Desktop or cloud accounting – is switching really worth it?
In short – Yes – being able to access your accounting records from anywhere, is more important now than ever.
Cloud accounting has been around for many years and hundreds of thousand of small businesses are benefiting from the technology of cloud accounting software. Although, there are still some businesses who still rely on manual books or spreadsheets to record their transactions.
The cost of standard Cloud accounting bookkeeping packages range from free up to £30 plus VAT per month. The software can be easily adapted and upgraded by adding compatible applications (at a further cost) which will enhance the bookkeeping package, saving you even more time and providing better insights in to the performance of your business.
Cloud accounting software pulls through your banking transactions directly from your bank, which means you do not have to manually write or type them into books or spreadsheets. You simply allocate the transactions to categories as you go along, meaning you can instantly see how much income you have taken, payments that have gone out and what level of profit or loss you are making – this can be shown daily, weekly, monthly or annually.
Having up to date information allows you to make better decisions for your business and adapt quickly to change. The invoicing function on all the systems that we deal with are brilliant, and they allow you to send invoices via email, there is no longer a need to print invoices or post them. You can also send reminders and statements to chase up monies owed within just a few of clicks of your mouse.
The main products that we deal with at MHA Moore and Smalley are:
1) QuickBooks Online – from £7.00 – £30.00 per month
2) Xero – from £10.00 – £30.00 per month
3) FreeAgent – free to Natwest business banking customers
• QuickBooks is the global leader in cloud accounting software with more than a million subscribers worldwide.
• They have great reporting options such as projects, department and budgeting built in as standard.
• Management report packs are simple and quick to set up and there are lots of insights available to you when you log on.
• Like FreeAgent it links to HMRC, your accountant and your bank.
• A good function for many businesses in the current climate is that you can track employee time through the software for free, which many businesses have found really helpful for furlough claims.
• There are hundreds of third-party apps which you can link to but not as many as Xero.
• Xero is the market leader in the UK having penetrated the market early on after significant growth in Australia and New Zealand.
• It is slightly more expensive than QuickBooks Online and there are additional charges for its Project management and CIS module, which are free and come as standard with QuickBooks Online.
• However, Xero has more third party integrations than QuickBooks Online meaning it provides a better ecosystem for growing businesses looking to expand quickly and wanting an accounting system linking into their other front office systems.
• This is a great tool for contractors and consultants.
• It has the facility to link to your bank account, HMRC and your accountant.
• It has limited integrations to third party apps compared to QuickBooks Online or Xero.
• The more complex accounting functions, such as departmental reporting, budget reporting and advanced management reports, are limited in FreeAgent which is why I would recommend this for micro businesses.
• This is an amazing product which takes your paper invoices and posts them into your software via OCR technology. No more manually posting individual invoices.
• The software can even get invoices from some of your suppliers through a “fetch” function, which means you don’t need to even scan in the invoice! Having supplier invoices in your accounting system on a timely basis allows you to be able to focus on available cash, which leads to better business decisions.
To find out more about cloud accounting software and ReceiptBank please contact the Digital Solutions team.