Online Accounting Software

Do you need to buy bookkeeping software as well as have an accountant?

As a contractor, freelancer, consultant or interim manager either working through your own limited company or planning on going, limited you might be asking yourself if you need to purchase an online or offline accounting package as well as appointing an accountant.

The simple answer is no you don’t. We provide all clients with our own bespoke Contractor/freelancer bookkeeping software - SJD Online.

Online and offline bookkeeping software is nothing new, Sage the world’s largest, most used -they have nearly 6m customers and are probably best known accounts software seller (which we’d highly recommend if you’re looking solely for a bookkeeping package and our free one doesn’t meet your requirements), and has been selling packages for over 20 years. Their basic package only costs £115 plus VAT (as of 20 January 2010) and is available from most WHSmiths.

However, recently there has been a positive explosion in the bookkeeping and online accounting software market. Now remembering that the world’s largest, best known, most used only charges a one off fee of just £115 plus VAT, you might be surprised to find that some online bookkeeping software companies charge as much as £130 a month, that’s right A MONTH - not a one off fee like Sage charge but a monthly ongoing charge, every month.

Many new software packages are feature packed with pretty looking user friendly screens, a huge array of fancy functions designed to meet the needs of a one man sole trader through to larger limited company and most promise to deliver accounting and bookkeeping heaven. But before you take the plunge and set-up your direct debit, ask yourself if you really need a sophisticated online accounting package as well as an accountant. After all if you didn’t want to spend the 15 minutes a month it takes to fill out our  software (not forgetting that it's free) you could always hire a local bookkeeper for just £20 a month and they’d do it for you. 

Special note about the 15,000 contractors and freelancers who are clients of SJD: very few don't use the spreadsheet, so it really can’t be that difficult and time consuming to complete. We do of course, as most accountants do, accommodate clients who want to use other software packages.

So before splashing out on a highly integrated all bells and whistles online software package, lets look at exactly what you need to do each month bookkeeping wise. 

Essentially, you’ll send a few invoices out, detail some expenses, run a payroll (we do this for you) and move some money from your business bank account. As we mentioned earlier, this will take about 15 minutes a month, the breakdown is as follows:

Invoicing

You’ll raise maybe one invoice a week, some do it monthly, which simply means emailing your client/agency an invoice and recording it on a spreadsheet. This will only take you a couple of minutes each week.

Expenses

As a contractor, it’s unlikely you’ll have as many expenses as the local engineering firm or a large limited company, which many of the feature rich online accounting software packages are designed for. For you it will simply be a case of recording your expenses in a spreadsheet (making sure you keep your receipts).

Payroll

You can run this yourself, however, payroll can be a bit complicated so may take you a while to complete. The best option is to get your accountant to organise your payroll (we include this within our standard fixed fee service along with everything else you need to your company and personal tax needs).

Banking

You already do this on your personal account; it simply means recording the money that comes in when you get paid by your client or agency. Unlike some companies’, payment and bad debtor days isn’t often a thing you'll have to worry about, most clients pay when they say they will.

All in all, you just have to record all these items somewhere, which is why we simply advise our clients to use the free software we have developed, it’s basic and simple to use. It’s in excel which most people are all too familiar with so it’s quite well tested, there are no macros’ or complicated equations for you to write, we’ve taken care of all this for you.

Don’t get us wrong, we don’t have anything against sophisticated, comprehensive online jazzy accounting packages, it’s just that we’re really not sure all the functionality and hugely integrated nature of them is much use to a contractor or freelancer. Sure if you’re a medium sized company with a vast quantity of invoices, customers, employees, expenses etc we’re sure these modern wonders of bookkeeping software wizardry can make the life a Payments Manager supremely easier; however for a contractor or freelancer it’s doubtful you will ever use the functionality.

Most contractors and freelancers, and we talk from experience as the UK's largest accountants for contractors and freelancers and support over 15,000 such clients, most people want dedicated help from a human being. The recording of the data is simply captured using a basic spreadsheet, therefore you don’t need to go online. You can just keep the spreadsheet on a memory stick or email it to yourself working on it when and where you like.

SJD believes that by offering its clients a dedicated contractor accountant who is always on hand either face to face, on the telephone or over email is really what clients want. Clients want somebody to talk to, to discuss things like: what they can and cannot claim, their long term contracting plans, how expenses affect their tax bills, how PAYE and the flat rate VAT scheme can save them a fortune and what the latest advice is regarding IR35 is etc. None of this can be achieved by using a piece of online or offline accounting software even if it comes with access to an online accountant.

So back to our earlier question, 'do you need bookkeeping software and an accountant?' - sure after all you need to record your information somewhere. But as to the question 'do you need to pay for one?' - most definitely not.

You may also find our page on Fixed Fee Accountancy and our other page on Contractor accounting software helpful.

If you'd like to speak to one of our experts, call us on 01442 275789 or email newbusiness@sjdaccountancy.com.