What Are The Best Accounting Tools For Start-ups That I Can Recommend To My Clients?
For many start-up business owners, keeping an eye on the accounting side of the operation is daunting. Many will have had a go themselves, sometimes with only limited success, before coming to you for help.
Whilst you’re there to support all your clients with their more complex financial issues, the day-to-day book-keeping operations will likely be managed by them. This means it’s well worth having a broad knowledge of the popular accounting tools out there that start-ups can use to meet their needs and their budget.
Start-ups should first consider what they need the platform to do
Every start-up will have different accounting needs and priorities. Some will put a strong emphasis on monitoring inventory, while others will need more detailed receipt-tracking and tax management elements. Before you jump in to recommend a specific platform, it’s worth start-up business owners making a list of their accounting needs and prioritising them from least to most important.
The next thing to consider is what goals the software will need to meet. It’s tempting to get carried away with all the bells and whistles a shiny new accounting software tool has, but if it mostly offers things they don’t need then it’s not really much use.
Important questions that start-ups should bear in mind
It’s a good idea to mention these four key questions to any start-up owners that approach you for accounting software advice. They can then bear them in mind as part of their considerations:
- How is data backed up?
- What kinds of businesses tend to use the software?
- What customer support is available? For example how do I raise an issue and how quickly can I expect a response?
- Does the platform support foreign currency payments and convert them into sterling? (this one is very business specific and may not be needed by everyone)
To free or not to free?
Everyone likes free stuff, and for start-ups money is often tight which makes free software options particularly desirable. However, whether a start-up business owner opts to use a free accounting tool or a paid for service depends again on their needs and preferences.
There are several providers offering free accounting software, including GnuCash and Wave. We’ve taken a look at these and others below.
Wave is free to use and is extremely popular amongst very small businesses. Aimed at start-ups, freelancers and entrepreneurs particularly, it’s an easy to use web-based accounting system with a well-organised interface. Packed with a good selection of accounting features (even though it’s free!) means business owners can manage their cash flow from anywhere 24/7. There are some handy little timesaving features too, like recurring invoices and automatic payment reminders.
Intuit QuickBooks is one of the longest established cloud-based accountancy software solutions on the market. It’s ideal for very small businesses and sole traders who can sign up for the basic Self Assessment package offering a variety of functions on the go. These functions include self-employed income tracking, invoicing and even payroll and VAT. There’s a range of monitoring and reporting facilities too which can be essential in business planning and growth (growth? Don’t forget R&D Tax Credits!)
Subscriptions are good value too with the Self Assessment packages starting from £8 a month. However, there are often promotions available that reduce the costs for the first six months. Slightly more established small businesses and those which are VAT registered may instead want to plump for the £12 a month package which is compatible with Making Tax Digital.
A slightly less known option that’s still well worth considering is GnuCash. It’s a free, open source piece of accounting software and the coding behind it is sharable so it can be modified. Perhaps more suited to slightly more ‘techie’ start-ups, it’s ideal for business owners who want to take a platform that already exists and tailor it to work for them.
In terms of functionality GnuCash can track expenses, income and stock levels and has various other handy features you can code in if required. However, if the start-up plans to become VAT registered this one may potentially not suit as it isn’t quite ready for Making Tax Digital yet.
We left this one til last because it’s one that Tax Cloud integrates with to make claiming R&D Tax Credits that much easier.
Xero is a piece of accounting software that was designed specifically for start-ups and SMEs. It has a huge number of helpful features, and can assist with paying employees, recurring invoices, tracking sales, scheduling payments and much more. Xero can also be used to capture receipts and view real-time financial information, plus it integrates with over 350 apps including PayPal, Square, and Vend. Not only is this an efficient way of working, it also makes for a more customised experience.
The fact that Xero is cloud-based is another major advantage as it can be easily accessed online from any internet connected device at any time. It is designed around a double entry accounting framework and its robust accounting features allows SMEs to view their transactions, cash flow and account details flexibly.
Xero provides unlimited user support and integration with more than 600 systems via its add-on marketplace, including Receipt Bank, Curve and Vend. It’s regularly updated too so any bugs or upgrades never take long to get sorted.
How we can help
If any of your clients would like to know more about Xero specifically, and how it integrates with the Tax Cloud portal, then please do get in touch.
Myriad Associates (the name behind Tax Cloud) has almost two decades of experience in helping innovative companies of all sizes achieve the cash they deserve from their research and development work. As specialists working only in R&D tax relief, we’re in a position to work with accountants in assisting their clients with R&D Tax Credit claims.
If you would like to discuss any aspect of R&D tax relief or how we can help, call us today on 0207 118 6045. Don’t forget to also try out Tax Cloud portal for accountants to calculate what your client could be owed and make a claim.
Alternatively, please do drop us a message and we’ll get back to you promptly. It’s still business as usual for our team during the COVID-19 outbreak.