Choosing your accounts software
To err is human, but to really foul things up requires a computer - you’ll remember that adage if you are of a certain age. But the reality is that these days we all need to do our accounts on a computer. That means choosing what software to use.
The first thing is to check with your accountant what they are used to working with and what they recommend. You want to be able to hand your accounts over electronically, either on a disc or by email.
Simple or complex?
You also need to bear in mind how complex your accounts are likely to be. Most lone freelances with basic income and expenditure accounts can probably manage with just inputting the numbers into a spreadsheet under the right headings. That probably simply means Microsoft Excel or something similar – that comes as part of the Microsoft Office suite.
You might prefer something that can handle more complex data – certainly worth it if you are planning to be busier and expand into new ventures or operate as a company. You might need to buy an accounts package, such as Quickbooks or even Sage.
Many accountants are happy to receive files in these formats. Sage is the sort of package big businesses use – and can manage payroll, for example – though small business versions are available. But Sage is far from intuitive – I find it almost impossible to understand – so only go down these routes if you are prepared to devote time to learning the intricacies of the software or ready to pay someone to do your book-keeping for you.
The other option is to look at online book-keeping packages. Many accountants will now accept accounts in some of the formats available. The advantage of these is that they are free, or cheap, and you can update your accounts from any computer rather than having to be at the computer with your software loaded.
The downside is that they are often limited and you hear reports of them failing and data being lost. Having paid nothing or next to nothing, there’s no recourse if you need to complain. Check your accountant’s experience of the online services and follow their advice.