5 reasons you need an accounting system

I get asked a lot whether you need an accounting system to run your accounts, so I have put together 5 reasons you would want an accounting system.

You are a limited company

If you are a limited company, you need an accounting system.  The requirements for submitting accounts and tax mean it is a huge advantage to have an accounting system and would save on year end accounting fees.

You are VAT registered

If you are VAT registered or plan to be, even if you are a sole trader, Xero can submit your VAT return at the press of a button.  It makes a huge difference to managing VAT in your business. 

Your business is complicated

Your business may have several revenue streams to manage, or payroll to pay, or be in business with someone else.  Or you are a product business with stock to manage.  Having a system, rather than a spreadsheet makes managing your business much easier.

Real time information

Having information and knowledge at your fingertips is really key when it comes to your numbers.  You don’t want to wait until your tax return is due or your accounts are due (9/10 months after the year end) to know your numbers for the previous year.  Knowing where you are in real time is really important.

Efficiency

It’s much more efficient to use an accounting system.  You can do things like send in your invoices for processing, bill clients directly, pull in your bank transactions automatically and match items as they come into the bank.

 It’s worth noting that there will be a cost to having a system, but ones like Xero are around £30 per month (including VAT) and I believe this is a great investment in your business.  You may also need someone to do your bookkeeping but this can be done for as little as £50 per month.  I also offer a guide for Xero if you want to do it yourself.

 I only deal with Xero in my business, but QuickBooks and other providers are on the market as well.

 If you want to have a chat about setting up your accounts on Xero book a chat here.