I've been working on some educational emails about cash flow over the past few days and it highlighted to me that if you don't have an accounting system, things like staying on top of your cash flow are just so much harder. I wholeheartedly recommend that every small business invests in an accounting system, and today I wanted to share my top 5 reasons why you need an accounting system.
1. It speeds things up
Want to see which of your invoices are outstanding? Simple, rather than spending hours working out which invoices you've raised and looking through your bank statement to see who's paid, you can run a report at the click of a button to see who you need to get on the phone too.
2. And by speeding things up, it gives you your life back
Think what else you'd have time for if you didn't have to spend hours of your week dealing with bits of paper and updating a spreadsheet. Do you want to spend more time on your business? Do you need time to research that new product which you just never get time for? Maybe you want to just spend a bit more time with your family. And freeing up some time means you can focus on any of these things, how exciting is that?
3. We're all going digital anyway
HMRC have an initiative called Making Tax Digital (MTD) which will get us all submitting tax returns for our businesses through "MTD-compliant" software. Getting an accounting system now and learning how to use it means you're one step closer to being ready for MTD. Having to deal with the way you submit your tax return and also learning a new system at the same time might be a bit too much overwhelm for one go.
4. You can get help with your accounts when it matters
Many of the online accounting systems allow your bookkeeper log into your account. This means they can help you remotely and make changes when you need them without having to wait until the end of the year.
5. It helps you make decisions
If previously your accounting process was to fill in a spreadsheet at the end of the year so you could do your tax return, you probably didn't have very good information about how your business was doing in the moment when you needed to make decisions. An accounting system will encourage you to keep up to date regularly, think about the future rather than just looking back, and this will make it easier to make decisions part way through the year if you need to.