Why you should use accounting software with your website

We believe that computers should make our lives easier! With that in mind today we're looking at why we believe EVERY business should use accounting software to save them time, save them money, and generally make their lives more hassle free.

Many of our clients are small to medium sized businesses, and don't necessarily understand what accounting software is, and perhaps even what the difference between a bookkeeper and accountant is, so this article aims to explain everything in plain English, and why we believe you should be using accounting software with your website if you sell online.

I've broken it down into 7 easy to digest sections:-

1) Accounting basics and jargon explained

2) What is accounting software, and what does it do?

3) Most common accounting software

4) Why you should use accounting software

5) The "old skool" alternatives to accounting software

6) Why you should integrate your website with accounting software

7) How we can help

A quick disclaimer

Please note that we are a web design company, and not accountants so our advice here is from our own experience in integrating websites with accounting software to save clients time and money. We are not able to provide accounting advice.

All prices are correct at the time of writing.
 

1) Accounting basics and jargon explained

As many readers may be new to running a business, or using accounting software, here is some basic "jargon" and accounting basics.

What are accounts?

Every year every company has to produce a set of "accounts", which show everything they've sold, and everything they've purchased.

If you're a limited (Ltd) company you'll produce annual accounts, on top of your personal tax return.

If you're a sole trader, then your accounts will be combined with your personal tax return.

Accounts are usually prepared by a bookkeeper, and signed off by an accountant (see definitions below).

Who is who?

2) What is accounting software, and what does it do?

Accounting software usually does the following:-

• Allows you to create and keep a track of invoices
• Log everything you've spent
• Work out who hasn't paid you
• Ensure what you've received into your bank account matches up ("reconciles") with what is in your accounting software
• Prepare your accounts and VAT returns

Accounting software is usually used by:-

• Your bookkeeper to input all your receipts etc
• Your accountant to prepare your accounts
• You to understand where your business is at financially

3) Most common accounting software

Below are the three most common accounting software packages we encounter.

We can't advise on which is the "best" accounting software to use, as it all depends which is best for your business. Often you'll find that your accountant is more familiar with one accounting software than another, so may prefer that you use particular software as it's what they know.

Our personal favourite is Xero, but that's not to say it's right for everyone.
 

4) Why you should use accounting software

Here are the top four reasons why you should use accounting software:-

1. To save time
   The idea of accounting software is it can do a lot of the boring calculations for you, to save you the time of doing it.
    
2. To automate boring tasks
   There are many tasks such as bank reconciliation and VAT returns that many accounting software systems can do so you don't have to
    
3. Financial efficiency
   If you've got an accurate record on your finances, then you can operate your finances more efficiently
    
4. To stay legal
   Every business, regardless of whether you're a sole trader or registered company, has to keep a track of their finances and pay tax. Accounting software is one of the key components that enables you to do this.
    
5. Because as of next year, the government will make you!
   The UK government are introducing what they call "Making Tax Digital" (or "MTD"). It basically means that all businesses will need to keep digital records (no more bags of receipts!) and make quarterly returns, much like a VAT return. The digital records CAN be a spread sheet, but software like Xero will integrate with HMRC to make quarterly reporting easier. Enrolment is being staggered. VAT registered businesses from April 2019 and other businesses year after. The fine details are not available yet, but it is something to be aware of. Click here for information from the gov.uk website.
    

5) The "old skool" alternatives to accounting software

Here are the "old skool" alternatives to using accounting software.

6) Why you should integrate your website with accounting software

What is integration?

What we mean by "integration" is simply linking your website to your accounting software.
 

What can it do?

The two most common aims of integration are:-

• So invoices are automatically created in your accounting software when orders are placed on your online shop
   
• To syncronise stock information
   

The benefits

1) Save time as integration automates boring tasks such as invoicing creation for you

2) Save money on bookkeeping/accountancy fees as integration automates a lot of the work

3) Have a clearer view on your financial picture because integration means you can always be up to date with your invoicing and stock information, rather than only being up to date once a month once your bookkeeper has created all your invoices manually

7) How we can help

Our ecommerce websites can integrate with Xero and Sage, and we may also be able to integrate with Quickbooks.

We believe in making life easier... we believe that computers are here to do hard work for us!

So not only do our beautiful websites help you sell online with ease, but our integrations with the likes of Xero and Sage can save you time and money too.

If you're an existing client, and are interested in integrating your online shop with accounting software, please don't hesitate to contact us.

If you're not currently a client and would like to see how we can help you sell online easily, then get in touch! We look forward to hearing from you.