Mike Parkes is senior manager at TWD Accountants Ltd, who offer a fixed fee service for completing tax returns and accounts. An advert for TWD Accountants Ltd appears in this issue or go to www.twdaccounts.co.uk/swpp
You'll already be busy running your business, so the extra hassle of bookkeeping is something that probably you could do without.
It has to be done though. Keeping accurate records is essential for each and every business. Otherwise, cash-flow can be difficult to track; invoices can go missing or bills unpaid; you may have little idea what your effective profits are from one day to the next. All this can add to your accountancy costs.
Before computers, methodically noting all business transactions was even more time consuming. Nowadays though, technology can help.
The simplest solution is a spreadsheet (Excel or Lotus Notes for example). These are effective for straightforward sets of transactions – provided you know how to use them. For more detailed records though they can be limited. They simply cannot process the information in a useful way without a good knowledge of creating spreadsheets.
With computers came accounting or bookkeeping software.
Generally excellent, these packages offer many benefits over less sophisticated methods. But they can be hard to use.
Although you have instant access to the program and any data is saved on your hard drive, there are also many disadvantages.
Traditional software needs to be installed on your own computer.
The software sits on your computer, often taking up a lot of space and memory. It is possible that the settings on your computer will be affected to allow the software to run.
The program may become outdated. You work on the version you install, unless you update it, which can involve a lengthy download from the internet.
Recently there has been a small boom in online accounting software, part of a general move towards 'On-demand' software provided over the internet, whenever you need it.
This works in a quite different way from traditional software.
The crucial difference is that the program is held on the web on a central server, and you access the program over the internet in a similar way to a normal website. This method is ideally suited to accounting software as you enter information and store it for later.
Amongst the benefits of any online system are: There is no software to install You always have the latest version Automatic backups keep your data safe
You can access your records securely from any computer at any time
It is generally much cheaper
These advantages are in addition to the ways accounting software can benefit your business, such as records instantly available and all your calculations done automatically.
In summary, you can have a powerful bookkeeping and accounting system that is always up to date and entirely secure for a fraction of the cost. Sounds too good to be true, but it isn't. Online accounting is here and available now. It could really help your business and save you money.
Have you got a topic or general tax question you want us to cover in the next Q & A issue? Then email firstname.lastname@example.org
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