A Breakdown Of Managing Accounting

Accounting software is quickly becoming the only way to keep on top of your company’s financial movements. But, before you go splashing out on an all-singing, all-dancing piece of software, you need to be sure that you fully understand what you’re buying into. For instance, do you know how accounting software actually works? Or, more importantly, that there are types of software that are far better suited to small business accounting than big ones? If you’re thinking of getting software to take care of the money side of things for your business then you might need to brush up on what you know about what’s out there and how it works.

A Breakdown Of Managing Accounting

How it Works

Put simply, accounting software is an application that breaks accounting down into stages, which operate within your main system. It does the numbers by numbers. Most of this software works using a three-ledger system and a chart of accounts.

The three-ledger system basically means that the software makes records on sales, purchases and nominal payments. The sales and purchase ledgers keep records of individual payments to and from individuals, and this is all cross-referenced on the nominal ledger to give details of profit and loss, what you are owed and who you owe to. The chart of accounts is the resulting data, which can be used to make financial projections or to keep tabs on where money might be better spent.

How it Helps

But how can accounting software help a small business? Compared to large businesses, the last thing an SME needs is a time-consuming and cumbersome method of keeping track of where the money is. SMEs in particular need as many hands on deck as possible, so using accounting software that can turn manual tasks into automated processes that only need simple updating once in a while is the most efficient choice.

Good accounting software can even be linked to your company’s bank account, so that every time a payment is made or received, it knows what’s just happened. A similar principle is applied to RTI PAYE. HMRC has introduced this new system to make tax calculations easier. Basically, they want you to let them know every time you pay an employee. Rather than you taking the time to do that yourself, RTI PAYE software does it for you, sending HMRC accurate details of what you paid, to whom, and when.

Accounting packages such as these don’t have to be huge installations. Intuit accounting software is designed to be set up within minutes and is compatible with most existing operating systems. In addition, Intuit accounting software is also designed for people who might not have the first clue about bookkeeping. In the early days of business there’s a lot to keep tabs on, so you want something that’s quick to install and easy to use. Intuit accounting software is used by over 4,000,000 small businesses across the world; a testament to its efficiency and accuracy.

A good accounting package is essential for any business to survive. As well as watching your overheads, chasing late payments and paying your suppliers, there are staff wages to think about – not to mention staying the right side of the Tax Man. However, with the right software on your side, you really won’t have to think about it – it’ll practically take care of itself.