How Xero will help your Sole Trader business
Helping you work
Software that helps you work smarter
More people are going out on their own, with sole traders representing up to a third of the workforce in some countries. Most sole traders are upbeat about the future - with three quarters saying their best work years are ahead of them.
Technology drives a lot of this optimism and growth. Online tools allow people to work from anywhere, automate processes, and manage their business without being tied to an office. Accounting software, for example, makes it easier to stay on top of tax, revenue, expenses and cash flow, and automate some of these tasks, without ever needing to sit at a desk.
Find out what accounting software can do and use this guide to help find the right package for your business.
Lightening the load by moving online
One reason why sole traders are optimistic is because technology has made it easier than ever to do business. Online or cloud-based software has streamlined processes and sped up the exchange of information. For example, you may already be using:
- online office tools like Microsoft Office 365 or Google Apps
- email services like Gmail
- cloud-based file storage
- social media to market your services and keep in touch with customers
- video conferencing to talk to clients and friends
- websites to reach new clients.
What’s left? Your accounting software. If you’ve moved everything else online, it makes sense to do the same with your accounts. There’s no point being tied to a single computer when cloud accounting gives you freedom.
Goodbye to spreadsheets
Choose the right tool for the job
It might be tempting to use a spreadsheet for your accounting data. But spreadsheet programs like Microsoft Excel weren’t designed to be a substitute for accounting software. You can quickly run into difficulties if that’s the way you’re using Excel. Here’s why:
- It’s hard to see an up-to-date picture
Spreadsheets don’t automatically update – they show you the static numbers, and not the meaning behind them. Accounting software helps you see your cash flow in real-time. Reports and graphs give you clear information and a sense of the big picture.
- Spreadsheets can be riddled with mistakes
It might be easy to start with a simple spreadsheet doing manual data entry and simple sums. But if you want your business to run efficiently, manual copy and paste techniques are no way to thrive and grow.
- Spreadsheets aren’t scalable
Sole trader accounting software is designed to grow as you do. It will help you with tasks like payroll, direct payments and automating your bookkeeping. And you’ll be able to share data with your accountant and bookkeeper remotely. No spreadsheet can do all of that.
- There’s no audit trail
Accounting software keeps track of every entry and who made it. This is called an audit trail and it’s a vital part of accounting. But anyone can change a spreadsheet, leaving no record of what was done or who did it. This leaves your business open to fraud.
You’ll know from running your own business that it makes sense to use the right tool for the job. So get this right the first time – and avoid problems later.
The benefits of online accounting software
If you use online accounting software for your business, there are many advantages. Here are some of the main ones:
- Access from any device
Log in to your accounting software from your laptop, smartphone or tablet. You’re not stuck using a single computer in an office.
- Simple, easy-to-use features
As a sole trader, you don’t need bloated software with unnecessary features. You need a package that does what it’s supposed to do – quickly.
- Data entry automation
Smart accounting software automates data entry and even follows up with customers regarding payments on your behalf. Instead of organising and manually typing data into your accounts, the numbers can flow in automatically from your bank and with the help of data capture tools. And you can set up automatic invoice reminders. Automation solves the major problems with accounting data entry by saving time, reducing costs and eliminating human error.
- Log in from anywhere
If you’re out and about a lot, sometimes it can feel like you have no fixed workplace. So you need to be able to work from wherever you are. Online sole trader accounting software lets you do that. Wherever there’s an internet connection, you can get to your accounts and issue or pay invoices.
- You don’t need to worry about technology
If you’re not technical, updating computer software can be a worry. With the best online software, that stress is taken away. Updates are carried out by the software company while you sleep – and your data is backed up automatically.
- Airtight security
Your accounts are confidential. With online accounting software nobody will have access to them unless you hand over your password. Cloud security is much safer than leaving data on your hard drive or a USB stick.