Appearing in this months’ Cornwall Living Magazine, our featured editorial exploring the five key benefits of using online bookkeeping software.
The postponement of Making Tax Digital (MTD) for income tax until April 2026 (and later for limited companies and partnerships) has been well publicised and subject to a vast amount of scrutiny. Whilst this postponement (and we are certain it will just be a postponement) may have been a welcome relief for those not yet keeping digital records, there are a number of advantages from transitioning on to an online bookkeeping software that could benefit your business in more ways than you might first think, so why wait until 2026?
Here we explore our five key benefits of using online bookkeeping software.
- Save time
The majority of time spent bookkeeping without using online bookkeeping software is a very manual and repetitive process.
Most online bookkeeping software systems utilise technology to automate those time consuming, repetitive tasks that provide significant efficiency benefits, and reduce accuracy through mitigating the issues of human error. Examples of this are:
- automatic bank feeds downloading all bank transactions
- data extraction software – automatically processing your supplier invoices
- the use of “rules” for recurring entries
- automation of routine journal entries;
- creation of sales invoices – create and send invoices, and send reminders for more efficient cash collection.
- User friendly
One of the most important benefits for business owners is that you do not need to be an accountant to use most online bookkeeping software. There is generally a short learning curve, and a lot of support from the provider available (as well as support from your accountant).
- Monitor business performance
With manual bookkeeping, this is usually done once a year and can be a labour intensive task, collating data that is out-of-date. With continuous computerised bookkeeping you have the ability to run accurate, meaningful reports with real-time data, enabling you to accurately monitor the performance of your business at the click of a button..
This enables you to make agile and proactive (as opposed to reactive) decision making.
- The Cloud
The majority of leading bookkeeping software providers are now using cloud-based systems, meaning that wherever you are, all you require is a device with internet access to be able to log on and access your data. This also enables your accountant to access your data at any time throughout the year to assist with any queries you may have and provide proactive advice (providing they have the required advisory capability, that we do).
Most leading bookkeeping software provides will also have a mobile app, meaning you can log on, upload documents and monitor financial performance on the go.
- Digital storage
Paperwork can be scanned and stored within the software, or PDF attachments received via email simply “dragged in”. Digitally stored records not only remove the need to store all of your paperwork in files and boxes (which take up valuable space and can easily be misplaced), you can also easily search for invoices on the software and view, reprint and resend if necessary. Digital record storage will save you time, space and money.
This also has significant sustainability benefits, reducing the need for unnecessary printing and paper usage.
Already using a bookkeeping software?
Many businesses have already transitioned to online bookkeeping software, however, are possibly not fully utilising all of the benefits on offer. For example:
- Bank feeds – connections that allow you to automatically import transactions from your bank directly into your bookkeeping software, ready for you to reconcile each day. This eliminates the need to manually post bank transactions (saving time) and reduces the risk of human error.
- Departments – many businesses have multiple trades, however, do not accurately track the financial performance of each trade. Utilising departments within your bookkeeping software will enable you allocate each transaction to the relevant trade with ease. You would then have the ability to run departmental reports to show an individual profit & loss account for each trade (as an example), a valuable tool when making financial and business decisions.
If you would like to discuss any of the above in more detail or require assistance in selecting the right bookkeeping software for you and your business, we would be happy to assist here at RRL.
This article was written by Jade Beech, RRL LLP, published for Cornwall Living magazine, on 16 March 2023 (Page 98): https://issuu.com/engine-house-media/docs/new_flickbook