Accounting in the cloud?

[awesomeliz]

We are a newly incorporated Ltd company, and I'm currently looking at options for managing our accounts and tax. (Our registered address is in Wales where one of our directors is located but I will be managing this side of things and I am based in South West London)

I'll be honest that my first approach was just to find a local accountant but since reading some of the threads on here it has occurred to me that I wouldn't do this for anything else these days, so why do this for accounting? I am slightly nervous about this approach, as I don’t know anything about this arena, and I don’t know which brands/websites to trust?

Does anyone have any advice about this? Or any recommendations on where I can read up about the options out there?

Is it feasible to use an online accounting software and still employ an accountant (local or online, still undecided) who will have access to the info in the cloud?

 

[Raw Rob]

Is it feasible to use an online accounting software and still employ an accountant (local or online, still undecided) who will have access to the info in the cloud?

Yes, of course. That's what I do. It's one of the best aspects of cloud accounting, my accountant and bookkeeper can access the same data as me from different locations.

 

[MarkHopkins]

Is it feasible to use an online accounting software and still employ an accountant (local or online, still undecided) who will have access to the info in the cloud?

Yes. Also your accountant may be able to get you a discount if you join via them, so do ask.

Xero is often recommended.

Or there is Kashflow - a UK based company.

You put your transactions into the system, and then the accountant can just access everything directly..

 

[PipeTen-Carl]

I'd contact accountants first, then find out what cloud/online accounting service they prefer (as they all work a little different). I think this is a better approach than choosing your accounting package and then trying to find an accountant familiar with it, for the best efficiency / cost. We use what our accountant recommended, after doing due diligence on the security and stability of the third party.

 

[john1989]

Speak to Nicola @MyAccountantOnline

Very knowledgable and runs an online accountancy service.

 

[kevin.doran]

Hi Liz

I completely agree with @PipeTen-Carl here, find the accountant first then talk software. Fair enough, some will argue we should all have the ability to work with whatever software's put in front of us, but i'm a strong believer in sticking to what you know best. In saying that, the software I prefer to use (ClearBook) might not be the best solution for you in which case i'd let that be known and try pointing you in the direction of somebody better positioned to help.

That aside, with the likes of Skype etc these days, online is just as good (if not better) than face to face meetings. I've not met the majority of my clients (I do try to have the odd jolly out to see a few but time's precious) but that isn't detrimental to the relationship or the job at hand.

Do you know anybody else who runs a business? If so, seek their recommendations, that's always the best starting point in my opinion.

 

[Raw Rob]

I'd contact accountants first, then find out what cloud/online accounting service they prefer (as they all work a little different). I think this is a better approach than choosing your accounting package and then trying to find an accountant familiar with it, for the best efficiency / cost. We use what our accountant recommended, after doing due diligence on the security and stability of the third party.

I'd recommend the reverse of this. As each cloud accounts package is different I would say it is best to try a few out and see which one you like working with and which one fits your business needs (eg do you need it to link to a particular ecommerce package or other business software). Then you can find an accountant who works with this software.

(As mentioned above, if you choose an accountant who already works with your intended package, they may be able to get you a discount on it.)

 

[Energise Accounting]

Hi Liz
The first thing to think about is what do you want the software to do?

we normally offer our clients a choice from 4 different products dependent on their needs.
1. capium cloud based software is very good for service based businesses and any business that dose not need to monitor stock. which is totally free and you also can use the payroll software for up to 3 employees however, our clients can have payroll free for up to 50 employees

.2. Xero is a very good and a versatile piece of software however, we believe it is not the best for our industry clients as by the time you pay for all the various add-ons required it can work out expensive.

3. Sage is very good for our clients who are involved in industry apart from the detailed stock functionality it is very good for people who use factoring. and all though you have to pay for it their customer service is far better than the competition. Sage also have a cloud based service offering as well.

4. Bright Pearl is one we use for our retail clients who sell in many different ways e.g they may have a shop, sell on eBay and amazon plus their own website. the software will collect and post all the sales data, manage stock and record all your receipts from every sales channel you use.

 

[awesomeliz]

You've given me a lot to think about. I will read through this properly and respond to some of the questions tomorrow but I just wanted to say thank you for the great responses! They are very much appreciated.

 

[MyAccountantOnline]

Speak to Nicola @MyAccountantOnline

Very knowledgable and runs an online accountancy service.

Thank you very much John - really appreciate that.

 

[AlanGuidry]

Is it feasible to use an online accounting software and still employ an accountant (local or online, still undecided) who will have access to the info in the cloud?

Yes that's pretty much what most accountants do these days. You will have access to a cloud based book-keeping package (either an independent stand-alone one or a custom-software package built by your accountants) and will be largely responsible for logging in and maintaining the books, with the "real life accountant" then having access to your cloud book-keeping so they can check it, file your accounts etc. This kind of service tends to be a little cheaper as you're expected to do a lot of the work yourself (ie the bookkeeping). Many more traditional accountants do everything for you including much of the book-keeping, but if your business is pretty small then doing the books yourself needn't be a chore especially if you can get into the habit of doing it regularly. Get advice on which software package to use as some are pretty basic and others I've seen I think you'd need a degree in finance to understand!

 

[awesomeliz]

I think I will try and access some free trials/demos of some of the packages you have recommended/mentioned above so I can see how they feel and whether I understand them.

At the same time I will start looking for an accountant online.

Thanks for all the advice so far. My next hurdle is working out dividends vs salary, and setting up a shareholders agreement!

 

[Energise Accounting]

shareholders agreements should be done by a solicitor and as for your salary Vs dividend your accountant will advise you appropriately however, the rule of thumb is £10,000 salary and the rest in dividends.

 

[awesomeliz]

Thank you. I think I worded that incorrectly. I already work full time in addition to the new company, so I need to understand the tax rates for taking dividends in addition to my salary. I guess as you say, this is a question for my accountant when I find one. I do however find it very daunting that I am just going to have to pick an accountant (albeit with the correct checks etc) and hope they are a good one!

 

[Energise Accounting]

The best way is by recommendation from friends or go to a local networking event you will always find a few accountants who attend them on a regular basis.

 

[euphbasio]

A bit late on this, but I would suggest always checking to see if you can save/backup your data before signing up to any cloud software. We used QuickBooks online for a while, but outgrew its capability. We couldn't save or export our data.

We moved to sage which now has SageDrive, allowsing remote syncing, and of course you control your data.

Just a thought.

 

[Caro_S]

Hi Liz
The first thing to think about is what do you want the software to do?

we normally offer our clients a choice from 4 different products dependent on their needs.
1. capium cloud based software is very good for service based businesses and any business that dose not need to monitor stock. which is totally free and you also can use the payroll software for up to 3 employees however, our clients can have payroll free for up to 50 employees

Capium sounds very interesting! What's the catch? We're a small business essentially but with a complex structure (sole-tradership + pension scheme + limited companies). Most packages would make us buy multiple licenses therefore it becomes very expensive for a small family company. But nobody gives something away for free, surely?!

 

[Energise Accounting]

no catch it is free. we use it for 75% of our clients. however, if you have more than 3 employees you have to pay for the payroll software unless you have an accountant who uses Capium.They want accountants to sign up with them for the accounts production and tax software that is where they make their money. I use it for all my accounts production and tax filing

 

[Caro_S]

Thanks,
I have a call booked with one of their sales guys for Monday morning. In the meantime, have you any idea whether you can import date from the likes of Microsoft Office Accounting 2009 or Sage Instant Accounts?

 

[Energise Accounting]

You can import data using csv files.

 

[AlanGuidry]

as for your salary Vs dividend your accountant will advise you appropriately however, the rule of thumb is £10,000 salary and the rest in dividends.

Certainly keep to less than £10k in salary if you don't want to incur NI !
@awesomeliz - if you already work and also want to establish a business then speak to your 'new' accountant as they will be able to look at the most efficient way to split your salary vs dividends based upon your particular situation.

 

[Energise Accounting]

@AlanGuidry in my opinion it is always best to use your full tax free allowance. The amount of NI you pay is minimal and it will make sure you are still entitled to your old age pension and benefits should things go wrong with your business.

However, for the OP situation it is different as she has a fulltime job and her accountant would advise appropriately.

The main purpose for setting up a Ltd company is not save tax but to however, have protection from your creditors if things go wrong.

 

[ldjames]

I can't recommend Xero enough. The intelligent bank feeds are a massive time saver, it's easy to use, there are mobile apps and an API to hook in with other software.

 

[kevin.doran]

Certainly keep to less than £10k in salary if you don't want to incur NI !
@awesomeliz - if you already work and also want to establish a business then speak to your 'new' accountant as they will be able to look at the most efficient way to split your salary vs dividends based upon your particular situation.

£10k is the most tax efficient position this year bearing in mind the NIC employment allowance.