounting system, it becomes very difficult to switch to a new one, both from a perspective of data transmission as well as learning .
Best choice for a small business
For a small or new business with growth potential, the newcomer Xero is actually a great choice – it was originally designed for smaller businesses, but now has plenty of easy-to-use add-ons that can turn this accounting tool into a powerhouse that can do 7 -digit sales. Woe to you if you get sucked into something like SAP, which is notoriously over-complicated, costs a fortune, and requires NASA engineers for technical assistance. Going for the cheapest option isn’t the wisest idea either, as many smaller software packages may not keep up with the times or may even go out of service – you want something with decent upgrades and good customer service!
At the end of the day, despite what the men in suits are trying to tell you, all accounting software does the same thing – it adds and subtracts and keeps records. Ultimately, you should see what you’re most comfortable using on a day-to-day basis – whatever package you choose, effective bookkeeping depends on you and you need to develop good habits – organizing your receipts and bills, keeping up with data entry and Definitely Not Up at the last minute!
