If your are starting a new business, a good bookkeeping system provides warning signs if your business is in trouble.
Not having a decent accounting framework in place that will alert your attention to a possible problem means your business could come up short on money, if you run out of cash, your business may fail.
You can set up a bookkeeping framework physically (utilising bookkeeping books), electronically (spreadsheets) or use online cloud based accounting software. If getting familiar with bookkeeping isn't your cup of tea, then accounting software is the most efficient choice.
What to think about when selecting your accounting software.
Your business is unique and your requirements for your new business will be unique.
I suggest to new businesses to ask themselves the following questions:
- does this accounting software calculate everything payroll and is STP ready (PAYG, annual leave, long service leave, etc.),
- what about keeping track of stock, work in progress (WIP), purchase orders, sales orders, jobs, etc.,
- can the software handle many bank accounts,
- what about foreign currency if you require this,
- do you need to track each department within the business and their financial records,
- what about add-ons,
- will this new system keep details on customers, what they purchase, how frequently they purchase and when they purchase.
So, which accounting software is for my new business.
With the new laws on Single Touch Payroll from 1 July 2019, there are many no-cost and low-cost accounting software packages out there that allow business owners to effectively control records without a bookkeeping or accounting degree.
Let me know if you would like a list of Free Accounting Software.
Some common accounting systems used by small businesses are:
In case you are uncertain which package to choose, speak to your bookkeeper or business consultant. Also, it is worth checking to make sure your new software package has Standard Business Reporting forms needed to report to the Australian Taxation Office.
Lastly, you MUST be tax compliant in Australia and when you are setting up your new system please make sure all compliance requirements are met.
Xero and MYOB Bookkeepers