So how do you keep your accounting records?

webTim — Thu, 12 Feb 2009 16:07:15 +0000

I suppose you might have a draw full of grubby invoices that you pass to your accountant at the end of the year. Obviously your accountant will love you, not, and sent you a suitably large bill. Some people keep their accounts in a manual cashbook. It is a surprisingly good way of keeping them as it is easy to do, and at the end of the year it is quite easy to construct the accounts from, although it is not very good at being able to trace transactions after the event. As a result when a customer rings up with a question it can be difficult to help them. You will also have to manually transcribe all your invoices, and have a system to make sure you catch all the non cash payments (direct debits and the like).Being computerised, you might suppose that an Excel spreadsheet version must be better . At least that is the view of many businesses who think that accounts programs are too expensive. The idea is that being computerised it is easy to track things, they have all the advantages of the manual cashbook, and being cheap must be good. The problem is that errors are very difficult to find, and like the manual cashbook, they do not have the advantages of double entry book-keeping, which means that your accountants bill will still be quite large. You will also have all the invoicing and non cash payment problems of the manual system.
So most businesses have one or other of the hundreds of specialised accounting programs. Tas Books, Quicken, Sage, Mind Your Own Business, Mamut, Kashflow, but who knows which one is the best?
For start-up businesses Microsoft Accounts is popular, because it come effectively free. It is probably a good program, the problem is that so far, I have yet to find an accountant who has had the time to get to know it and find out what it can do.
Of the better known traditional accounting packages the undoubted king is Sage. You ask an accountant what program you should use, and 8 out of ten will say Sage - no need even to think about it. It was designed by, and for, accountants. It does everything that you could possibly want an accounting package to do. You run three locations in two currencies and employ 200 staff, and Sage is really your only choice.
The problem is that most business do not need that degree of complexity. Personally I prefer something like MYOB (“Mind Your Own Business”). It is far easier to understand, and more intuitive. It also does not use purely accounting language, so it is easier for the non-expert to understand.
The new kids on the block are web based accounting programs. The idea of these is that you use your existing internet browser to access the providers server, and then securely transfer the data. The advantages in principles are that the providers deal with all the updating and the flexibility of location. No more spending hours in the evening installing latest update every time the programmers or Chancellor decide to change anything. In addition you can access the information from any computer if you have the appropriate passwords. This means the business owner can access their accounts when at home, or the business’s accountant can access the information when you have a problem. As a side benefit at the moment they also tend to be a cheaper option.
So which do you choose? Well for a large company employing a specialist bookkeeper then Sage is undoubtedly worth considering. If you are an owner manager who also does the accounts, the MYOB or possibly TAS Books is fine, but you should also consider Kashflow as an easy to use alternative, which is still appropriate for the larger business who either operate from more than one location, or might want access to the accounts from home or some other location. Finally for small start-up business a spreadsheet might be good, but my advice would be to start off with a manual cashbook with 10 or 15 columns, and then if it is a success after 6 or 9 months, consider the £100 for Kashflow a worthwhile investment that will actually save you accountant’s fees.

norfolk-accountant.co.uk

So how do you keep your accounting records?