How do you keep track of your business finances? An Excel spreadsheet? A text file? A notebook? The back of a napkin? There are plenty of ways that you can track your accounts, but not as many that you should. Enter the accounting package.
What Is an Accounting Package?
In short, an accounting package is a piece of software that lets you keep track of all of your accounts, organize your tax information, and manage your payroll from one place. Xero, Sage, QuickBooks, Kashflow, and Liquid Accounts are all examples of accounting packages, and each provides slightly different services.
Let’s look at Xero for an example. It’s a cloud-based service, so you can access it from anywhere you have an internet connection—you can see all of your information from any computer or even from your mobile. Add all of your bank accounts, and Xero will automatically update their balances so you know exactly how much money your business has and where it is.
Invoices, receipts, purchases, loans, and just about any other financial account or piece of data can be added. All of the major accounting packages offer this functionality, and will give you various types of reports, charts, and graphs so you can easily see how your business is doing.
Why Do You Need One?
Because if you’re still keeping your books in a spreadsheet—or even by hand—you’re wasting time. Using automated solutions like those provided by Xero, Sage, and others will help you save time, which means you’ll also be saving money. These packages aren’t free, but very few people who have tried one will want to go back to the way they used to do their accounting.
This is especially true if you ever have difficulty with your books. Do you forget which things have been entered? Do you struggle to remember if you’ve already sent an invoice to a customer? Or if you logged your purchases for the day? Accounting software does all of that automatically for you.
You save time, you save money, and you have fewer things to remember. What’s there to lose?