There are four key steps that businesses should follow when it comes to choosing the right online accounting software, according to Riz Wasti.
The principal of London-based 2E Accountants added that immediacy and convenience were the main advantages of a move to a web-based system – which allows business owners to manage aspects of their accounts from anywhere that has internet access.
He said: “By making the transition to online accounting software you can save yourself considerable time, keep your records up to date wherever you are, and ensure you have all the correct information recorded for your own use and for filing VAT returns and company accounts.”
The first step involves many facets centred on the importance of spending ample time to find the right online accounting software and seeking expert opinion.
The system should have a user-friendly interface to allow for easy navigation between the different features and offer a good journal module for accountants, according to Mr Wasti.
He said that a system which does not offer a multi-currency feature is not suitable for a business that manages multi-currency accounts. Similarly, if the business has slightly complicated VAT rules to follow, company bosses should consider a system that implements reverse charge calculations automatically.
Step two involves checking the type of reporting on offer and is particularly essential, Mr Wasti said, adding: “You may require comprehensive reports at the month-end for example, and some may not offer project-based recording or retrospective reports for analysis.”
Once the software is chosen, business chiefs should allow for some time and cost to be incurred in the migration process, Mr Wasti said.
He added: “The exact steps will depend on your business type, but you can likely expect to do the following: reconcile the data, the bank, aged debtors and creditors; set all required nominal codes and project codes; set accounting periods, VAT periods, and VAT schemes; confirm the right depreciation rates for the asset register; and customise the sales invoice template with your logo and design.
“Hiring someone to help you can be really beneficial – be sure to allow a reasonable amount of time and budget. Based on size, this can be from £500 and a couple of days, to £3,000+ and couple of weeks.”
Step three is to test the migration by checking the balance sheets and compare it with sample information from the software used previously.
The final stage is to start using the system.
Mr Wasti said: “There is a learning curve involved. Do not assume everything will go as easily as the advertisement predicts. There will be several ways of working within the system you have chosen, so find by trial what works best for you, and when in doubt, seek advice.”
Rebecca Aldridge, managing director of Balance: Wealth Planning Limited, based in Nottingham, said: “We use a web-based system in the company. It works really well and allows not only myself, but also my accountant to gain access to the system. It is easy to use and is a modern approach to traditional dealings.
“It is important for companies to go through the due diligence process when choosing an online accounting system. You have to be confident and comfortable about where the data is being stored and where it is backed up, to ensure that you have chosen a secure system.”
