This is part of a series of the Top 10 Bookkeeping Mistakes Small Businesses make. To read the others, click here.
Not using bookkeeping software properly
For many small businesses, “bookkeeping software” is comprised of a notebook or a few sheets of paper, or an Excel spreadsheet. While it’s better to have that than nothing at all, your bookkeeping – and your business – can suffer if you don’t use the proper software.
And now that technology is moving on faster and faster, online bookkeeping systems have come to the fore and can save you even more time and hassle, because:
- You don’t have to download bookkeeping software to a computer
- You’re not restricted to doing your bookkeeping in one place (sitting at your computer, in your office, at home)
- Online systems are updated and upgraded on a continual basis, not once a year
- You gain a community of other business owners who also use the system
- Online systems tend to have better help and support features
- It’s easier to send data and reports to your accountant (yes, unsurprisingly your accountant loves to have things organized well also)
- There are fewer errors (the better the bookkeeping software system, the quicker it catches things you didn’t even notice)
- Everything is backed up. In a worst case scenario (a fire destroys your office), your bookkeeping and accounts are all held securely online, accessible anytime, from any computer.
Some small businesses are nervous about putting their bookkeeping and accounts online. The companies who produce these systems are extremely conscious of the need for security, and sometimes go overboard in ensuring it. And it helps when you know that hundreds of thousands of other businesses are trusting these systems with their details. Let’s face it: if the systems were not secure, people would leave in droves, and the company would have no customers.
Bookkeeping Software and Systems
Here are a few bookkeeping software systems that you can use:
AccountingCS – This bookkeeping software offers unprecedented collaboration between accountants and clients. This is our first choice for small business software. In some instances, the following products offer additional functionality that is needed by some businesses.
Quickbooks Online – This bookkeeping software has both online and offline systems to choose from, depending on which you prefer.
Xero – Online bookkeeping software used by (so far) over 200,000 businesses worldwide. You can even try it for free.
FreeAgent – Another online system, with a goal of being super-easy to use and community-friendly. Invoice templates, email notifications for payment – all in one place.
SageOne – A simple, online solution for small businesses and entrepreneurs. (Not for growing businesses with more complex transactions and features – for that you may need SAGE Line 50.)
There are many, many others. You can read recent reviews here. We’re just trying to give you a flavor of what’s out there – but if you want to tell us about your business and get our thoughts on which one might fit you best, just ask. We’d be happy to help – no obligation at all.
If you’re already using bookkeeping software
If you are already using bookkeeping software, of course, you can still find yourself making the mistake of not keeping your books properly on that software. No amount of great new online systems or bookkeeping software will make you a bookkeeper when you are not, or create invoices out of thin air.
Learn how it works. Use the help system, videos, training guides, webinars, and even live events. Talk to someone on the phone. Bring your accountant into the mix. Don’t fly blind.
Use the reporting functionality. There are very powerful reports to tell you how much money you’re making (or not), how much you’re owed by customers, which suppliers you need to pay first, how your cash flow is moving, which products are the most profitable. Spend some time to get to know these reports – and ideally, go over them with your accountant so you can make better business decisions.
Delegate. You as the business owner should not be sitting there on a Saturday morning entering invoices. Get someone involved – preferably a part-time bookkeeper, freelancer, or your accountant. They’ll have more experience and make fewer mistakes.
And let us know how it works for you!