Which is the best bookkeeping system for small businesses

Which is the best bookkeeping system for small...

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Returning to the much debated issue of which is the best bookkeeping system for a small business (lets say up to £12,500 sales and 150 transactions per month)

I have recently set up my practice and have gone full circle from considering recommending Excel to VT to Kashflow to QuickBooks online to Xero to Sage and back to Excel!

Excel upon reflection still seems the best way to make life easy for both the client and the Accountant.

It is easy to set up a spreadsheet. Starting with a Table for each of 12 months. Setting up columns for Money Received and Money Paid Out and then columns off to the right for VAT and to categorise/analyse income and expenditure. The logical starting point is columns for each of the 14 boxes of Allowable Expenses on the Tax Return with additional columns if you want a bit more detail.

The basic tables can be tweaked if the client wants to use accrual accounting by adding sales and purchase ledger columns alongside the cash columns.

Then set up a TOTALS page which automatically adds up the totals for 12 months.

It is easy to lock and password the total formulas and headings so the client doesn't mess things up.

It seems so easy to do and you can see at a glance what is happening on the spreadsheet.

You can also mimic one of the advantages of Cloud Based systems by uploading the file into Dropbox or Google or just emailing it between client and Accountant

I have been on training days for ALL of the online Cloud Based accounting systems and done trial data entry for all of them and basically .. yuk! In spite of claims that they are intuitive and easy to use for non accountants I just don't see that! They can seem clumsy and prone to input errors which are hard to correct and data entry can be painfully slow and it is easy to mess up; also you often can't see whats going on until you produce a report.

Another problem is that pricing structures for Accountants are becoming increasingly complicated.

VT seems to have a lot of fans but is it really any easier than Excel and you can still see more as you go along with Excel.

It seems to be an area where companies have invested millions in trying to reinvent the wheel when there wasn't a lot wrong with the original wheel (EXCEL) for small businesses.

Are there still any EXCEL fans out there. If so which is the best EXCEL package beyond my own simple spreadsheets?

Replies (6)

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By howdomonty
13th May 2014 13:23

it doesn't matter what the client uses - as long as they have the inclination to do their bookkeeping correctly and work with the system its a blessing

 

if they can't be bothered to use it correctly or dedicate the correct amount of time to it, no matter what system you use it will end up in a mess

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Replying to Kaylee100:
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By rich@home31
13th May 2014 13:55

I don't think there is a definitive answer to this one.

In my opinion you have to assess your client and set up a bookkeeping system that suits them and also works for us as accountants.

For example the majority of our clients couldn't use dedicated software like Sage, Quickbooks and VT etc  as they are simply too advanced for them to understand. In these circumstances we encourage the use of Spreadsheets or manual cash books to keep it as simple as possible.

 

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Teignmouth
By Paul Scholes
13th May 2014 16:33

Have you really trained on ALL the Cloud based accounting system

What all two dozen plus?  I've trained on 4-5 and my brain said no more!

I moved my Excel clients to FreeAgent 5 years ago and won't now take on a client unless they use the Cloud.  No matter how well you set up spreadsheets for clients (and I've tried every variation over the past 20 years) they will make a mess of them at some time or another, which, quite often you don't see till they email them over, whereas with online stuff you can login as often as possible and, whether you think them cumbersome or not, they automatically  "do" double entry and so you get a TB that balances.

I'm now a convert to Clear Books as, I do some work for them and find it easier to tailor to small/large, simple/complicated clients than the others, but for a rock bottom easy to use system, for people who only use Spreadsheets and don't want or need to know about debits & credits I'd be surprised if FreeAgent was not worth a try.

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By pr27
15th May 2014 13:18

FreeAgent

I'm a FreeAgent convert and sing its praises to all that will listen. I've got about 50% of my clients on it now and it's pretty hard to go wrong with it. It automatically pulls through your online banking feed and you just click and allocate the payments/receipts accordingly. 

If they're inclined to use the purchase and sales ledger then they are relatively straight forward and certainly more advanced than Excel. It also caters for Payroll if you want to carry out these functions on your client's behalf and allows automatic ledger postings from this. The VAT tool is again easy to use. You have access to your client's records at any given point so can check in and make sure they're doing OK or they can ask for help and you have that direct access.

At year end, you at least get a balanced TB which is more than you get (in my experience) from client's own Excel spreadsheets which need reconciling to bank statements and fiddling with just to get them to balance.

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By Hayter
15th May 2014 14:06

Cashflow Manager is a very simple and easy to use package. It's cheap, looks and feels like a spreadsheet and produces a trial balance that can be imported straight into your accounts production software. It also does VAT providing a report that is then simply entered into the returns. Great for small businesses and cash retailers but will cope with a little more sophistication including trade ledgers. No accounting knowledge is required by the client which allows them to stay up to date with their administration and invest more in value added services.

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By Karen Bennett
02nd Sep 2014 14:36

Small Business Clients

We use Xero and for us non accountants it is user friendly in terms of creating invoices, purchase orders and managing all the reports. Have a look at these two threads. VT does seem to come up time and time again as a good software for small businesses too.

https://www.accountingweb.co.uk/anyanswers/question/what-software-do-you-recommend-clients

https://www.accountingweb.co.uk/anyanswers/question/best-software-small-businesses

Also if you just set up in practice and have any incomplete records clients that give you their bank statements to process for them there is data extraction software called AutoRec you might be interested in?  AutoRec will extract the transactional data from statements and create a spreadsheet for you with those columns you mentioned; date; description; debit; credit and a running balance column also. For the other analysis you mentioned those columns are also in place for VAT; Account code; account description; VAT received; vat paid. If you add a chart of accounts to AutoRec you can quickly automatically populate these columns. You can total your data by any of those fields and export. There is an export for accounts software systems such as Xero, VT, Sage, Quickbooks and many more. It’s easier to show you. If you are interested in seeing a quick online demo click here. It takes about 15 minutes where we can take you through a sole traders set of accounts.

In relation to sharing files with clients, we are also moving our internal files over to Google drive to share files with each other. Dropbox (which we also use) is good too but it’s not free!

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