Here we explain the 2023 Xero Price Increase. How much Xero’s Prices are increasing. Why Xero’s prices are increasing. Also, the alternatives to Xero. With CloudBook Online Accountants, you can choose whichever software suits you the best.
Here are the Xero Price increases over the past two years:
|2020 price pcm||£10||£24||£30|
|2021 price pcm||£12||£26||£33|
|2022 price pcm||£14||£28||£36|
|2 Year increase||40%||17%||20%|
|2023 price pcm||£15||£30||£42|
|3 Year increase||50%||25%||40%|
Xero state that they are continuing to invest in their platform to deliver more efficient tools, powerful insights and access to faster payments. The only noticeable change over the past year is that all of the reports have changed to allow you to edit them. They have now removed the old reports.
In our opinion, Xero is certainly improving all of the time, however those changes are small. Where the changes are not small, they usually come at an extra cost, such as the Expenses or Projects add-ons. The core platform, in our opinion, has not improved enough over the past two years to justify up to a 50% increase in the Xero price over the past three years. Having said that, it is still the best online accounting software for small businesses. So if you can afford to continue using it, you should.
With CloudBook Online Accountants, unlike other accountants, you can use whichever software you prefer. We don’t make you use Xero software, so you don’t have to pay their high prices. As well as that, you’ll probably save on accountancy fees too, with our low fixed monthly fees.
To avoid the price increase, could you downgrade your Xero plan? The Starter plan now has unlimited bank transactions and allows up to 20 sales invoices and 5 bills per month. Instead of using bills you could just attach them to the bank transaction. The Standard plan is only missing multi-currency which is only essential if you have foreign bank accounts. If you have few foreign currency transactions you could convert them manually.
Move My Books is a free service that helps you move your accounting data to Xero, QuickBooks or Sage Accounting. This could be useful if you are thinking of moving from Xero to QuickBooks or Sage.
Pandle is unlimited and comes with multi-currency and bank feeds for £5pcm. We can get it for £2.50pcm. It’s relatively new, sometimes slow, and takes a while to get used to. However, it should cope with most things you use Xero for.
QuickBooks is our next most popular software after Xero. It does most things that Xero can do and is quite easy to use. Their Self-Employed package is £10pcm, Simple is £14pcm, Essentials £24pcm, Plus is £34pcm.
FreeAgent is geared towards small business and freelancers. Natwest, RBS and Mettle bank customers can get it for free. We can get it for our clients for £17.50pcm.
Kashflow is less popular than it used to be. However, if you have straightforward accounting transactions, it can work well for you. Starter is £10.50pcm, Business is £22pcm or with payroll is £29pcm.
Quickfile is used by a few of our clients. It’s less easy to use but it can be free if you have less than 1000 entries per year, otherwise it’s just £60pa. If you want automated bank feeds, that’s an extra £15pa.
MyT accounting is a new software with a built-in receipt reader using AI to categorise your costs automatically. The Standard subscription is £5pcm, Plus is £15pcm and Pro is £30pcm.
From our experience Sage have struggled to keep up with their online competition. As such, we still don’t have any clients using Sage at the time of writing but we’d be happy to help you use it. However, it’s not much cheaper than Xero. The Start price is £14pcm. Standard is £28pcm and Plus is £36pcm.
If you’re not VAT registered, you could use a spreadsheet (e.g. Excel, Google Sheets, Numbers) to do your accounting. While we prefer online accounting software, if your accounting transactions are straightforward, a tidy spreadsheet would be ok. All transactions need to be categorised. Read more on our bookkeeping using a spreadsheet page.
We have our own free software which very basically allows you to list your sales and expenditure. It can also submit MTD VAT returns.
There are many other online accounting software platforms available. We’ll consider doing your accounts etc using any online accounting software. Look out for ones that can link to UK bank accounts and are MTD compliant. Unfortunately, this excludes Wave accounting which is a free alternative if you don’t need those things.About Us Our Prices Instant Quote
As businesses continue to embrace digital transformation, the role of online accounting software has become paramount in ensuring streamlined financial management. Whether you’re a small startup or an established enterprise, the right online accounting software can make a significant impact on your efficiency, accuracy, and overall success. In this article, we will delve into the 15 specific features in online accounting software that should be on your radar when selecting online accounting software tailored to your business needs.
The foundation of any effective online accounting software is a user-friendly interface. Intuitive navigation, clear labeling, and organised dashboards ensure that users can quickly access the tools they need, reducing the learning curve and increasing overall productivity.
Cloud-based accounting software enables users to access their financial data from anywhere, at any time, fostering collaboration and flexibility. Cloud solutions also eliminate the hassle of manual backups and offer enhanced security measures to safeguard sensitive financial information.
Time-consuming manual data entry and tedious reconciliation processes become things of the past with automated bookkeeping features. These capabilities include bank feed integration, transaction categorization, and automatic reconciliation, saving valuable hours and reducing the risk of errors.
Efficient invoicing and billing tools allow businesses to create, send, and track invoices seamlessly. Customizable templates, automatic reminders, and integrated payment gateways improve cash flow and enhance the customer experience. Choose software that allows you to personalize your invoice templates to reflect your brand.
Managing expenses becomes effortless with software that intelligently categorizes and tracks your business expenditures. Detailed expense tracking features enable users to monitor business expenditures and easily allocate costs to appropriate categories. This data helps in budgeting, expense analysis, and tax preparation.
Make data-driven decisions with up-to-the-minute financial reports. Seek software that generates real-time reports. Comprehensive financial reporting capabilities provide insights into the health of the business. Balance sheets, income statements, cash flow reports, and customisable analytics empower informed decision-making.
Ideal for service-based businesses, project-based accounting allows you to track income and expenses for specific projects or clients. This feature provides insights into project profitability and resource allocation.
For businesses dealing with physical products, inventory management is crucial. Opt for software that tracks inventory levels, alerts you when it’s time to reorder, and integrates seamlessly with your sales and purchasing processes.
In a connected business ecosystem, integration is key. Seamless integration with other business tools, such as CRM systems, e-commerce platforms, and payroll software, ensures a unified and holistic approach to financial management.
For businesses operating in the global market, multi-currency support is essential. The ability to handle transactions and conversions in various currencies simplifies international operations.
Top-tier security features, including data encryption, two-factor authentication, and regular software updates, protect sensitive financial data from unauthorized access and cyber threats. Choose software that employs bank-level security measures, including data encryption and secure servers, to ensure the confidentiality of your information.
Seamless integration with payroll processing ensures that employee salaries, taxes, and deductions are accurately calculated and recorded, saving you from the complexities of manual payroll management.
Collaboration tools allow multiple users, such as accountants, bookkeepers, and business owners, to work together in real time, facilitating efficient teamwork and ensuring accurate financial records. Maintain control over who can access and modify your financial data. Opt for software that offers customizable user permissions and access controls to prevent unauthorized changes.
In an increasingly mobile world, mobile accessibility ensures that users can manage their finances on the go. Mobile apps with essential features make it convenient to stay connected and informed. This allows you to manage invoices, track expenses, and access financial reports from your smartphone or tablet.
Ensure accountability and transparency by using software that maintains a comprehensive audit trail. An audit trail feature provides a detailed history of all financial transactions and changes, enhancing transparency, accountability, and compliance.
Responsive customer support, including live chat, email, and phone assistance, ensures that users receive timely help with any issues or questions that may arise during their software usage. When you have questions or run into issues, timely customer support can make all the difference. Choose software providers that offer responsive customer support channels, as well as training resources to help you maximize the software’s potential.
Selecting the right online accounting software is a crucial decision for businesses aiming to optimize their financial management processes. The 15 must-have features in online accounting software outlined in this article serve as a comprehensive guide to help businesses make informed choices that align with their unique needs and objectives. By embracing these features, businesses can navigate the complexities of modern finance with confidence, efficiency, and accuracy.About Us Our Prices Instant Quote
In today’s rapidly evolving digital landscape, the integration of artificial intelligence (AI) has revolutionised various industries, and accounting is no exception. The advent of AI accountants has propelled the accounting profession into a new era of efficiency and accuracy. By harnessing the power of AI tools and technologies, online accounting services are redefining traditional accounting practices, making them more streamlined, error-free, and time-effective. In this article, we will explore how AI tools such as Dext or Hubdoc, bank statement data extraction, and Xero’s bank reconciliation AI are transforming the accounting landscape and enhancing the capabilities of online accounting services.
At CloudBook Online Accountants, we have always been ahead of the curve in terms of technology. When we were formed in 2013, we specialised in online accounting software. In fact we only helped clients who used or wanted to use online accounting software. This was when most accountancy firms were reluctant to even try it! Now we are AI accountants but everything is fully controlled by qualified accountants. It’s the same personal service we’ve always provided but using AI tools where possible. It will keep us efficient and keep your fees low.
Here are a few examples of the AI Tools we are already using:
MyT is possibly the first accounting software with a built in AI tool to read invoices and receipts. The tool will extract the data and allocate the cost to an expense category determined by AI. We are MyT accountants and are ready to help you use MyT AI accounting software. See our MyT review for more information.
One of the most time-consuming tasks in accounting involves manually extracting data from receipts and invoices. However, with AI-powered tools like Dext or Hubdoc, this process is streamlined and automated. By simply uploading receipts or invoices, these tools use AI algorithms to extract key information, such as vendor details, transaction amounts, and dates. This eliminates the need for manual data entry, reduces human error, and significantly speeds up the data processing workflow. AI accountants can now allocate their valuable time to higher-level tasks that require human judgment and analysis.
Traditionally, extracting data from bank statements and reconciling transactions has been a painstaking task for accountants. However, AI-powered algorithms have transformed this process. AI accountants can now leverage cutting-edge technologies to automatically extract data from bank statements and categorise transactions with high precision. By accurately extracting and categorising data, online accounting services powered by AI can provide real-time insights into a company’s financial health, identify patterns and trends, and help businesses make informed financial decisions swiftly.
Bank reconciliation, a critical component of accounting, can be a complex and time-consuming task. However, AI accountants can leverage intelligent solutions like Xero’s AI-powered bank reconciliation feature to automate this process. Xero’s AI technology learns from historical data, including past reconciliations and categorisations, to identify patterns and suggest matches for unmatched transactions. By automating bank reconciliation, AI-powered accountants eliminate human error, improve accuracy, and save significant time for both accountants and business owners.
By adopting AI tools and technologies, online accounting services can offer numerous benefits to businesses:
AI accountants have revolutionised the accounting landscape by harnessing the power of AI tools and technologies. By automating tedious manual tasks, such as data extraction from receipts and invoices, bank statement data extraction, and bank reconciliation, online accounting services can significantly enhance efficiency and accuracy. Businesses that embrace AI accountants gain access to real-time insights, accurate financial records, and the ability to make data-driven decisions swiftly. With AI as their ally, businesses can optimise their accounting processes, focus on core operations, and stay one step ahead in today’s competitive business environment.
P.S. Yes, this post was AI generated and tailored. It saved us hours, giving us more time to help our clients save tax!About Us Our Prices Instant Quote
MyT online accounting software provides small businesses an AI solution for their accounting needs. We are MyT Accountants and this is our MyT review. We have many clients that use MyT to do their online bookkeeping, VAT returns, and management accounts. We also do bookkeeping for our clients using MyT. You can see all of our fees and get an instant quote from the menu above. This is our MyT accounting software review covering their online accounting software.
This is our MyT review which gives a detailed opinion on various parts of the software. If you’re looking for a quick review of MyT, our overall rating is 3/5, however it is brand new and improving and could save you a lot of money.
Prices range from just £5pcm up to £30pcm, after a free trial and the MyT offer of £1 per month. The Standard plan should be sufficient for most small businesses which is £5pcm and is £9pcm cheaper than the Xero Starter plan. Our MyT review for cost is 5/5.
MyT could be more intuitive at times but once you get used to it, it’s quite easy and quick to use, with a clear layout. There could be some improvements like bulk categorisations and banking rules. Read on below for how easy it is to do various things on MyT. Our MyT review for overall ease of use is 3/5.
To add new sales on the mobile app, from the Home screen just click on Create Customer Invoice, add the details, then Create. The layout is in the style of an invoice, so it’s clear what information needs to go where. Then you need to go to Customer Invoices to email it to your customer from the mobile app. On the desktop app, go to Sales, Create Invoice, add the details then Save. Again, you have to go to the Sales Overview to email the invoice to your customer. It would be easier if there was an option to email the invoice directly from the created invoice. You can set up a payment service with BOPP to add a payment option to give customers an easy way to pay the invoice. Adding attachments is a useful option which will make it easy to show the customer their order.
On the mobile app you have to add a photo or a file to create a supplier invoice. This is where the MyT Artificial Intelligence comes into play. It will read the details on the photo or file and create the supplier invoice for you.
On the desktop app you can add supplier invoices without uploading a photo or file.
Connecting Bank Accounts was easy and powered by the reputable MoneyHub. It involves choosing your bank (the open banking one worked for us), then logging into that bank account with your online banking details. Then you can choose the specific account to import and the range of dates you want to import transactions from. Both HSBC and Lloyds Bank worked fine.
If you can’t connect to your bank account, or if there are transactions missing, you can upload your bank transactions instead. First, you need to log into your online banking account and download your bank transactions. The download needs to be in the CSV format or some others might work, but not PDF. Once you have that click on Banking in MyT, then Import Data. Then choose the file you downloaded click on Import, then match the filed names. Make sure you select the correct bank account to import the data into.
To manually add bank transactions on MyT Accounting, just select either Spend Money or Receive Money, then Add Transactions.
Once your transactions are imported into MyT, you’ll need to categorise each one. For manually added transactions, you will have done this when adding the transaction. Click on the bank account, then click Review alongside the transaction. Then select the correct category and any other details required such as name and VAT rate, then Add. If it relates to a sales invoice or purchase bill, use the View More Match Options to allocate it against the invoice/bill. There are also options for Transfer and Credit Card payments.
Preparing and submitting VAT returns on MyT is very easy once you’ve entered the VAT settings and connected the account to HMRC. Just click on Taxes, Prepare VAT for the period, check the numbers, then submit. To check the numbers you can click on them, or rather than clicking Prepare there are other options to view different VAT reports.
MyT provide a basic suite of useful reports, including the ones shown below. You can export the reports into a spreadsheet or PDF file. Our MyT review on reporting is 3/5.
There’s telephone support which is great. It’s fairly new software so there aren’t many support articles yet.
Our QuickBooks rating for support and other features is 2/5.
Overall we rate MyT Online Accounting 3/5 which for brand new software which is good. It’s a cheaper alternative to Xero and QuickBooks but doesn’t provide as much functionality or time saving features. However, it has the AI receipt/invoice reader built in which could save you a lot of money compared to using Dext alongside Xero or Quickbooks. At CloudBook Online Accountants, we help out clients with whichever online accounting they choose to use, all for a low fixed monthly fee. See our prices or get an instant quote below.About Us Our Prices Instant Quote
Are you searching for a reliable accounting solution to streamline your financial operations? Look no further than the AI powered MyT accounting software! We, as dedicated MyT accountants, are here to revolutionize your business finances. We can do this by leveraging the power of AI with MyT accounting software. Say goodbye to tedious manual calculations and paperwork, and embrace a smarter, more efficient approach to managing your accounts.
1️⃣ Expert Accountants: Our team of seasoned professionals possesses extensive expertise in accounting and finance. So we understand the intricacies of financial management and can provide you with valuable insights to enhance your business’s profitability and growth.
2️⃣ MyT Software Specialists: We specialize in working with the cutting-edge MyT accounting software. Our in-depth knowledge of the platform allows us to maximize its features to suit your specific business needs. So we’ll guide you through every step of the process. Ensuring a seamless transition to the software and providing ongoing support.
3️⃣ Tailored Solutions: We understand that every business is unique, and there’s no one-size-fits-all approach to accounting. So our dedicated team takes the time to understand your business model, goals, and challenges. We then customize the MyT software to align with your requirements. Ensuring you have a tailored solution that fits like a glove.
4️⃣ Efficiency and Accuracy: With our accounting expertise and MyT software, we guarantee enhanced efficiency and accuracy with your bookkeeping. That is from managing transactions and generating invoices to tracking expenses and reconciling accounts. Our streamlined processes will save you time and reduce the risk of errors.
5️⃣ Cost-Effective Solutions: We believe that professional accounting services should be accessible to businesses of all sizes. So, by leveraging MyT software, we can offer cost-effective solutions that deliver outstanding value for your investment. Our MyT accountant services will streamline your finances and also help you make informed financial decisions for your business’s success.
6️⃣ Ongoing Support and Training. We don’t just set up the MyT software and leave you to figure it out on your own. Our commitment extends beyond implementation. That’s because our MyT accountants support team is always available to address any questions or concerns that may arise.
Don’t let accounting complexities hold your business back. Embrace the power of AI accounting software with MyT software with our expert accounting services. So, by partnering with us, you’ll experience seamless financial management. As well as accurate reporting, and the freedom to focus on what you do best—growing your business.
Contact us today for a consultation and let’s unlock the full potential of MyT accounting software for your business’s success!About Us Our Prices Instant Quote
From April 2023 CloudBook Online Accountants’ prices are increasing by 10%. This is their first increase in pricing since the accountancy firm was formed in 2013. The reasons for the increased accountants pricing are explained below. You can see our accountants prices here.
Our current prices were set when we started CloudBook Accountants in 2013. During the 10 years since then, we’ve managed to absorb increasing costs and tax rates by finding more efficient ways of working which has allowed us to grow the accountancy business.
However, inflation has been about 10% for nearly one year, interest rates have increased by at least 3.9% in just over one year, and corporation tax is increasing in April 2023. If we tried to grow our business enough to cover these additional costs, it would be detrimental to our quality of service. As such, we need to increase our accountants prices fees to keep our business model sustainable.
So we’ve taken the difficult decision to increase all of our prices by 10% from 1st April 2023, and we gave our clients two months’ notice of this change. Any software recharged will only increase if your supplier increases their online accounting price. All invoices from 1st April 2023 will reflect our fee increase.
|Example package prices||Current £||New £||Change £|
|Xero Starter (discounted)||11.90||11.90||+0|
If you are a new client signing up with CloudBook Online Accountants before April 2023, you will pay the current pricing for your first 12 months with us, then you’ll move onto our new prices.
We understand that these are challenging times for everyone and any increase to your costs can be difficult to deal with. So please get in touch if you’d like to discuss what options you may have to reduce your costs, such as changing your accountancy package (and the price you pay) or software supplier.
Some of you are paying for our services in arrears. For example, if you started paying us the monthly accounts price X months after the start of your accounting year, our invoice will state that the accounts price is for the month of trading X months ago. If so, you are welcome to pay off the arrears (X months times by the monthly accounts price) at the current price by 31st March 2023. Otherwise the new price applies to all payments from 1st April 2023.
Some of you are paying for our services annually. If you provide us with your accounting records by 28th February 2023, giving us the requested 1 month’s notice, this will be invoiced at the current price. Any annual records provided after this date, may be invoiced at the current or new price, depending on when we upload the accounts.
We hope that you find the increase to CloudBooks Online Accountants’ prices acceptable and necessary to maintain our quality of service. As well as the reasons stated above, we have also made various improvements to our services recently, such as providing you with quicker response times, annual reviews with accounts, quarterly reviews with VAT returns, and an improved website with useful guides and frequently asked questions.
Please get in touch if you have any concerns, questions or suggestions.About Us Our Prices Instant Quote
If you’re new to business you’re probably wondering what is bookkeeping? Why do I need to do bookkeeping? And how do I do the bookkeeping? To help you answer these questions, here we explain what bookkeeping is and the theory behind it. How to do the bookkeeping is explained on our other posts: bookkeeping using spreadsheets and on our bookkeeping using software posts.
Bookkeeping is the process of recording all of the financial transactions of a business. The financial transactions would include sales, purchases, income, payments, vat, payroll etc. Historically, each transaction would be written in one or more books by a person known as the bookkeeper. Nowadays we use spreadsheets and online accounting software to help us keep the books.
You need to do the bookkeeping to have a record of every financial transaction. You need bookkeping records to be able to prove to the tax inspector how much tax is due. It is a legal requirement of directors of companies to keep up to date bookkeeping records. Other businesses are also required by HMRC to keep bookkeeping records as evidence of how much profit has been made.
Accountants use the bookkeeping records to check that transactions have been recorded correctly. Then they prepare reports on how much money the business has made (profit & loss report). And how much money it owns and owes (balance sheet). These reports also help to work out how much tax is payable.
Online accounting software deals with the technical aspects of bookkeeping for you. So you don’t really need to know the theory behind bookkeeping. However, a general understanding of bookkeeping theory can help you understand how to use online accounting software.
The main method of bookkeeping is called double entry, where every transaction would be entered into 2 different books. Like a gangster film, where one set of books are accurate and the other set is for the tax inspector? No! There are several books that make up whole bookkeeping system. For example a sales book, purchases book, bank book. Each transaction would have a double effect on the business’s finances and in its books. For example, when a business buys stock with cash, it has increased its costs and reduced its cash. That’s a double effect, so the transaction would be recorded twice. Once in the purchases book and again in the cash book.
For another example, let’s say the business sells the stock on credit (buy now pay later). The first double entry will be in the sales invoice book, showing the invoices owed to the business. The other entry will be in the nominal ledger to show that a sale has been made. When the customer pays the invoice, this is a new transaction that requires another double entry. One entry is to the sales invoice book to mark the invoice as now being paid. The other is to the bank book to show that the bank balance has increased.
Each bookkeeping entry is either a debit or a credit. A double entry must be opposing, so one is a debit and the other is a credit. This way, all of the debits totalled up should equal all of the credits totalled up. So the books are balanced and the accountant is happy! To remember whether something should be a debit or credit can take years of practice until it finally clicks. But here are the rules:
|Debits||Costs, Assets||Sales, Liabilities|
|Credits||Sales, Liabilities||Costs, Assets|
Sales and costs are self explanatory, but we should explain what we mean by assets and liabilities. Assets are the things the business owns or is owed. For example: equipment, stock, cash in the bank, money owed from customers. Liabilities are the things that the business owes. For example: money owed to suppliers, bank loans, tax owed to HMRC. Shares and profit reserves are also liability accounts because they are ultimately amounts owed to the shareholders. However, software often refers to these as equity accounts.
So we have four main types of accounts:
The profit and loss report shows the sales and costs. The balance sheet shows the assets and liabilities. The difference between the sales and costs (profit or loss) is added to the balance sheet. This is done in an account called retained earnings or profit or loss which makes everything balance.
We bring together all of the different accounts at the end of a period of time (usually 1 year). We list all of the sales, costs, assets and liabilities accounts along with their total debit or credit balance. This ‘Trial Balance’ report is to check that the total debits equals the total credits, and everything balances. Then we summarise those amounts on the profit and loss report and the balance sheet report.
Do you need to know this if you use online accounting software such as Xero and Pandle?. Well, knowing the basics of what bookkeeping is can help you understand how online accounting software works. Also, how to use it correctly. It seems you are only making one entry onto the software. But in fact, the software is itself dealing with the double entry, and keeping everything balanced.
Creating a sales invoice on your accounting software will add the total amount to the balances owed from customers (asset). It will also add the net amount of the invoice to sales (sale). If VAT is applicable it will also add the VAT amount to the VAT account (liability). When the bank income appears on your accounting software, you know that you’ve already added that sale to sales. So you know not to categorise the income as sales. Instead, you need to record it as a sales receipt and match it to the sales invoice. Then the software will increase the bank balance, and reduce the amount owed from customers.
Likewise with a bank transfer. If you move money from one business bank account to another, you need to record this as a bank transfer. When you deal with one side of the bank transfer, your accounting software will create the other side. In the other bank account, you know you’ve already created the other side of the bank transfer. So you just need to match it with the transaction that’s already there from the first bank account. If you create another transfer, you will end up with duplicate transactions in both accounts.
Knowing what bookkeeping is can also help you adjust your online accounting too. We often call these adjustments journals. A journal changes the balances of your accounts, without the use of bank transactions, or sales or purchase invoices. Every journal needs to balance, i.e. the total debits equal the total credits, to keep the accounts balanced.
If you pay wages, the wages payment doesn’t usually reflect the full cost of the wages. That’s because of the tax deductions reducing the gross wages to net wages. So you could use a journal entry to record the full cost and the taxes due. You would debit the gross wages and any employers NIC to the cost accounts. Then credit the net wages to a liability account, and credit the total PAYE/NIC to another liability account. Then when you pay the wages, you know that you’ve recorded the cost already. So the payment needs to categorised to the net wages liability account (as a debit to offset the earlier credit). Similarly with the PAYE/NIC payment, you need to categorise that to that liability account too.
If your payroll software is part of your online accounting software, it should automatically enter these adjustments for you. However, it helps to know what it has done so you can deal with the payments correctly.
To sum up, bookkeeping is a very important process of recording all business transactions. It is a legal requirement for all businesses. The theory of bookkeeping (double entry debits and credits) will help you to understand how to use online accounting software.
If you need help with the bookkeeping, we can do that for you as part of our Monthly package. Or we can guide you through it as part of the advice included in our fixed fees. You can see our fees and get an instant quote using the buttons below.About Us Our Prices Instant Quote
QuickBooks online accounting software provides small businesses a solution for their accounting and payroll needs. We are QuickBooks Accountants. We have many clients that use QuickBooks to do their online bookkeeping, VAT returns, management accounts, and payroll. We also do bookkeeping for our clients using QuickBooks. You can see all of our fees and get an instant quote from the menu above. This is our QuickBooks review covering their online accounting software.
This is our QuickBooks review which gives a detailed opinion on various parts of the software. If you’re looking for a quick review of QuickBooks, our overall rating is 4/5.
Even though prices range from just £8pcm up to £70pcm (plus VAT), we’d say QuickBooks is a mid-range option. The Essentials plan should be sufficient for most small businesses which is £22pcm and is £6pcm cheaper than the Xero standard plan. Our QuickBooks review for cost is 4/5.
QuickBooks could be more intuitive at times but once you get used to it, it’s quite easy and quick to use, with a clear layout. Read on below for how easy it is to do various things on QuickBooks. Our QuickBooks review for overall ease of use is 4/5.
To add new sales and purchase invoices, just click on New, select Invoice or Bill, then add the details to each section. The layout is in the style of an invoice, so it’s clear what information needs to go where. There is an option to make recurring, which can save a lot of time. You can also add payment options to give customers an easy way to pay the invoice. Adding attachments is a useful option which will make it easy to find the original bill, or to show the customer their order. Once you’ve finished you can select various actions such as Save and Send, or Save and New.
Connecting Bank Accounts was easy but with mixed results. It involves choosing your bank, then logging into that bank account with your online banking details. Then you can choose the specific account to import and the date you want to import transactions from. HSBC worked fine, but there was a unknown problem with Lloyds Bank and it said to try again in a few hours. However, a second attempt using a different account worked.
If you can’t connect to your bank account, or if there are transactions missing, you can upload your bank transactions instead. First, you need to log into your online banking account and download your bank transactions. The download needs to be in the CSV format or some others might work, but not PDF. Once you have that click on Banking in the QuickBooks. Then (not very intuitively) click on the drop down next to Link Account, and Upload from File, then select your downloaded file. At this point you can either select an existing bank account, or add a new one. You’ll then need to look at the downloaded data and select the correct options on QuickBooks. For example, which column contains the money received.
To manually add bank transactions on QuickBooks Online Accounting, you need to work out what kind of transaction it is first. Then click on New and choose from Customer payment, Sales receipt, Supplier expense, Cheque, Pay bills, Bank deposit, Transfer, Pay credit card. Within the options for each of these, you can choose which bank account it applies to.
Once your transactions are imported into QuickBooks, you’ll need to categorise each one. For manually added transactions, you will have done this when adding the transaction. Click on the bank account, then For Review, which will bring up all of the transactions that need to be categorised. To do this, click on the transaction, then select the correct category and any other details required such as name and VAT rate, then Add. If it relates to a sales invoice or purchase bill, use the Find match option. There are also options for Transfer and Credit Card payments.
QuickBooks will try to suggest matches to invoices and bills. If it’s correct, you can just click on Match. It may also suggest the category etc to use, and if everything is correct you can just click Add.
You can set up rules to deal with transactions that meet a set criteria. Again if this rule is correct, just click Add. To add a new rule, click on the transaction, then create a new rule, then set up the various options. For example Description, Contains, Vodafone, and Telephone Expenses, 20% VAT. The Auto-Add option will add the transaction automatically so you don’t need to click on Add every time the rule is applied.
If the options above don’t help, you will need to go through each transaction. You can put them in order of description or payee, then you can bulk categorise similar transaction. This is done by ticking all the transactions that need the same options, then Update, then select the correct options, Apply and Accept.
Preparing and submitting VAT returns on QuickBooks is very easy once you’ve entered the VAT setting and connected the account to HMRC. Just click on Taxes, Prepare VAT for the period, check the numbers, then submit. To check the numbers you can click on them, or rather than clicking Prepare there are other options to view different VAT reports.
QuickBooks provide a good range of useful reports, most of which can be tailored slightly to show different data over different periods. You can also save a customised report to save time in the future. Our QuickBooks review on reporting is 4/5.
There’s no telephone support, but there’s usually an online chat facility available which has answered various questions for us in the past. The help button also tries to provide guidance and videos related to your search, before offering the contact options.
The integrated payroll facility (from £2pcm) allows you to prepare, send, and submit all the necessary payroll reports. As it’s integrated, it makes the accounting adjustments automatically so you don’t need to worry about importing or adding the payroll amounts yourself.
The bank reconciliation feature walks you through how to check that the bank balance on QuickBooks is the same as the bank balance on your bank statements. Reconciling the bank is vital to ensure that there are no errors and this provides an easy way to do this. However, it’s an extra job to do which may not happen. We prefer Xero’s method of continuously comparing the balance for you so you can investigate if it doesn’t agree.
Our QuickBooks rating for support and other features is 4/5.
Overall we rate QuickBooks Online Accounting 4/5. It’s a cheaper alternative to Xero but provides just as much functionality in the main product. At CloudBook Online Accountants, we help out clients with whichever online accounting they choose to use, all for a low fixed monthly fee. See our prices or get an instant quote below.About Us Our Prices Instant Quote
If you want to do your bookkeeping using a spreadsheet, such as Excel, Google Sheets, or Numbers, we explain how to do that here. It might actually be easier to use free online accounting software such as Pandle, as explained in this post. But if you prefer a quick simple solution then bookkeeping using a spreadsheet might be best for you.
First, you need to work out how many spreadsheets you need for your bookkeeping. You’re going to need one for every bank account and credit card account that is owned by the business. You’ll also need one for the director’s/owner’s own expenses – so things they have paid for the business using personal funds. The reason for having a separate spreadsheet for each account, is so that you can check it agrees with bank statements.
For every spreadsheet, the total income, minus the total payments, should equal the change in the bank balance. If it doesn’t there are errors, such as missing lines, extra lines, or incorrect amounts. [Tip: to help find errors, add a column for ‘Balance’ to enter the starting bank balance, plus the income or minus the payment in each line, then copy down to give you a running bank balance. Then compare this with the bank statement balance to find where the difference starts].
You could try to put everything on one spreadsheet but you will need to add a column for the ‘account’ so you can filter the transactions for that account to check it agrees with bank statements. It could get complicated and messy but it means everything is in one place.
You need to start with the basic transaction data which can be taken/downloaded from bank statements. So, date, payee, description, and amount. Each of these will be a column on your spreadsheet with each transaction taking up a row. You then need to decide on the layout of each spreadsheet. Every transaction needs to be categorised (e.g. sales, travel costs, telephone, VAT), and there are a couple of ways to do that.
The first and simplest method of bookkeeping using a spreadsheet is to add a column for every category you need, then copy the transaction amount and paste it into the most appropriate column. Then you can add formulas to sum the total of each column. You will need to check that the total of all the columns agree with the total income minus total payments. If it doesn’t, either a transaction amount hasn’t been copied across, or has been copied across into more than one column, or the amounts in the category columns don’t add up to the transaction amount.
One advantage of this method is that you can easily split one transaction between categories, e.g. VAT and software, or travel and meals, or sales and bank fees. Another advantage is that you can see from the totals how much is in each category.
The second method of bookkeeping using a spreadsheet is to label each transaction with the category. You can do this by adding a column for category, then typing or copying the name of the appropriate category in each line under the category column. You need to use consistent category names, so not all of Tel, Phone, Telephone, Mobile! [Tip: when you are typing a category, the spreadsheet will try to guess which word you are typing based on the words above it – use that suggestion if correct].
The advantages of this method are:
With both methods, if you are VAT registered, you’ll need to add a column for VAT to enter the VAT amount if applicable [Tip: divide the gross amount by 6 for 20% VAT], and a column for the net amount (excluding VAT). It’s the net amount that needs to be categorised.
Hopefully you now have a clearer understanding of how to do your bookkeeping using a spreadsheet. After reading this you may prefer to try doing your bookkeeping using online accounting software. It can be free, it can be easy to use, and it can save you a lot of time. Either way, we can help you with your accounts, tax returns, and VAT returns etc, all for a low fixed monthly fee. You can see our prices and get an instant quote following the buttons below.About Us Our Prices Instant Quote
The easiest way to do your bookkeeping is to use online accounting software. It automates a lot of the bookkeeping for you, so you don’t need to be an accounting expert. You can also get free online accounting software, so it’s worth giving it a try to do your bookkeeping. Also, if you’re a sole trader or landlord, you will have to use some sort of software from April 2024. So you might as well use online accounting software for everything. This is our general guide on how to use online accounting. For specific guides see our software reviews.
The heart of any online accounting software is the banking and this is where the investment really pays off. Most online accounting software can automatically import your bank transactions – they just appear! If not you can download a CSV/Excel bank statement from your online banking, then upload it into your online accounting software. Otherwise, you can manually enter transactions but that’s not going to save you any time.
Once your transactions are on the software, you then need to tell the software what to do with each transaction. We call that categorising it, but others call it explaining, reconciling, adding, tagging, labelling. Whatever it’s called it’s the process of allocating that transaction to the correct place or ‘account’. That could be Sales for income. Payments could be to Telephone, Travel, Rent, Materials, Wages etc. There are some really nifty timesaving tools in this part of the process. Some online accounting software learns from what you did with a similar transaction before and automatically suggests doing the same again. Some also allow you to set up bank rules, where if a transaction meets the criteria you set, e.g. the payee is Vodafone, the software will automatically put it to the Telephone account with standard rate VAT selected.
The bank balance on the online accounting software at any date, should always agree with the bank balance on your bank statements at the same date. This is what we mean when we say the bank is ‘reconciled’. If you have an automatic bank feed, you still need to regularly check that the bank is reconciled, very occasionally the feed has gaps and duplications. This can also happen if you import bank statements using a CSV/Excel file – overlapped or missing transactions. It easily happens if you enter bank transactions manually. Some online accounting software has a separate Reconciliation feature, where you enter the bank balance for a date then compare/tick off the transactions on the software until it agrees. Others, like Xero, does it all together so you effectively reconcile the bank as you categorise the transactions.
It’s a really good idea to create your sales invoices using the online accounting software for several reasons. By doing this, you’re updating your online accounting software with the sales you’ve made. So it saves you from recording your sales again. A lot of online accounting software has an app you can use on your phone or tablet. So you can create a sales invoice while you are away from your computer before you forget! You can also email the sales invoice to customers and set up a payment service so the customer just clicks a button on the invoice to set up a payment. To save you from chasing payment, you can set up automatic reminders to do that for you. Finally, can run a report to show you exactly who owes you money, email statements, and chase customers yourself if necessary.
When you receive the money into the bank account, you need to match the income against the sales invoice. If you categorise the income to sales, you will have a duplicate amount in sales and an unpaid sales invoice.
Entering sales invoices is usually very easy, and looks just like a conventional invoice. Just complete all of the boxes in the usual places then click save.
You should also be able to enter purchase invoices (or bills). This will help you keep an eye on how much you owe to suppliers. Similar to sales, you will need to match bank payments to the bill rather than categorising the bank payment to the type of expense. Otherwise you will end up with a duplicate cost, and an unpaid bill.
Entering bills is usually very easy. Some online accounting software use a bill layout so you know exactly what to enter where, others use a one line format to make it quicker to add more than one bill.
Most online accounting software has a payroll facility. You might need to upgrade or pay for an add-on to use it. The advantage of using the payroll provided with your online accounting software is that it does the bookkeeping for you. It will put the wages, NI, and pension costs to the appropriate cost category. It also puts the amounts payable to the appropriate liability category. So it gives you accurate accounts without the need to make manual adjustments called journals.
If you use the payroll facility, or if you use journals, the actual bank payments will need to be categorised to the liability account, such as wages payable. Otherwise, you will end up with duplicate amounts in the cost account.
Using the payroll facility isn’t as easy as banking or invoicing. So we suggest you watch or read guidance provided by the software. You will need to enter general settings such as the reference numbers, pay calendars, whether the employment allowance can be claimed etc. Then you will need to add employees with all of their data and pay details. Once set up, every month/week you will start a ‘payrun’ check the pay and deductions for each employee, then update it. The software will normally automatically send the necessary reports to HMRC. You will need to send payslips to employees and physically pay employees and HMRC.
There are various reports you could run to help you check the bookkeeping looks ok, and to see how well the business is doing. You will be able to set the report dates to the period or day you want to look at.
The profit and loss account, or the income and expenditure report, shows you all of the sales, income, and costs of a business. Use this to see how much profit the business has made, to estimate how much tax you might have to pay. You can also check that there are no obvious errors with the bookkeeping e.g. are sales double what they should be because you use sales invoices and the bank income also goes to sales?
The balance sheet lists all of the amounts that the business owns, is owed, and owes, on a particular date. It owns equipment, stock, bank accounts. Customers usually owe money to the business (trade debtors), and suppliers might owe services to the business (prepayments). The business could owe suppliers money (trade creditors), owe customers services (deferred income), owe HMRC money (taxes payable), and owe the owners money (directors loan account, shares, profit reserves). You can use the balance sheet to check that the balances are what you expect them to be. For example, the bank balance agrees with bank statements, and trade debtors agree with how much you think customers owe you. If you’re a company, you can also use the ‘retained earnings’ at the bottom to judge how much profit reserves are in the company from which you can pay dividends.
Aged receivables, aged debtors, amounts receivable, are all the same thing. They list the amounts that customers owe to the business as at a certain date. It is usually retrospective, so if the customer has paid an invoice after the report date, the invoice will still show as unpaid on the report. Aged payables, aged creditors, amounts payable reports are all the same as above except it shows the amounts owed to suppliers. You can use this report to check that the bookkeeping has been done correctly. The amounts shown should agree with reality.
To various degrees of usefulness, the cashflow report should show how much money has come into and gone out of the business, and where. It will be similar to a profit and loss account except it is based on the payment of invoices and ignores the invoices. You could use this to help explain why your bank balance has changed. For example, you’ve made a profit but the bank balance is much lower, the cashflow reports shows that the money received from customers is lower, and the amount of tax paid is higher.
Using online accounting software makes it very easy to submit your VAT returns. You just need to make sure you select the correct VAT rate as and when you enter transactions. Then check the details on the VAT return before clicking ‘submit’ to HMRC.
The general ledger lists all of the transactions grouped by account/category for the dates selected. This is useful report to check that every transaction has been put to the correct account.
Depending on which online accounting software you use there may be other features to help you with the bookkeeping.
Your software may provide a mobile app as well as the full desktop version. The app will be useful for updating things while away from your desk. Such as reconciling bank transactions, creating and sending invoices, taking a photo of receipts and bills.
An expenses facility is a useful way of adding the costs that you incur personally. Such as business mileage and travel costs. However, if it costs extra there are other ways to make this easy, such as setting up a ‘dummy’ bank account just to enter your expenses.
If you buy and sell stock, you may want to make use of the stock or inventory management feature. This will automatically update the number of items you have when you buy and sell them. You can also enter values so the invoices are easier to create, and you can get a value of the stock held.
Journals are manual adjustments to your accounts. You usually wouldn’t need to use this but it could come in handy. If you find a mistake in your bookkeeping, rather than correcting lots of transactions it could be easier to make an adjustment. However, you need to know your debits from your credits! Debits increase a cost account, reduce an income account, increase an asset account, and reduce a liability account. Credits do the opposite of the above. Every journal needs to have total debits that equal total credits, so that the accounts stay balanced.
Fixed assets are the things used by the business in the long term. Such as a van, a computer, big tools, office furniture. If you’re keen to keep a list of the business’s equipment, you could use a fixed assets feature. This should be tied in with the payments/bills that you’ve categorised to a fixed asset account (e.g. computer equipment). So hopefully, you just need to add a few details, then add the item to the list. Then if you’re really keen, you can set up the depreciation adjustments. Depreciation is an adjustment that reduces the value of the fixed asset and reflects that as a cost to the business. So the full cost of the equipment isn’t shown on the profit and loss account straight away, it is spread out over several years.
This is the list of all of the accounts/categories used by your online accounting software to do the bookkeeping. Here, you can edit the accounts (name, VAT rate), add new ones, or remove ones you don’t need. If you add new ones, check that you select the correct type (e.g. income, costs, asset, liability).
Hopefully you have found this a useful general guide on using online accounting software to do your bookkeeping. If you have any questions you can ask us or your particular software provider.About Us Our Prices Instant Quote