WHAT’S IN A BOOKKEEPING SYSTEM?
A bookkeeping system needs to do many things. The three key items are
- It needs to run ‘the books’ for your business
- It needs to provide information that you need to run your business
- it needs to work inside your business – that is it needs to be functional within the day-to-day practices of your business.
When a business is in the ‘start-up’ phase, a pen and paper, or an excel spreadsheet, combined with a manual invoice book, or a word template may be enough to run the books. As your business gets bigger, you spend more time working, and have less time or desire to spend on bookwork. At this point, you’re probably going to consider a computerised bookkeeping system. There are many of these out there, all with different features, and different pricing. Not so long ago, you could only buy a ‘desktop’ software licence – that is a program which worked on one computer, or in one location. Then about 5 years ago, a program called Xero launched onto the scene, with a 100% cloud-based bookkeeping/accounting system. For Australia at that time, it was a radical and major change. So now you can buy software that is a hybrid (you install the software on any computer, but store your file securely ‘in the cloud’), or software that is just in the cloud. Obviously there are many different options, different providers (Xero, MYOB, Quickbooks just to name the big ones), and different pricing levels.
So when you consider a computerised bookkeeping system, you’ll need to consider what it is that you need the system to do. Does it need to:
- Invoice customers
- Record supplier bills
- Manage cash
- Manage inventory / stock on hand
- Manage loans, credit cards
- Account for GST and income taxes,
- Process Wages, and other payroll expenses
- Does it need to be scalable? This is, do you intend to grow your business outside of your current needs, and will the chosen software cope with that, or will you need to change programs? Changing programs is timeconsuming, expensive and stressful ….
Once you know what you need the system to do, you are in a much better position to examine all the different options, and to choose the right one for you. Other items that you’ll want to consider include
- does your accountant have software that they recommend? If you like software that they don’t will this cause a problem? Can you talk to other people using the software? Preferably people in your industry…. Most software suppliers are happy to tell you what’s great about their program, but not so forthcoming with the shortfalls it has (and they all have some!)
- Is there an industry-based software that would work for you?
- What support does the provider offer, or do you know a professional bookkeeper/accountant that can offer training and support?
A bit of time spent on considering these aspects of your bookkeeping needs may save you hours of time, and untold stress later on …
If you’d like any more information we’d be happy to discuss your individual needs….