All business documents must be filed in a logical order and recorded in a bookkeeping system for each financial year, the system may be manual or computerised. Computerised bookkeeping packages may be purchased from specialised suppliers.
Should I use computerised software for bookkeeping?
The choice of a bookkeeping system is very much determined by the owners of a business. Businesses may feel that the use of computerised bookkeeping software can aid the business considerably.
The advantages of using computerised software for bookkeeping include:
speed, data processing and searching should be much quicker
automatic calculations and the updating of all relevant accounts (ledgers)
What computerised bookkeeping software is available?
There are many computerised bookkeeping software packages available to buy off the shelf. We take a look at four different accounting software packages below.
Accounting software packages
Accounting software packages have a range of tools, from the basic to the more complex. All the following offer services aimed at the sole trader and small business owner.
Sage offers various different packages; the cheapest is Sage One Start for sole traders at a monthly cost with 24 hour help available. The basic package allows you to import information directly from the bank which will update your accounting records and submit VAT returns to HMRC.
A separate payroll package must be purchased if you have employees.
If you have multi users or multi currency transactions you must purchase a more expensive package.
Sage is probably the most widely used accounting package for small businesses and training courses are offered in the use of the software by many training organisations.
Prices start from £2.50 (plus VAT) per month, increasing to £5 per month (plus VAT) after three months. Payroll prices start from £2.50 (plus month) per month (for up to 15 employees), increasing to £5 (plus VAT) per month after three months.
QuickBooks offer various packages at increasing monthly costs, the basic package is designed for sole traders who are not VAT registered. Information can be transferred directly from the bank and there are facilities to keep a track of mileage and customise your invoices. Online and telephone support is available.
Kashflow offer different packages at a monthly cost with 24 hour help. The starter package has a limit on the number of invoices (10) and banking transactions (25) that can be used each month. The invoices can be customised, information can be transferred directly from the bank and VAT returns can be completed.
All packages offer VAT online and the bank transactions can be automatically transferred, but only the most expensive package can be used for multi currency transactions. For an additional monthly cost a payroll package can be added.
Prices start from £5 per month (increasing to £10 per month after three months) and payroll starts from £5 per month (for up to 5 employees).
Checklist: How do I choose a computerised bookkeeping package?
Often the initial choice of an accounting package will be the cost. A simple way of deciding which package to purchase is to initially list your requirements. Use the checklist below to get started – as you work through the list, any checkboxes selected will automatically be saved to your profile.
Most software providers offer a free trial for a short period of time. It’s a good idea to run your chosen software alongside any existing system you have in place to compare the results. When selecting or switching packages, bear in mind small business will not necessarily need all the features offered by the package.
Interactive tutorial: Understanding bookkeeping
Here we look at the fundamentals of double-entry bookkeeping. Click on the Start button below to find out more.