Posted by: Mike Parkes
Regardless of its nature, accurate financial record-keeping is essential for every business. It is one of the elements that make your enterprise a success. As a Driving Instructor, keeping good accounts is just as important as a good diary keeping system or making sure your car is kept clean and tidy.
Your accountant will much prefer orderly information. It will save time for them, and may even help bring your fee down too. If your records are already complete it makes preparing your end of year accounts and tax return quicker and easier. Good bookkeeping has other benefits to your business:
- Good financial information can help obtain a business loan.
- Having a reasonable estimate your profits makes it easier to plan for tax you have to pay.
- This can make it easier to avoid unnecessary tax penalties or interest.
Unfortunately, bookkeeping is time consuming. Or it can be. In the past, it was all done manually, but thankfully those days are gone – most bookkeeping is done on computers now.
Most simply you can use something like Excel to create a simple spread sheets. If you know how to use them, these can work for simple figures. For more detail though, they are limited.
The next step up is dedicated accounting or bookkeeping software. This has lots of benefits;
- You can see your records easily at any time
- Changes can be made easily, and mistakes rectified
- You keep your records in a standard format
- All the calculations are done for you
- There is a record of all your transactions that you can refer to easily
- Reports can be created instantly
The problem is, most of this software was designed for the accountant, and it can be hard to use. It also suffers from the disadvantages that all ‘traditional’ software has, such needing lengthy installation and becoming obsolete quickly.
Recently there has been move to online accounting software.
It works quite differently from traditional software. The crucial difference is that the program is held centrally, on a large server, and is accessed over the internet.
The way accounting software works – you enter information and save it for later – is ideally suited to this type of method. Amongst the benefits of any online system are
- You don’t have software to install
- It’s always the latest version
- Backups are automatic, so your data is safe
- You can access your records from any computer at any time
- It is very secure
- It is generally much cheaper
Don’t forget though, that all the usual benefits to your business of using accounting software still apply.
- Every business or sole trader needs to keep records
- Any form of bookkeeping (if done well) is better than none at all.
- Using computers is much more efficient than manual books.
- Accounting software can help but is complex and has limitations.
- Online software solves many of the problems of traditional software, but retains the benefits.
This may sound too good to be true, but it isn’t. Online accounting is here and available now. It could really help your business and save you money.
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