The top five features to look for in accounting software for small businesses

When starting out in business, or if your accounts are relatively simple, it may be the case that a spreadsheet will suffice when it comes to managing your finances. In the longer term, however, this manual process will become time-consuming, prone to errors and quite possibly a chore you want to avoid. Accounting software takes the stress and complexity out of managing small business finances, offering advantages and adapting as your business grows and develops.

Why do small businesses need accounting software? 

When running a small business, there will be numerous pressures on your time, and, while thoroughly managing your finances is essential, it’s not something you want to spend more time on than is necessary. This is where accounting software comes in. Accounting software is a major time saver Compared to manually recording your income and expenses, creating invoices, chasing payments, and meeting your tax and regulatory requirements. It also means you’ll have all the data you need in one place rather than juggling multiple documents. 

As your business generates more and more financial data, accounting software will enable you to access the data you need quickly while being confident it’s accurate. This, in turn, can help you to use the data stored in your financial records to make better business decisions. For example, if you want to invest in new offices, machinery or people, you can see if your finances support this. You’ll also be able to quickly generate reports into areas such as expenses, revenue or profit and loss so you can assess your performance, identify any trends and create more accurate forecasts.

If your business handles stock, accounting software can have a huge impact thanks to inventory management and stock control features. With AccountsPortal, for example, you can track stock, create price list items for products and services, and drill down into each stock item over any period with detailed reports.

How to choose the right small business accounting software 

Before deciding on accounting software, it’s worth taking some time to assess your needs and evaluate the options available to ensure you make a decision that works for your business now and in the future. For example, think about the size of your business, the complexity of your transactions, the number of employees, and the types of financial reports you’ll need to generate.

Also, consider what you spend a lot of time doing and look for a software package to simplify this. For example, if you send a lot of invoices or have clients that are slow to pay, look for software with automation features. Also, consider if you need support with inventory management, payroll processing and bank reconciliations. Not all accounting software offers these features, so choose one that does. 

Similarly, be aware of your budget for this – there’s no point in paying more than you need to for features you won’t use, so have an idea of a price point that works for you.

Once you know what you want, it’s time to start researching the options. There are many potential packages out there, so look for independent reviews and platforms that HMRC has recognised as Making Tax Digital compatible and by independent organisations such as the ICB. You may even get a free trial of your preferred option so you can be certain it meets all your needs before you commit to it. 

One thing often overlooked when investing in accounting software is whether your provider has robust security and data protection policies. Remember, you’ll be entrusting them with some of your most important data and your finances, so be sure it invests in keeping this safe. Things to look for here include data encryption, server protection, regular offsite data backups and user access controls.

Key features to look for in small business accounting software

So, what are the five must-have features to look for in your accounting software?

1. Easy setup and use 

Perhaps the most important feature of any software is that it’s simple and intuitive to set up and use, and it doesn’t require significant training or major learning curves to get up to speed with its key features. AccountsPortal’s quick start wizard means you’ll be up and running without needing to install or download anything. Updates are free and automatic, so you can be confident you’re always using the best version of the software.

2. Multi-user access 

While it may just be you using the software, to begin with, it’s important to invest in a platform that’s scalable and can grow as your business does. So, suppose you employ a finance team or outsource your accounts to a bookkeeper or accountant, or you use the services of a financial adviser. In that case, you need to be sure they can all access the right information whenever required. AccountsPortal doesn’t charge for additional users, so you can invite all key stakeholders to join you. Importantly, you can also set individual permissions so users can only access the information you want them to see.

3. Cloud-based software and mobile access 

No matter how many people can access your account, the chances are they’ll all want to do it from different locations – whether that’s from the office when working remotely or even when travelling or on the move. This is where cloud-based software proves invaluable, as it is accessible on any device and from any location with internet access; plus, you don’t have to wait for files to download – everything is exactly where you would expect it to be.

4. Timesaving automation and integrations

From setting up recurring invoices to connecting all your accounts and cards to sync your transactions automatically, there are numerous ways automating regular processes can save you time and make your business more efficient. Features of AccountsPortal include automated bank feeds, online payments integrations and the ability to create invoices automatically from purchase orders.

5. Tax Preparation

One of the more demanding aspects of running a small business is keeping on top of your tax obligations. A key part of this is making sure your records are maintained accurately throughout the year so that you have easy access to all the information you need when it comes to reporting time. Accounting software can take the pain out of year-ends and make VAT returns a breeze. AccountsPortal can also handle all VAT scenarios, including Standard, Flat Rate, EU Digital Services, VAT MOSS, and more, as well as VAT accounting in any country, which is particularly useful if you sell internationally. You can also create custom tax rates at any time. Automatic submission to HMRC is even possible for UK customers.