Accounting for Your Business: DIY or Use Software?
When it comes to your accounting, do you take the manual or the automated road? It really comes down to two choices – a DIY process or using accounting software. Let’s imagine two scenarios, with two different small business owners. We’ll call the first one “Bob”.
Bob and his books
Bob runs a company selling fishing supplies and likes to do things his way. He doesn’t outright reject technology, but he doesn’t think it’s the cure-all to every modern business woe.
Bob likes to feel in control. He likes his own methods and his own routine, and he’s used to them.
Each morning, Bob gets to the office and deals with a few urgent emails. Then he settles down, and goes over his books. He got himself set up with Excel a few years ago, managing to copy his paper ledger onto his computer. He made a few typos but nothing catastrophic.
Banking: Bob knows how to add up columns of figures in Excel, though he keeps a calculator on hand just to double check. This has saved his skin a few times. He logs onto his bank, checks his accounts, and enters in any amounts of money received into his spreadsheet, as well as the date and the client.
Invoicing: For his invoicing, Bob goes through emails to figure out what’s due. Then he uses Word to create invoices, typing up the relevant figures from his Excel spreadsheets, attaches the invoices to emails, and sends them off.
Overview: At the end of each month, Bob gets all of his spreadsheets together, and compiles a report to see where he is compared to the previous month. This involves a bit of fiddling around, some cutting and pasting. He goes through old emails to try and figure out which invoices haven’t come in, so he can send a reminder.
Now it’s lunchtime, and Bob can sit back, enjoy a quick sandwich, and get down to actual work in the afternoon. Due to having to do everything himself, he’s usually in the office until about seven o’clock each evening.
Now let’s consider scenario two, “Amy”:
Amy and her accounts
Amy imports pet grooming products, which she sells to a range of veterinary surgeries and dog parlours. She doesn’t have an IT background, in fact she didn’t even study any computing at school. She’s had to pick up bits of knowledge over the years, but she manages the basics fine.
A year ago, Amy decided to try cloud-based accounting software. Her accountant suggested it would keep her accounts in better order, so she took the plunge. It was easy to set up, and she just logs on and it’s ready.
Each morning she starts her computer from her home office, and checks her emails. Then she starts her accounting software.
Banking: Amy doesn’t need to log into her bank each day to check the status of her business’s finances. Her software enables automatic bank feeds, so any bank transactions are immediately fed into the right accounts and get sorted by category.
Invoicing: With so many suppliers and end customers, invoicing used to be very time consuming for Amy. It was hard to keep track, while also sending money overseas. Now Amy’s accounting software does this for her. So she doesn’t really spend more than a few minutes on this most days.
Overview: Whenever Amy logs in; her dashboard automatically generates a bird’s eye view of her business, with its bottom line updated in real-time. It can also spit out monthly, quarterly, half yearly and annual reports: whatever Amy wants really.
A quick glance tells Amy that everything is fine, so with three hours to go until lunch, she does some work on a marketing campaign, has a teleconference with a potential partner, researches some new product lines and meets with a valued end customer.
She’s got so much done that she can leave the office early today, and go and play tennis. She is waiting on one payment to come through, but she can check that after her tennis game as her accounting software is accessible on her mobile.
Ask yourself what you want your working day to be like. What kind of work-life balance do you want? Because you don’t have to do it all yourself any more: technology is happy to unburden you.