Would LOVE your feedback on this one (as I’m sure will plenty readers!).
At the moment I use a spreadsheet to manage my accounting.
I’ve looked into software but because we’re here in London temporarily I don’t want to commit to start using anything over here – knowing that I’ll be starting my business back up again in Oz some day soonish.
The only thing I’ve decided on is that when I switch to accounting software I’ll be using something in the cloud.
Do you use a spreadsheet to manage your accounts? Or software? Why, why not? Would love to hear your questions/thoughts in the comments below!
P.S. Have a question you’d like answered or just want a second opinion? Tell me about it and if it’s suitable I’ll publish it for a Monday biz chat session.
SHOP HERE
January 23, 2012 at 10:39 am
We used spreadsheets for our finances but recently signed up to a trial of MYOB online however we never got into using it during the trial period due to lack of time and knowledge to set it all up. I know it would make our finances and especially taxes at the end of the year a million times easier to complete but finding the time to organise it all in between toddlers, other jobs and running the website! I’d love to hear how other people manage.
January 23, 2012 at 1:04 pm
Hi Clare
Love your site and Steve & Three’s destination tram scrolls too
Sounds like everything is going really well in the UK for you. Doesn’t time fly?!
As you probably would guess, I use accounting software for my own business and also for clients. MYOB and Quickbooks are the main two and I always recommend using software over spreadsheets – particularly once a hobby turns into an enterprise!
There’s always pros and cons for any decision so below are my pros and cons for choosing accounting software:
PROS
- Checks and balances – accounting software enables reconciliation of accounts and allows reports to be generated (ie. sales by customer, purchases by supplier, Profit & Loss Statements etc.);
- Tax (inc. GST/VAT) compliance – if set-up properly and inputs are accurate, the business owner can engage the software’s capabilities to assist with preparation of returns to various tax authorities;
- Business management/planning – some of the latest versions of accounting software allow for improved budgeting and forecasting so business owners can keep focus on what’s ahead and not merely what’s been and gone (be proactive not just reactive);
- Analytics – variance analysis (actual vs. budget), key ratio analysis (eg. liquidity ratio) and graphical data can be obtained and used for performance monitoring (past trends, current position and future KPIs); and
- Win Approval – win over your tax agent or accountant with a complete data file at the end of each reporting period. We just love a good working file that is standardised but still caters for your business’ needs (eg. entity structure, industry etc)
CONS
- Cost – everything comes at a cost, right? The software purchase may cost anywhere between $300 and $1,000 for most small businesses, I find it is money well spent in the long term;
- GIGO – garbage in, garbage out. Be sure to input transactions accurately otherwise the end result won’t be reliable and further costs may ensue when it is tax return time and your tax agent/accountant may need to dig around to query items and make adjustments (eek!) If in doubt, engage someone that knows what they are doing to help set-up the account structure and guide you through the data entry process and reporting capabilites.
Like I wrote earlier, I always recommend using accounting software but each to their own. Weigh up the cost and benefits for your own situation and remember to include the non-monetary cost/s (ie. stress and headaches when it comes time to report your business’ annual figures and performance!!)
Hope this comment has helped somewhat…? If only one person who reads it takes part/all of it onboard, then I will be a happy bean counter
Cheers
Emma
January 23, 2012 at 7:10 pm
Hi Emma, thanks for dropping by and for your advice!
Emma helped me get my head around bookkeeping when I first started. She was very patient as I was very confused at the time! She worked for a big accounting firm before going out on her own. Make sure you read through her comment because I think you’ll find it really helpful.
January 23, 2012 at 7:12 pm
have you looked at sales foce? its a crm that is cloud based and does order tracing as well I have had a look into it and looks good, we use quickbooks for the accounts.
January 23, 2012 at 7:13 pm
Hi All
Well, this is an exciting post for me as I run a bookkeeping business and one of the things I love to do with a business is help them through the transition period of moving from excel based bookkeeping into finding the best system available to suit the business requirements! I love working with growing businesses to nut out their processes and procedures during this transition time.
I currently work with MYOB, however have worked with so many others. A great package called XERO is on the market which is ‘cloud’ based and is great if you have multiple users accessing it, or your accountant or bookkeeper needs to access your database. It means all parties are always working with up to date data. I know MYOB has also released a similar product although I have not used it.
January 23, 2012 at 7:15 pm
Perfect timing Clare! I’ve been having this conversation with myself for a few months. I use a spreadsheet but it drives me nuts and I always worry come tax time it’ll all be incorrect!
I’ve looked in Quickbooks & MYOB and have heard positives and negatives for both. I am curious about using the cloud but don’t like the idea of monthly fees when you can pay for software out right.
Would love to hear what everyone else uses.
January 23, 2012 at 7:26 pm
Clare, I am using Saasu for my accounting (online). Originally was tossing up between that and Xero but found that Saasu seemed to have more features and was much more affordable.
It’s been 6 months now and so far so good… generally not a fan of the accounts side but have to admit this makes it pretty painless and I do love the fact that I can log in from anywhere. Also has an automated bank feed so you can link your business bank account which makes reconciling transactions etc really easy. Hope Stevie and Three is going well for you! : )
January 23, 2012 at 7:44 pm
Thanks for mentioning Saasu Anna – I was checking that out before we left. Good to hear that you like it.
Another friend of mine uses Xero and was also told to check out Freshbooks but not sure if that’s more for invoicing/the freelance side of things.
January 23, 2012 at 11:06 pm
I hope I am not being an overposter! I use Freshbooks.com. It is a Canadian based site and is free to use if you are managing 3 clients (I think) and once you increase you need to upgrade. I pay around $19.95 US so a little cheaper for Aus (yay) a month. It tracks your hourly rate or project rate and even individual sale prices. Its easy to use and you can brand the ‘skin’ as your business. The reporting is great and it makes invoicing SO much easier every month (plus they actually look nice… not like boring old MYOB).
I highly recommend it.
January 23, 2012 at 11:17 pm
Thanks Jess! So can you ‘enter’ sales of individual items too? Is that what you mean by ‘individual sale prices’? It would be amazing to have one package to handle my freelance invoicing and sales of my prints etc. P.S. You’ll never hear me complain that you’re posting too much!!
January 24, 2012 at 11:12 am
I’ve used Saasu and found it good. It does more than I need and there is really good support when needed. It interfaces with lots of other software too (not that I’ve needed that, but my I.T. supplier uses it too with interfaces to generic software as well as his own stuff).
I’d definitely go with a cloud solution. No software updates, info available at your fingertips from desktop, laptop, smartphone… real-time access for yourself, admin help, accountants… I’m no genius with technology OR finance and I liked it. Lots.
Cheers
Shanina
January 25, 2012 at 5:54 pm
We also started using Saasu around 6 mths ago and hadn’t heard or tried anything like it before until it was recommended by one of my contractors. Seems to be working really well and great that you can check whenever, wherever you are.
Accounting is my weakest side and Saasu seems to make it pretty simple:)
January 27, 2012 at 11:55 am
I love your blog Clare…you find the most wonderful things.
I use Saasu too and really like it. Takes a bit of time to set up but it means that if you employ a bookkeeper he or she can be anywhere in the world. Mine lives down the coast so she gets to stay by the beach rather than coming into the city. Smart girl.
One feature I love about Saasu (that I think will help you) is that you can save different template emails. So you can have a different one for your freelance work and another for your prints if you like. The bank feed function that Anna mentions makes it really easy to reconcile your bank account.
Good luck changing over…just allow yourself plenty of time to get it done.
January 27, 2012 at 11:57 am
I was using a spreadsheet for years, then MYOB software, then switched to MYOB online this fin year, but I don’t like it very much. It’s a bit clunky and not intuitive. My husband runs a graphic design agency and uses freshbooks and raves about it. So I’m going to ditch MYOB and go Fresh. Hope that helps!
January 27, 2012 at 12:24 pm
We are Aus based and used quickbooks online (after having used quickbooks on our pcs for years). I am in retail with 3000 items. We love the ability to login from anywhere – its about $300 per annum per concurrent user – so you can get away with one quite easily.
Highly recommend the cloud – your accountant can just login and “fix stuff” – so make sure you get something they can use too – or change to one who uses what you end up going with.
When we first went from spreadsheets to QB we hired a guy to set it up and train us – took 1 day and was essential – otherwise I would not have had a clue! Set it up correctly and you will be right for life.
I looked at Zero, but at that stage inventory was a seperate add-on and was only for a few products, and there was no.t payroll – that was also an additional add-on. QB has its issues (as do they all) but it has everything you could ever need. I hope that helps!
January 28, 2012 at 1:03 pm
I have been looking into solutions for artists and creative small biz owners in the US. I love a new tool – a website called Outright. It also connects to Freshbooks and they are growing their business. It has saved me so much time in my quarterly tax preparation. It syncs with your Paypal and business accounts and you can tag transactions for tax purposes.
January 31, 2012 at 12:29 pm
Great piece, exactly what I was contemplating this week.
My business is small doing craft markets and Etsy at the moment, but just starting to prepare for wholesaling to stores and the endless spreadsheets are the last thing I feel like doing.
Time to get some software to help my poor brain.
Thanks again.
Amy
March 21, 2012 at 7:05 pm
Hi Clare! I just found your website and it’s an amazing trove of wonderful advice and great posts!
For accounting, I use Easy Books on my iPhone (and they’ve also released a version for the Mac). It’s double entry accounting and it was so user-friendly and made so much sense right off the bat – before it I couldn’t even figure out accounting in general. Good luck!