“I’ve invested in a piece of accounting software. It’s great and saves me so much time and money, meaning I don’t need an accountant now, right?’’
Wrong. Lots of businesses assume they don’t need accountants if they’re using accounting software, but that’s not really the case.
In this article, we’ll take a look at what accounting software is, why it certainly doesn’t remove the need for an accountant and how, in actual fact, this technology can work in perfect harmony with an accountant.
What is accounting software?
In a nutshell, it’s any software that gives you visibility of your business finances. It can help you track income, expenditure, send invoices, keep a record of receipts and expenses, and often also give you an overview of your tax liabilities. Popular accounting software out on the market today include Quickbooks, Xero, Wave and QAccounting’s very own expenses app.
The core aim of many of these apps is to give you, as business owners, a clearer idea and better control of your incomings and outgoings, allowing you to see how well your business is doing in real-time.
So why do I still need an accountant?
While accounting apps can improve efficiency when it comes to keeping your finances on track, it doesn’t negate the need for an accountant, and here’s why.
Your software won’t manage your accounts or do your bookkeeping. While it can simplify your costs and automate invoices, for example, an accounting app won’t take care of your tax responsibilities.
Every self-employed person would love to have an app or something that automatically organises and files their end-of-year company accounts for them. While AI (artificial intelligence) may offer hope of that technology existing in future, for now, you still need an accountant for this.
It’s the same with preparing your self-assessment tax return, quarterly VAT payments or Corporation Tax bill. Using an accounting app only offers you guidance – it can give you a tax estimate and streamline your personal and business accounts, which in turn can make things easier. However, a specialist accountant will know how to prepare and organise your accounts, ensure all of the information is correct, and even submit your tax returns to HMRC on your behalf.
As helpful as software can be, it won’t give you the personal touch that an accountant can. Accountants will be able to offer you expert advice tailored towards your business – from guidance around how to minimise overheads, improve your profit margins and even grow your enterprise.
Another advantage of having a trusted accountant is security. They are often an expert when it comes to tax regulations and, therefore, will not only ensure you are compliant but will be able to make you aware of, advise and prepare you for any tax changes that could affect your business.
Is it worth investing in accounting software then?
Of course. Accounting software can be incredibly valuable and could play a crucial role in saving you time and hassle when it comes to managing your finances. In fact, it should work in partnership with your accountant, so you and they can do a better job at helping make sure your business is tax efficient and tax compliant.
With over 20 years experience in supporting contractors, QAccounting is one of the UK’s leading online UK accountants, offering a range of full-service accountancy packages that start from just £95pm + VAT. For more information, please request a callback – one of our friendly contractor accountants will be in touch.
FAQs
While accounting apps can improve efficiency when it comes to keeping your finances on track, it doesn't negate the need for an accountant, and here's why. Your software won't manage your accounts or do your bookkeeping.
Do I need an accountant if I use accounting software? ›
Whether you want an accountant is up to you. But once you take a wider look at what a good accountant can offer your business – from tax planning to helping sure you don't miss out on unclaimed capital allowances – then it makes sense to find the best accountant you can.
Do you need an accountant if you use QuickBooks? ›
Yes, you do need a bookkeeper even if you have Quickbooks. We understand that you're a small business owner, and you want to save money where you can. But relying on software alone may cost you more in the long run. Accountants and bookkeepers can offer so much more than Quickbooks.
Do I need a bookkeeper if I use QuickBooks? ›
Overall, while QuickBooks can streamline many accounting tasks, having a bookkeeper with financial expertise can help you maximize the benefits of the software and make better-informed decisions for your business.
Do I need to know accounting to use QuickBooks? ›
You don't need an accounting degree to do your bookkeeping in QuickBooks. However, it's good to know the basics. Use this glossary to learn more about what goes on behind the scenes in QuickBooks.
Can accounting software replace an accountant? ›
Can software replace accountants? While it can't replace the personalised “human touch,” accounting software can automate a multitude of services typically provided by a professional accountant, such as basic bookkeeping and financial statements.
Are accounting softwares worth it? ›
And yes, it can be another expense that can feel like a lot when starting out. But the benefits of accounting software are well worth the investment! It streamlines financial processes, enhances overall business efficiency, and, most importantly, prevents costly errors.
Why don't accountants like QuickBooks? ›
QuickBooks is unable to track revenue recognition. This is a major gap, as revenue recognition is a key accounting principle. Without proper revenue recognition, a company's income statements will be inaccurate and could mislead investors and creditors. There are a few possible workarounds for this issue.
Is QuickBooks enough for accounting? ›
QuickBooks serves like any other accounting tool, but it does basic functionality better than alternatives while it also offers more advanced features. It's a versatile and user-friendly tool for nearly all your accounting tasks, which each represent a critical component of your company's financial health.
Can I do bookkeeping without QuickBooks? ›
If you're looking for a feature-for-feature replacement for QuickBooks in a pared-down, more user-friendly package, Xero is about as close as you'll get. Xero lets you access your finances on any device with an internet connection and automatically imports all of your transactions.
QuickBooks allows businesses to manage finances without a dedicated accountant, as some of its features emulate an in-house professional's responsibilities. The software offers: Budgeting and forecasting tools.
Can I use QuickBooks for personal bookkeeping? ›
While traditionally used for business accounting, QuickBooks can also be a personal finance management tool. It allows you to track income and expenses, categorize transactions, create budgets, and generate detailed financial reports.
When should you stop using QuickBooks? ›
Key Signs That QuickBooks is Failing
- It Becomes Harder to Track Real-Time Activity. As soon as a company expands or takes on new locations, the information that has to be exchanged quickly takes longer than it should. ...
- Increased Use of Manual Processes. ...
- An Increase in Lost Sales. ...
- QuickBooks Used Less for Accounting Work.
Finally, entering data manually instead of using automated features can lead to errors and slow down the accounting process. To avoid these mistakes, take the time to learn how to use QuickBooks properly, and consider working with a professional accountant to ensure that your finances are in order.
Do you have to pay for QuickBooks accountant? ›
QuickBooks Online Accountant isn't just a portal to your client's books—it's the one place to grow and manage your entire practice, at your pace. Sign up today, totally free.
What's the difference between QuickBooks and QuickBooks accountant? ›
What's the difference between QuickBooks Online and QuickBooks Online Accountant? QuickBooks Online Accountant is a cloud-based portal that allows an accountant to access their clients' data in QuickBooks Online from any computer.
Do I need an accountant or can I do it myself? ›
An accountant doesn't have to be involved but a person does. It could be you, but if you have to ask the question then I would say it would be safest to get an accountant on board, at least for the first year to get everything set up and on track. properly prepared.
Who can use accounting software? ›
Accounting software assists accountants and bookkeepers in recording and reporting a firm's financial transactions.
Should I have my own accountant? ›
A personal accountant may be helpful if you're an entrepreneur or you have a lot of personal financial issues to deal with. However, if going the DIY accounting route is more your style, you could enroll in a course to learn more about money management, do research online, or use a money-management app.
Are you less likely to get audited if you use an accountant? ›
Isn't the purpose of hiring an expert to do your taxes specifically to prevent errors that lead to an audit? You would think so. Unfortunately, completing your taxes by your CPA or other professional does not make your finances audit-proof.
