Accountancy software for beginners

[Ritchiec80]

Firstly a big hello to everyone!

I run a growing part time photography business whilst also working full time, I've always just done my self assessment online and kept track of income v expenses via a simple table in word. As I've started to grow I've started to use Sage One Cashbook which is pretty good for what I want (all I really want to do is record cash flow). My problem comes from when it wants to link to a bank account. I have an account that I use for business but the money in it doesn't always match what the cash flow says as although some insurance is part of the business cash flow I pay it out of my own money and often I send on invoice at a set date but only a deposit is taken and the rest could be taken over a year later hence the cash flow and bank statements do not match. What is the best way to record this? Hopefully I've explained this enough for someone to know what I mean.

Many thanks

 

[Scalloway]

You need to include all bank transactions in Sage. Personal expenditure is classed as drawings.

Expenses paid from other sources can be included by doing a journal entry. The other side of the entry is Drawings.

 

[Philip Hoyle]

As I've started to grow I've started to use Sage One Cashbook which is pretty good for what I want (all I really want to do is record cash flow).

There's the crux of the matter. You DON'T just want to record cash flow as you've now found out. Any "cash book" program won't do what you need it to do. You need a piece of software that allows for timing differences between invoices and payments, i.e. sales and purchase ledgers. This would then allow you to enter your sales invoice when you raise it, but to be able to record and allocate different payment amounts/dates against it, thereby allowing you to track unpaid invoices and provide the "balance" between the "invoice basis" and the "cash basis". I.e. you do need proper book-keeping software not a "cashbook" hybrid.

Try Quickbooks online instead which has full ledger facilities - cost should be under a tenner a month if you get it through an accountant. It records the invoices against payments, you can use it to create statements to send to customers to remind them to pay, and best of all, you can do all the reports on either a "cash" or "invoice" basis, i.e. P&L account etc., so you can generate what is effectively a cash flow statement and also generate a profit & loss account on the invoice basis, so best of both worlds.

You're always going to have to compromise if you use any form of "lite" or "cashbook" type of book-keeping software, which is fine if you have very simple needs, but as you've found out, a growing business soon outgrows them and you end up having to move onto proper software anyway.

 

[Ritchiec80]

Thanks Scalloway, I'll take a look at that. What is the best way to make sure things match up with regard to an invoice being sent but only a deposit being taking with the rest being taken over a year later? I'm a wedding photographer so an invoice will be sent, on that day the full amount will be added to cash-flow (for tax) but only a deposit is taken with the rest due sometimes in a different tax year? I'm a bit stumped to how to work this one...

 

[Ritchiec80]

Thanks Phillip, I will take a look. I am just running a trail of cashbook at the moment so can ditch anytime in the next 30 days.

 

[MyAccountantOnline]

Thanks Phillip, I will take a look. I am just running a trail of cashbook at the moment so can ditch anytime in the next 30 days.

Some self employed people can use a cash based system see here but if you use more traditional accounting you need to either use a full ledger system or adjust for debtors and creditors at the end of your accounting year.

 

[Ritchiec80]

Do you think Quickbooks Online Simple would be sufficient?

 

[MyAccountantOnline]

Do you think Quickbooks Online Simple would be sufficient?

I used to use QuickBooks a long time ago but don't use it anymore so sadly cant comment on that but I'm sure someone else can.

I personally use Accounts Portal and think it's great. I also have a lot of clients who use it and find it a great package to use, may be worth a look.

 

[Scalloway]

Thanks Scalloway, I'll take a look at that. What is the best way to make sure things match up with regard to an invoice being sent but only a deposit being taking with the rest being taken over a year later? I'm a wedding photographer so an invoice will be sent, on that day the full amount will be added to cash-flow (for tax) but only a deposit is taken with the rest due sometimes in a different tax year? I'm a bit stumped to how to work this one...

You should use your software to create an invoice and set payments received against it in the debtor's account. If it is for work that will only be done in the following year you will need to reduce your sales by the amount invoiced and put it to income in advance on the balance sheet.

 

[DavidHoul52]

I'm currently using Quickbooks Online and I'm very happy with it. There are some minor issues with linking back and forth from the Payroll bits - just refreshing your browser fixes it.

 

[Pish_Pash]

It's a thing of mine, but I reckon for a new fledgling business, any subscription based offerings should be avoided like the plague, therefore I would buy the desktop offering of Quickbooks...

http://www.ebay.co.uk/itm/Intuit-Qu...ting_Software_Software_SR&hash=item418dfe505c

....same annual cost, but after the first year, you're in pocket (& you only need to upgrade every few years)...also typically when it comes to online vs. desktop, the desktop versions are more feature rich.

 

[DavidHoul52]

Does it come on a disk? I've found that its often difficult to find a download for the same version of a package if, after a year or two your hard drive fails and you need to reinstall.

 

[Pish_Pash]

It comes on a physical disk.