Accounting requirements checklist
Keeping good accounts is vital for the health and survival of your business. In order to assess what your business' accounting requirements are, it may be helpful to consider the following:
- Is your business a limited company or do you operate as a sole trader? Sole traders may be able to use a personal accounts package rather than a business package, as they are unlikely to need payroll processing.
- Do you have to comply with Making Tax Digital for VAT? All VAT-registered businesses who have not yet signed up for Making Tax Digital for VAT need to do so now and need to keep digital records from their first accounting period starting on or after 1 April 2022. You'll need to make sure you get compatible software if you aren't using one already.
- Do you have employees? If so, you may want an accounting package with a payroll function rather than separate payroll software. You may need to file certain PAYE returns online, so check that the software can handle e-filing and meets the HM Revenue & Customs payroll standard.
- What is the number of transactions that you expect to do in a month? If less than ten, you may find that a manual accounts system will be the best choice. If more than ten, you may need to select a package designed for higher levels of activity.
- What is the number of users of the accounts package at any given time? If one person does all the accounts work, a simple low-cost package may suffice. However, if several people are entering transactions at the same time, you will need something more sophisticated.
- What computer systems do you use? Most businesses use personal computers with a Windows Operating System and there is a wide range of accounts software for this platform. If you use Macintosh or Linux, your choice of software may be restricted and you may need to consider using a Windows-based PC just for the accounts package. Some applications rely on additional software to link a Macintosh computer to a Windows-based PC.
When you've worked out your business' basic accounting needs, you may want to consider any specialised requirements for your accounting package.
How to prioritise your business' accounting needs
When you are looking at your accounting needs, it is unlikely that a single software package will tick every box on your list. You may need to prioritise features that are essential to your core requirements. To help you do this, think about:
- how much time and cost a particular feature will save you
- what are the consequences of omitting the feature
- could you add the feature on in the future
- how your requirements are likely to change in the future
You could give each detailed feature a rating, for example:
- must have - without this feature the package is not usable
- advantageous - the feature would save a lot of time
- nice to have - useful, but not essential
This will allow you to compare your requirements against each accounting package. If the package doesn't meet your basic or 'must have' business requirements, discard it. From the rest, select the one that delivers the greatest number of advantageous and 'nice to have' features at a price your business can afford.
See also how to choose software for your business.