For my 3rd tip for Workwise Week I have a Business Ninja Tip – Get your finances sorted!
In my last post this week I am talking numbers. We all need to know our numbers in order to have proper control over our business. Knowing your numbers throughout the year helps you to make good decisions about what you can and can’t afford to do, ensures you keep on top of you’re the people who owe you money and prevents nasty surprises at the end of the financial year.
Get the right tools for the job
There are lots of ways of managing your finances and the right way is the one that works best for you (and your accountant but if they want you to work in a way that doesn’t feel right then get an accountant who gets you). The simplest way is using a spreadsheet, Excel, Google Sheets (free) or Numbers (free for Mac) will all do the job.
As your business gets bigger you might want to start looking at a specialised system to do it for you and there are a few fantastic options on the market that can help. You have probably heard of some of them but 2 that I recommend are:
• Quickbooks
• Xero
While they do take a little bit of upfront effort to set up these specialist systems also offer lots of extras when compared to a spreadsheet. They can be used to
- Create branded online invoices which can be emailed directly to the client.
- Accept online payments from your clients. While there is a cost associated with this from the card processors it makes it easy for your clients to pay you which makes them more likely to pay on time and we all like being paid!
- Create quotes that you can then convert into invoices when your proposal is accepted.
- Capture all your expenses and bills so that you can easily prepare your tax return (Quickbooks has a special feature that actually prepares your tax return figures for you to just cut and paste into the HMRC system, how cool is that?!)
- Link to your bank account so that you can import all the transactions for easy and quick accounting.
Capture images of your receipts so you don’t have to worry about losing them. - Manage your payroll (if you have one)
Some things to think about…
These tools are in the cloud
Both systems are cloud based, meaning your data is held on servers away from your computer. This means you need to have an internet connection to be able to look at your account (though you can download reports to store offline too). This makes security of your information really important and both use encryption to keep your data safe. They also offer 2 step authentication where you need to log on with a password as well as a code sent to your phone to keep you double safe.
One of the best things about using cloud accounting software is that you can access it from anywhere. If your computer blows up it’s not a problem (from an accounting perspective at least!), you can share your accounts with your accountant or colleagues with ease.
If you really hate doing something, outsource it!
Who wouldn’t love a software programme that magically knows what you have spent and what to allocate it to. Unfortunately both Xero and Quickbooks still require you to do some work (though this is greatly reduced when compared with traditional accounting methods).
If you really, really hate doing your books then maybe you should think about employing a bookkeeper or accountant (or both) to do the work for you. Work you hate affects you more than you might think and the boost you will get from being free of it all (save for shoving your receipts in a prepaid envelope!) could be enough to get your business to the next level.
Which one is best?
Those of you who know me will know that my answer to that is always “It depends!”
Both Xero and Quickbooks offer free trials so I suggest you hop over to their websites (linked above) and see what you think of the layout and look and feel. You are more likely to use a system properly when you like then way it looks and you feel at home with the language they use.
My personal view is that Quickbooks is a great introduction to accounting packages. It starts at £6/month for a limited number of invoices (but there is a great offer on at the moment for just £2.99/month for the first 6 months). Think about it; £70 or so a year will get your invoicing looking super slick, your clients paying you online (though Quickbooks charge quite a hefty fee for this), automatic mileage tracking and your tax return will be easy peasy!
If you are ready for something a bit more heavyweight then Xero is the option to consider. The entry level is pricier with similar features to Quickbooks but as your business grows it becomes much more competitive on pricing. It also has features that are not available in Quickbooks such as multi currency (a deal breaker if you work in multiple countries), automated payment reminders (that can save you thousands of pounds in unpaid invoices)
Others to consider are Kashflow, Freshbooks, Freeagent and Zoho Books. They all have good and less good points and the best way to find the one for you is to take up the trial offers.
Do you use accounting software? Which one gets your vote?