Over the past few years there has been a significant improvement in bookkeeping software available to small to medium sized businesses. Most software will undertake all bookkeeping function and also come with features which allow you to prepare VAT returns, management reports and the year end accounts. There are software designed for payroll processing which help to calculate salaries and wages, taxes (PAYE) and national insurance for your employees and stock management programs which keep track of stock movements and perform costing analysis.
With bookkeeping you have to be accurate in order that the figures can be used for year end accounts preparations and for other management analysis purposes.
Choosing the Software
Depending on your business activities and bookkeeping requirements, newly startup businesses may only require simple and straight forward software for recording business transactions and will upgrade the software to more complex with integrated detailed analysis of transactions as the business grow.
There are businesses owners run different companies under one management and in this circumstances, Multi-company with multi-users license may be ideal.
Choosing suitable software can be time consuming and with the sweet talk from all software retailers create confusion between which software is the best suit your accounting requirements. Always ask for a software demo or trial use the software for a period of time.
Generally, good accounting software comes with the following features.
Nominal ledger
Nominal ledger is where all the assets, liabilities, income and expenditure of the business are recorded.
Sales ledger
The list of customers who owes money to the business. The software will also be able to prepare monthly statements detailing the outstanding amounts and if necessary many systems will allow the preparation of standard letters of reminders regarding payments due from customers – chasing the debtors for payment.
Invoicing
Most software comes with the sales invoice generation feature. This has the advantage that the invoices are automatically posted to sales ledger.
Stock control
This is a stock management programs allow you to monitor your stock level and keep track of stock movement. If you are suppliers of building materials to builders you may use stock control to monitor your stock movement. As you purchase new stock they are added to the stock records whilst preparing a sales invoice automatically reduces the stock. In this manner you can quickly establish if an item is out of stock and also the value of stock on hand. Normally, you are able to set standard profit margins which automatically update the selling price of goods based on the purchase price so that your selling price is always updated.
Purchase ledger
The summary your suppliers that you still owes money to.
Order processing
This feature allows you to record orders from customers. It will allow the preparation of quotations, pro-forma invoices and the reservation of stock so that the items will be available at the appropriate time. You can then track them through, automatically producing the dispatch note and invoice at the appropriate time.
Job costing
Allows you to work out the cost of a particular job that you are undertaking for a customer. As you enter the components used the software calculates the cost of the items and the stock record automatically updated. Job costing can be useful in the calculation of invoices to customers.
Payroll
Some software will support the calculation of wages and salaries for your employees and also work out the correct amount of income taxes and national insurance contribution payable to tax office.
Multi company license
This license facilitate the software to process the records of more than one company or business on the same computer.
Multi user incense
This license is ideal for larger businesses with a computer network which allow several users access the accounting software at the same time.
Batch or real time input
On some programs transactions such as purchase invoices are entered in batches. This can have advantages in that if the documents are pre-listed you have a total to balance to so that you know the values have been entered correctly. Often the batch remains open for the current month and it is only at the end of the month that the totals are transferred to the nominal ledger. The disadvantages of such a system is that it is not possible to obtain meaningful interim reports until the batch is processed at the end of the month. By contrast on a real time system each invoice is posted to the nominal ledger as it is entered and although this means that there are more ledger entries made automatically it means that the ledger is always up to date.
Password protection
Most systems allow some sort of passwords protection. On some software this is a global password which prevents unauthorized users gaining access to the program. However, a better arrangement is to have different passwords for each user. This allows the supervisor to allow each user different access rights. Thus the sales department may have access to the sales programs but unable to gain details from the nominal ledger or purchase ledger.
Canterbury Accountancy –Bookkeeping solutions for small businesses and companies
