Do I Need Accounting Software To Do My Bookkeeping?
We’re often asked, ‘do I need accounting software to do my bookkeeping?’ We usually try to explain what “need” means rather than just give a yes or no answer.
If you don’t want access to your financial results, you’re not interested in whether you owe someone more or less than you did last year and you enjoy spending hours and hours doing your bookkeeping, no – you don’t need accounting software.
Making Tax Digital
The government’s ever developing position gives some idea of where we’re all heading, which is absolutely in the direction of being mandated to use software. Making Tax Digital for VAT was the first stage in this move in modern history – where anyone who turns over in excess of £85k per year must now file their VAT using a tested and approved piece of software. So those who turn over less than £85k are in the clear for now, being able to use whatever method they like to keep their books.
Using software isn’t just one of those changes that simply increases red tape by the government though; it’s actually far more beneficial for other reasons, and the government’s direction is nothing to worry about really.
For instance, simply having access to your financial information should be enough of a reason to get software implemented. But, if you’re someone who knows their business inside and out – for instance a mobile hairdresser who knows that their profit is pretty much linked to their turnover, there are still good reasons to digitise. One good reason for this is that it takes a fraction of your (and your accountant’s – see later!) time to keep your records. Instead of sitting down every Sunday evening for three hours adding up sales, with a good piece of software this might become an hour every few weeks.
And following this, if you hand your accountant a box of receipts, do you really think their fee will be the same as if you shared access to your perfectly balanced accounting software? Not a chance! We have to factor in our time that it’ll take to get your figures to the point where accounts can be produced. And if it means we have to sit and add up your receipts, it’ll take longer and therefore cost more.
So you might have lots of reasons not to use software – but we haven’t heard a reason yet that really stands up to scrutiny! And happily, MNE is well versed in all the leading bits of kit available to you, so we’ll be able to retire that spreadsheet sooner than you think!