For some business owners, using an accounting software is a must, but for some it might feel like an unnecessary cost without any benefit. Here, we take a look at the pros of why an accounting software can be a useful addition to your business.

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When you are using an accounting software, it allows you to manage your finances and cash flow more effectively, while enabling you to maintain accurate records for your business. When you have well maintained records, it allows you to see your profit or loss much more easily, to give you a better understanding of sales trends and unnecessary expenditures to grow your business more efficiently.

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Along with this, it allows you to have a better opportunity to plan your business’ next steps – whether this is maintaining the current levels or expanding. Using a software also means that you can have to date records accurately kept for tax planning, savings or investment opportunities.

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If you are a VAT registered business, you will already be required to use Making Tax Digital (MTD) for your VAT reporting. Now, you might keep your records manually/in a spreadsheet and pass this to your accountant for filing, however, if you were to transfer to an accounting software, this would potentially create savings for you with reduced charges from your accountant for filing VAT returns, it also give you the flexibility to take this on yourself, or pass it back to your accountant as and when you need.

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HMRC are soon looking to implement MTD for Sole Traders and Partnerships (see Do I need to file a Self Assessment tax return), so starting with an accounting software now will allow you to get ahead of the changes and understand the software you have chosen, before the mandatory reporting requirements come into effect.

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There are many types of accounting software out there, with different features and styles. If you are looking at choosing an accounting software, I would always recommend having a free trial of those you like the look of, before committing to subscribing. All software’s have their pros and cons, and some are more suited to some users more than others, so take your time to find the one you like the best. Any accountant worth their salt will work with you and your chosen software, without trying to pigeonhole you into the one that they want to use (because let’s face it, we all have our favourites!).