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Online Accounting Software - Helping Your Small Business

Updated on April 6, 2015
Keeping track of your accounts is vital to running a successful small business
Keeping track of your accounts is vital to running a successful small business | Source

All businesses, large and small, need to manage their finances effectively so that they can prosper. Whether you’re a freelancer, a business owner or simply looking for a way to reduce the time you spend on bookkeeping, there are many accounting applications that can help.

Accounting software has been through some major changes over the past few years, with some excellent applications that run online through your web browser. The benefits and functions that accounting applications can provide have also steadily improved, and they have become an essential part of running a successful small business.

Some of the main features that online, small business accounting software can provide are:

  • Sending out invoices – It’s essential that businesses get paid on time by their clients, and an effective invoicing process makes that much more likely. Accounting software lets you setup an invoice template quickly and easily, so that when a client needs you to do some work, you just raise a new invoice, fill it out and email it to them
  • Chasing invoices – Late payment is a fact of life, but accounting software will let you know exactly who owes you what at any point in time, so that you can chase late payers and stay on top of things. It’s also simple to setup regular billing and keep statements of account for longer pieces of work
  • Estimates – Some clients like to know what they will be charged up front; accounting software lets you send out professional estimates and quotes to clients that you can then easily turn into invoices once they become a paying customer
  • Contact management – If you’re lucky enough to have dozens or hundreds of clients, you need to keep all of their details somewhere. The advantage of storing them in your accounting system is that you can see what they have spent with you and when and the type of work they’ve asked you to complete
  • Projects and work tracking – If you charge by the hour, it’s vital to keep track of how much time you’re spending on a client’s work. Many applications have built in time tracking and simple project functions so you can record time spent on specific pieces of work. This makes billing for your time much quicker and easier, reducing your administration
  • Expenditure – Whether it’s out of pocket expenses or items that your business spends money on directly, like marketing or advertising, small business accounting software lets you record all of your expenses and ensures that they are properly applied to your turnover and profits, reducing the tax that you pay
  • Taxes – Because your accounting system knows exactly how much money you’re taking in, and what you’re spending, you can get a day to day view of exactly how much tax you owe. This makes longer term planning much easier, and ensures that you’re not spending more than you can afford
  • Providing an overview – Good accounting software can give you an immediate overview of the financial health of your business: how much money you have in your bank account, what you are owed and what you owe to others, your main expenses and projects, your tax burden and lots more. This overview puts you in control of your finances, so you can deal with any issues before they become real problems
  • Reporting – In addition to getting a quick overview, you can also find detailed profit and loss accounts, cashflow analysis, balance sheets, aged debtors and creditors, asset reports and journal entries. This type of detailed knowledge will let you see quickly which areas of your business are making a good profit and which areas need to be improved
  • Payroll and dividends – Although it’s vital to take money into your business, it’s equally important that you can take money out efficiently to pay yourself and any employees. Many online accounting solutions also include payroll, so you can generate payslips, pay a salary and more. If you’re shareholder in the business, the software can often handle dividend payments as well
  • Bank account reconciliation – When you’re bookkeeping, it’s important that everything is accounted for. The easiest way of doing this is to reconcile all of the transactions in your business against your business bank account. Many applications will either take a feed directly from your bank account, or let you upload a bank statement to them so that you can then reconcile your bank account against your business records

Of course, not every type of small business accounting software does everything, but if you find the right software, it can really help you out and save you a great deal of time and stress. The world of small business accounting software is definitely worth exploring, so that you can find the solution that works best for you and your small business.


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