For you to be reading this article, one of three things must have happened: one, you have heard about online accounting software vaguely, stumbled upon this article and decided to read it to know what the fuss is all about. Two, you have recently decided to adopt accounting software. Three, you have online accounting software but made a poor first choice and now you would like to make a more careful selection.
What is online accounting software?
If you’re only just wrapping your head around online accounting software, this is what you must know: online accounting software is an end to end business solution that eliminates manual data entry, sorting and categorisation. It automates invoicing and business insights delivery and can help you maintain error-free always updated books of accounts. It also allows for live, on the go access to your business’s financial data. Tedious tasks like reporting and expense approvals are minimized down to a couple of clicks.
Understanding costing for online accounting software: budgeting and benchmarks
The best online accounting software even comes with a free trial so that you are sure that you are making the right choice.
Additionally, you can opt for a pay as you go model so that you keep your upfront investment at the minimum. A second option – if you are still unsure after the free trial – might be to opt for a monthly package until you are sure you want to stick with a particular plan.
If you are sure about a certain brand after you have concluded your free trial, it might make sense to opt for a pay as you go annual package as you get a better per month rate and sometimes, additional freebies. Dext has an offer for two months free with an annual subscription.
Dext being a business tool; top-ups can qualify as tax deductibles.
In terms of benchmarks, you can use Dext pricing as a yardstick: you pay GBP 20 for 5 users and 300 scans per month, GBP 40 for 20 users and 3000 documents per month, GBP 60 for 30 users and 4000 monthly scans.
Free online accounting software might be tempting but remember that every business has a business model and profitability goals. If they aren’t earning through subscriptions, then advertising is going to be heavy and possibly distracting.
What selection criteria should you use?
There is a wide choice of online accounting software brands, all vying for your attention. Even if you eliminate the free ones, you still need to sift through various solutions to choose the best online accounting software. This handy checklist might help:
Online accounting software should give you invoice templates that can be customised to include your logo and your type of invoicing details.
You must be able to customise the metrics that show up on your dashboard so that you can view KPIs that actually are performance indicators for your particular line of work.
It is absolutely essential that online accounting software integrates with the accounting and bookkeeping software being used.
Look for online accounting software that can bring convenience to the table by automating:
- Invoice generation
- Business insights delivery
- Categorisation and sorting of data
- Seamless data flow from the business bank account to books of accounts
- Data entry by receipt scanning, which is able to extract data from any source document uploaded in a wide choice of formats
It is imperative that you are able to keep paying for your software. Check the rates before signing up and be sure that you can afford the cost.
UK tax support
Your online accounting software should be able to add relevant UK taxes to invoices and to note these taxes while extracting data through receipt scanning. The best online accounting software will also tell you how any upcoming taxes might interfere with your bottom line.
Although this criterion is especially beneficial to bookkeeping firms, businesses who have frequent audits related to financial data management, and companies likely to have their financial data scrutinized prior to an IPO or by private investors, might also benefit from it.
We are talking about a tool that allows an at-a-click check of the condition of a business’ books of accounts. Of course, bookkeeping services in USA can offer appropriate pricing and depict progress and, it can also be a great way to ensure that you are ready for stakeholders to go through your data with a fine-tooth comb.
Avoid accepting anything less than double firewall protection.
Do you get a client dashboard and is it customisable?
Do you get spontaneous business insights and how useful are they?
Is your data kept safe as per UK norms for a period of 7 years?