Does my Irish business need accounting software?

We often receive questions about whether a business should be using accounting software. Today, quickly, we will discuss some benefits and the reasons why you may/may not want to use accounting software in your business.

What does the legislation and Revenue require:

There is no explicit requirement to use accounting software in your business. “Adequate Records” must by kept by a business to allow them to calculate and demonstrate their compliance with the likes of Corporation Tax, VAT etc. Regardless of how these records are maintained, these records need to be legible, accurate, retained for the required period etc but there is no need that an accounting software is used to meet the required standards – accounting software can certainly help though.

Why you mightn’t want accounting software:

Current Process: Your current process for maintaining records works fine and accounting software just mightn’t be needed by the business.

Pricing: The likes of Xero, Quickbooks and Sage are great tools but generally their annual basic costs are in excess of €250 which for a simple sole trader or a consultant with a limited number of business transactions might feel the cost is excess for the benefit they offer.

Learning Curve and time requirement: Like everything, there is a learning curve with implementing and managing accounting software which may outweigh the benefits.

 Why your business should get accounting software:

Reduce Errors: Accounting software can often link up with you bank accounts so makes the reconciliation of transactions easier and smoother. AI-powered reconciliations are currently being introduced by the major software providers which will further reduce the time spend on reconciliation by business owners.

Real Time View: Having your invoicing and expenses in an accounting software can give you live reporting on your company financials which is invaluable for making informed decisions about your business

Simplifies your Tax and Compliance Reporting: Accounting software can simplify your tax and compliance reporting by helping generate VAT returns as well as providing a one stop shop for your accountant/tax advisor to pull information and detail from. Using accounting software correctly and accurately is something that your accountant will thank you for.

Cashflow Management: Accounting systems are key cogs in tracking who a business is owed money from and who the business owes money to. Accounting software also can help generate customer invoices quickly which saves you time and can also sent out automatic reminders to customers for aging debts. Pay now buttons can also by implemented on the invoices and sync automatically with the accounting system to again help you get paid more quickly and accurately.