Why use Accounting Software

The whole point of using accounting software is to make your life easier by saving you time and money.  Therefore, if it doesn’t and you can meet your legal requirements without it, you should question whether it’s worth the effort.

It should save you time because:

  • the whole process of bookkeeping should be faster (although setting up a package can take an initial “time investment” at the start)
  • you whould be able to answer queries much quicker (such as “did you pay supplier A last month, and if so, how much)
  • some things should be semi or fully automated, such as bank reconciliations, VAT returns
  • your “year end” should be more straightforward

It should save you money because:

  • you may be able to negotiation lower accountant’s and/or bookkeeping fees.
  • indirectly, you should save money by freeing up your/your bookkeeper’s time.
  • you may be able to make better financial decisions as a result of better and more timely information.

4 responses to “Why use Accounting Software

  1. Would someone tell me the advantages and disadvantages of using Excel to do your accounting rather than using a manual accountancy system.

  2. This is not an exhaustive list, by any means, but some points to get you started:
    some advantages:
    -can semi automate the process of bookkeeping
    -can build in some simple “error traps” to avoid things like arthmetic errors.
    -your accountant may be able to provide you with some guidance and/or a simple spreadsheet template, and as a result you may be able to save on accounting fees.

    some disadvantages:
    -you obviously have to be comfortable with Excel
    -double-entry bookkeeping in Excel can be a bit labourious, therefore it’s better used for single entry bookkeeping. (Having said that, it’s probably still easier to do double entry bookkeeping in Excel rather than manually)
    – it’s easy to delete entries and corrupt a spreadsheet (possibly without realising until much later), so it’s important to take backups and build in as much “protection” and error checking as possible.

  3. Hi Happy Accountant,

    I stumble into your blog while trying to look for simple accounting software for my small business. Ya I agree that using Excel to do double-entry bookkeeping is a bit labourious. I’m accounting trained and would like to do double-entry bookkeeping. I’m using Quicken recently but I want something simpler. Any recommendation?

  4. Hi, because this is a “wordpress.com” blog and also because it depends on your own circumstances, priorities & skills, it’s not possible for me to recommend specific accounting system here -sorry 😦

    Since you are accounting trained, you would be able to cope with more advanced packages that require a deeper/better understanding of double-entry.

    However, also bear in mind the cost-functionality trade off. Like everything in life, there’s no point in paying over the odds for “top of the range” model with capabilities you’ll never use. Look at your individual needs and try to find a package to meet them, rather than the other way around.

    BUT also consider upgradeability/compatibility to accommodate business growth. Switching/converting can be time consuming and expensive.