So quick question, what is an accounting software and what does it do?
The accounting software helps businesses maintain financial data and display it in important reports
which can help you analyse the numbers of your business and report the data to important people.
Not knowing your numbers is like jumping on a plane without a pilot. You’ll probably crash and burn.
We find that businesses that don't use accounting software tend to not know how their business
is going at all.
Most accounting softwares assists you with invoicing, bills, payments, payroll and taxes.
They also help you generate financial reports.
A lot of startups ask me the question, “Do I need to use an accounting software, Davie?
Because I don't really want to pay for one or my business is too simple and small.”
I answer this question with more questions back to them:
“Look mate, do you want a loan? Or do you want to employ employees? Or do you want to
grow your business?”
It is important for all businesses to utilise their accounting software so they can understand
their numbers and know the following: profit, assets, liabilities, taxes and cash flow.
Businesses require this information so they are able to make the right decisions in their
business. And also, they need to provide this information to third party organisations such
as the ATO, banks, insurance companies and investors.
The banks and insurance companies require you to have financial reports to be sent to
them on an ongoing basis, sometimes quarterly, sometimes every six months, sometimes annually.
The ATO requires you to lodge pay runs via an accounting software, A.K.A Single Touch Payroll.
If you don't have an accounting software, you will have trouble getting a loan for you
and your business. You’ll also have problems with reporting and paying your employee’s
wages, taxes and Super correctly. Then you can get into a whole lot of trouble.
The biggest problem is you make slow decisions for your business. This happens so often for
businesses that don't have their accounting software up to date. They just don’t know
how to make a decision because they can’t decide, because they don’t know their numbers.
Here are a few examples of great accounting softwares for your business.
First one is Xero, which is our preferred software for small businesses. It’s one
of the best softwares for small business owners out there. The pros of this software is it’s
easy to use, cloud-based so you can use it anywhere in
the world, has loads of integrations, loads of businesses also use this software
so you’re not alone.
The cons of this software however, is it can be quite expensive compared to some of the
other softwares out there. It’s also got an ongoing monthly fee, so it can be quite
costly. And no phone call support, so you have to do everything by email.
MYOB is also quite similar software. It’s got a desktop version and it does have phone support.
Rounded is a great software for sole traders. It’s cheap, easy to use, but it’s only
good for sole traders, freelancers and contractors because it doesn’t do double book entry.
Once you have chosen the software for you to use for your business, do not stop there.
You need to learn how to set up the software correctly and use it consistently. There are
so many business owners who choose an accounting software and just don't know how to use it.
Guys, if you don't know how to use it, ask an expert to train you! Pay the money for
the service, it will save you so much money in the future. It's going to take you twice
as long if you don't set it up correctly and make hundreds of mistakes on it. Because your
accountant’s not going to be pretty happy with that. Don’t be a tightass!
So if you have any questions, drop us a comment below and let us help you.