There are a myriad of different accounts software to choose from. So how do you choose which is best for you? Here are seven things to consider.
Cloud based or Computer based?
Almost all accounts software is cloud based but there are some which are hosted on a computer. Cloud based software you can access from any computer anywhere with internet access. Computer based software can only be accessed when you are sat in front of the computer or with a VPN connection to your computer. Cloud based software does not need to be backed up but computer based software will need to be backed up each time you finish doing your accounts. The back up should be to somewhere other than your computer because you need to be able to retrieve it if your software or your computer ceases working.
Which software does your bookkeeper or accountant recommend?
Bookkeepers and accountants know which software they prefer to work with and they would like you to use software that they are familiar with. Asking them to find their way around software they have not used before will be time consuming for them and possibly more costly for you. Even if you do the accounts yourself, your accountant will need to access the software and sort out anything which isn't correct before extracting information to prepare your accounts.
What is the Cost?
For most software you will pay a monthly subscription. When you cease paying you will not have access to your accounts. Monthly subscriptions will vary depending on the software you choose. Cheaper software is likely to be more limited in how you can use it. Some banks offer free access to software when you open a business bank account, however you may find you have to pay a monthly fee to access more than the basic software.
Most software will offer you a discounted subscription for an initial period but it is important to check the cost after that initial period against other software.
Monthly subscriptions will increase, often annually, so once committed you have to accept that the cost will increase. It is worth choosing something that you are happy to stay with rather than continually searching around for something cheaper.
Which level of subscription?
Most providers of accounts software will offer different levels of subscription dependent on your needs. Some levels will not have the option to record VAT and do a VAT return which is fine if you are not VAT registered. Some will limit the number of transactions or the number of bills or invoices you can add. Some will have the ability to add foreign currency bank accounts and transactions. It is important therefore to read what each level offers and decide which suits you best. Some providers will allow you to upgrade or downgrade but there will generally be a notice period to downgrade.
Is it complicated to use?
Accounts software adverts will tell you its as easy as pressing a button to file your VAT return or prepare and submit your tax return. It isn't, which is why we offer training in the software that we use. We know that not everyone finds it straightforward to do accounts as we see the muddle some people get in.
If you want to continue doing it yourself you need to spend time learning how to use it. Access the help and watch the videos so you understand what you need to achieve. You need to find a software which you enjoy using, otherwise you won't do your accounts. Ask your accountant to check that what you are doing is correct from time to time so you don't get too far down the line and find a lot of it is wrong.
Do you want to link third party apps to the software you choose?
If there is a specific software you use for your industry which would be useful to link with accounts software, then you need to be sure to choose the software it links with. Businesses use software to manage their business and that software often creates invoices which can be directly imported into accounts software, saving you the job of recreating them.
Do you have the knowledge?
Keeping your accounts is not just about using software and pressing a few buttons. You need to understand the rules about what are allowable business expenses and, if you are VAT registered, what you can claim VAT on and what information your customer invoices should contain.
It is a lot of work to change from one software to another so take time to decide which one is right for you. And if you need to change make sure it is at the end of a financial year, or, if you can't wait until then, at the end of a VAT quarter.