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Accounting Software - Which one should I choose?




Let's look first at what accounting software does, shall we?

Accounting software comes in many guises, from the very simple to the more intense, and the choice that you make does depend upon what you actually need it to do.


What can it do?

Well, at its most basic, accounting software can reconcile y our bank account, and in doing so, it can also provide a basic P & L (profit and loss account).

It can also please your accountant(assuming that you have one), because even if you're 50% correct in your use of the software, it can provide them with 75% of the detail that they need to either produce your VAT return, your accounts, or any other detailed information that you wish for.


What else can it do?

  • It can create invoices for you (automated or manually)

  • It can link to payment providers such as Go Cardless or Stripe (thus cutting out a spot of admin when the invoice is paid)

  • It can link to your bank account and provide a bank feed to facilitate a speedier bookkeeping process

  • It can create your VAT return

  • It can make your accountant terribly, terribly happy, (unless you've coded all of your fuel receipts to insurance, and then we probably need a chat)


The possibilities are endless, limited only by your imagination.


Why would you use it?

This is a really good question and one that I struggle to answer. I've been using it for so long that it's difficult to remember a time when I didn't use it. But broadly speaking, if you have a business with a decent number of transactions, there are things that you can ask the software to do that will take a task off your hands and allow you to do something else instead.

Things such as asking it to create repeating sales invoices, and chase those late paying customers. All those mundane tasks that you'd rather not do. The things that you save for a Friday afternoon.

Life will run that tiny bit more smoothly with it.


Cost

Most software has a cost associated with it, and it does vary a lot. One software, for example, will do all the basic things that Xero will do, for a fraction of the expense, but won't allow add-ons that Xero users take for granted.


Now that we've mentioned one software provider, let's take a whistle-stop tour of the main contenders.



Xero

Xero is one of the big players, the heavy lifter of the software game.

It can help with invoicing (purchase and sales ledger), payroll, expense claims, bank feeds, and debt collection. Cash flow forecasting and online payments are other great features.

The mobile app isn't too bad (none are brilliant), and you can import all your usual bank accounts, including your Paypal account, Go Cardless, Stripe, etc.

There is a huge bank of third-party apps to choose from to enhance your app stack.

Prices start at £6 per month for the very basic package that allows a bank feed.


FreeAgent

If you have a Mettle business bank account, then Freeagent is free of charge.

Your bank account will connect to it seamlessly and provide a bank feed to enable you to reconcile your bank account, and you can also upload your receipts.

It takes a bit of working out, but overall, not a bad bit of kit.

It's aimed at the smaller freelancer, sole trader, or small business owner, and if you don't apply for the free version, pricing starts at £9.50 + VAT for a sole trader.


Wave Accounting

Wave is free software that allows you to create invoices, accept online payments, track your income and expenses, and scan receipts. It's gaining traction in the market and is aimed squarely at freelancers, the self-employed, and consultants/contractors. Simply put, business owners with fairly uncomplicated accounts.


Quickbooks

Very popular with a lot of businesses, Quickbooks, alongside Xero, allows your accountant to access your portal, ensuring a smooth handover of information at year-end.

Linking to your bank accounts, it provides all the same features, such as invoicing, VAT returns, bank reconciliations, online payments, GoCardless integrations etc.


So which one should I choose?

This is a 'how long is a piece of string?' question.

If pricing is an issue, and your accounts are uncomplicated, then software such as Wave or FreeAgent are good tools to have in your back pocket.

But if you want your software to grow with you, then I'd be looking at Xero or Freeagent.


Whichever one you choose, know this.

You can always change.




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