Many small businesses find keeping track of their finances a chore that distracts them from their everyday business activities. Yet knowing the current state of turnover, costs and cash flow is vital for business owners so that they can plan for the future and ensure that their current business is healthy and sustainable. An accounting system such as Sage Business Cloud Accounting is a valuable tool in managing company finances and is reviewed in this article.
Whilst stuffing receipts into a shoe box is probably a cliché, it is important for many small business owners that they use an accounting system that is very intuitive and easy to use, that allows them to quickly create invoices, monitor bank accounts and log expenses. If the business is VAT registered it is also important that invoices and expenses are easily categorized and that VAT returns can be created and submitted with minimal fuss.
As the name suggests, Sage Business Cloud Accounting is a cloud based accounting system that is designed to simplify the day to day accounting needs of small businesses. There are two versions available: Accounting Start which is aimed at sole traders and micro businesses and the more powerful Accounting version which handles invoicing and cash flow management which will benefit larger SME’s.
Simple to use and easy to set up
Great care has been taken to make the interface as user friendly as possible with the complexities of double entry bookkeeping kept well behind the scenes so business owners as well as book keepers will quickly be using the range of accounting tools offered by the software.
Signing up for the service and inputting your business details is quick and easy and if you need VAT accounting you simply supply your VAT number which then sets up your account for VAT returns, which can be electronically submitted to HMRC via the making tax digital service.
Should you be scratching your head wondering how to create an invoice or connect your bank account there are comprehensive step by step guides available and should you wish to delve further into the capabilities, there is training available at the Sage University. An active community also helps those who need assistance with various aspects of their accounts.
There are free apps available for mobile devices which allow you to connect to this software and access financial reports, create and manage invoices and track expenses.
Invoicing and customer management
With invoices for products and services forming the life blood of business large and small, business owners need little encouragement in ensuring that their customers are invoiced correctly. Quickly finding unpaid invoices is also important and this Sage accounting product excels in identifying outstanding sales invoices by displaying a summary on the dashboard.
This vital information along with graphical information about the amounts invoiced, purchases and cash flow provide the business owner with an excellent summary of their company finances as soon as they log in.
Your products and services complete with unit pricing and, where appropriate, stock levels, can be easily setup within the accounts systems so that creating invoices is straightforward and can be done effectively using the mobile app if you are away from the office.
Sage Business Cloud Accounting also allows you to set up customers, logging their contact and billing details. You can also run customer statement reports to understand how good they are at settling invoices in a timely manner. Suppliers can also be set up in a similar way.
Although these features don’t provide the more extensive features found in a CRM system, if you need to contact a customer or supplier at short notice when out and about, you can easily find their details using the mobile app.
When keeping track of expenditure and purchases, Sage Accounting provides important functions such as entering purchase invoices and credit notes. It is also possible to enter expenses via a quick entry screen for convenience.
The app gives you a detailed insight into your expenses so you can keep on top of your business and log an expense by simply taking a photo on your smartphone.
All purchases and expenses are compiled into P&L reports and VAT returns which greatly simplifies end of year tax reporting and quarterly VAT returns.
Open banking is a useful connectivity standard that allows the connection of regulated apps and services like Sage Business Cloud Accounting to your bank accounts.
This is a highly useful feature that automatically updates your accounts with the latest balances and transactions in your bank accounts. If an incoming transaction matches an invoice within your accounts, the system will automatically match it, greatly speeding up the time and effort required to reconcile bank statements, which is often seen as a chore by many business owners.
Information from your bank accounts can also flow into your finance reports and P&L statements so that you can easily determine the cash flow and available funds within your enterprise.
This accounting software can also import your bank statements in QIF, OFX and CSV formats so there is excellent compatibility with other accounting packages should you wish to migrate to this Sage product.
With an increase in internet pure play businesses, the ability to receive foreign currencies such as Euros and USD is becoming vital for many SME’s.
Keeping track of invoices and multiple currency accounts is often beyond the scope of many competitor accounting products, however Sage Business Cloud accounting allows you to invoice your customers in a wide range of currencies with the option to use live exchange rates and foreign exchange currency transactions to track and manage your revenue from international customers.
Cost effective and efficient
The Sage Accounting package that we are looking at in this review delivers a comprehensive range of accounting tools to cater for a wide range of SME’s. The normal monthly subscription price for this service is £24 plus VAT, however Sage are currently offering this service at a discounted price of £7.20 + VAT per month, effective for four months.
These subscription costs are very reasonable, particularly when you take into account the mobile apps and comprehensive support packages that are available. Taking the time to update your accounts using Sage Business Cloud Accounting will ensure that you have excellent visibility into your business finances, can quickly identify unpaid invoices and keep a close eye on the money in your bank accounts.
There is also a hidden benefit to using a cloud based accounting package like this and that is well organised and updated accounts reduce the time required by your accountant to inspect, compile and process your end of year accounts for tax purposes and greatly reduce the time required to compile and submit VAT returns.