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Spreadsheets are great for simple tasks but just don’t cut it when it comes to your small business accounting. Here’s how your business will benefit from a better bookkeeping solution.
When it comes to your small business finances, it can be tricky to decide the best way to stay on top of your accounts. Some freelancers and small businesses try using spreadsheets to manage their bookkeeping - after all, they’re free and often the first thing that comes to mind when you need a quick solution for storing and organising data.
But, under scrutiny, spreadsheets can’t provide busy small business owners with everything they need to run their businesses easily and effectively. Here’s why switching to an online accounting solution will help your business.
When it comes to the security of your business finances, it’s not worth taking risks. If you’re using spreadsheets you’re probably saving them locally on a PC or laptop, so if your machine stops working they might be irretrievable. If you send your spreadsheets by email, for example to an accountant, they’re even more open to risk whether it’s from emails going astray or being exposed to viruses on a third party’s computer.
With online accounting solutions, there’s protection built into the software. If you opt for cloud-based accounting software then your data is securely stored on remote servers, so you can safely access your accounts at any time and from any device. Many software solutions have bank-level security and also securely backup your data several times an hour, so you never need to worry about losing sensitive financial data again.
With spreadsheets, you can record money in and out, do some basic sums and generate some graphs and reports if you’ve got the time and the know-how. For some simple tasks, this is all you need. However, for your small business bookkeeping you’ll save yourself time, money and stress by choosing an online accounting solution that can actively do the hard admin work for you.
Depending on the software you choose, it could cover sending and chasing invoices, expense recording, time tracking, running payroll, building reports, integrating bank feeds, tax return submission - the list goes on and on!
Tax season is stressful enough, but when it comes to tackling your tax returns with a giant spreadsheet and plastic bag full of expense receipts you’ve really got your work cut out for you. If you work with an accountant and are emailing a spreadsheet back and forth there’s also the added risk of version control problems and errors creeping in.
At tax time the added assistance that online accounting software can give you is invaluable. Some online accounting software solutions will show you at a glance how much tax you owe and when it’s due (no nasty surprises at tax deadline time!). Depending on the software you can also file VAT and Self Assessment directly to HMRC through the software itself, so your tax return process is as straightforward as it can be.
Spreadsheets actually suck up loads of your precious time - you have to enter all the data by hand, most processes can’t be automated and you have to carefully double-check all data to prevent rogue errors from messing up your accounts. Your hours are much better spent doing the work you love and earning money.
With online accounting software you can save yourself time on a daily basis by easily sending and automatically chasing invoices, snapping photos of your expense receipts on the go, and generating reports on the financial state of your business at the click of a button.
If you have to spend hours inputting data, hunting down expense receipts or tearing your hair out at tax time when you could be doing the work you love, then ‘free’ spreadsheets are actually costing you money.
With a spreadsheet you’re on your own, but with FreeAgent our dedicated support team are with you to help every step of the way. FreeAgent’s online accounting software is specifically designed for freelancers and small businesses - give it a try today at freeagent.com and see for yourself how much easier it can make your life.