If you’re setting up a new business, you’ll need to decide which accounting package to use. Accounting software can help you keep track of cash flow and enable invoicing. It helps you manage your tax and can mean you’re less reliant on the help of an accountant. It’s a more intelligent option than paper accounts and spreadsheets, and it’s a cheaper option than paying someone to do your accounting for you.
You can either use a cloud based system (usually paid for monthly) similar to Xero or similar or one where the software and your data are stored on your own computer. In either case, you should back up your data – for around £50 you can buy an external hard drive to back up a standard laptop. That is an important business purchase, whichever accounting software you use.
Sage has been a market-leading accounting package for many years. Sage 50 is the big one, but there’s a more lightweight (and cheaper) version called Sage Instant that might be a better bet for a fledgling business. TAS Basics is a free version from Sage but it won’t help with your VAT.
Other packages to explore include FreeAgent, which seems very popular with its users, and free packages, such as TurboCash. You’ll need to explore the features offered by different accounting software to see if they fit your business’s requirements. For instance, if you expect to deal with payments in different currencies, Kashoo may be the best package for you.
Still unsure? The Institute of Chartered Accountants offers a handy guide to accounting packages.
