Good accounting practice is one of the least liked and yet most important aspects of running a successful business; this article explores accounting services for small businesses in S.A.
Technological innovation has not only affected how we communicate and live but also more traditional functions like accounting. Many accounting software options for small businesses offer flexibility and ease of use at different price points.
However, before we can explore the different accounting software options available, it might be relevant to explain why accounting is important in the first place.
Although many entrepreneurs believe accounting is important, many often neglect it in favour of other functions like sales and marketing, hiring employees, etc.
Why you should have accounting
Cash Flow
Accounting helps you keep track of your business cash flow. In order to prevent your business from experiencing problems that come from insufficient funds, you need a great accounting system. An excellent accounting system guarantees efficient record-keeping and the formation of a sound financial strategy.
Costing
Accounting enables an entrepreneur to know and understand their fixed and variable costs. These are important in determining whether the business can thrive in the current conditions or not.
Financial reports
Accounting records help generate financial statements like balance sheets, income statements, and cash flow statements. These give a clear picture of the health of the business. Before an entrepreneur can attract outside capital, they must study their financial statements.
Fraud detection
An accounting system can help you detect fraud within the business to avoid losses. Because receipts and expenditures are meticulously recorded, you can tell when money is being siphoned on the side. For companies with complex operations, external auditing is all you need to gain an understanding of what’s really happening within your business.
Investor confidence
Businesses that maintain updated accounting records give investors, employees, and customers confidence in their longevity. This makes it easier to raise capital both privately and publicly in times of need.
Great accounting system to support your business
Now that you understand the importance of having a great accounting system to support your business growth, you might be wondering what the best accounting software for small businesses in South Africa is.
QuickBooks
This is one of the highly favoured accounting software platforms in South Africa. QuickBooks makes it possible to track expenses, produce detailed financial reports, track and pay taxes. One of QuickBooks’ most loved features is its customized built-in invoicing system.
Starting from as low as R126 per month, with a free 30-day trial, QuickBooks is one of the most popular accounting software platforms for South African entrepreneurs.
SME Snapshot
This South African company helps South African entrepreneurs, accountants, and incubators to understand financial analytics. From as low as R100 per month, subscribers can utilise tools to keep tabs on important metrics to determine the health of their business.
The founders of this platform understood how overwhelming it could be for an entrepreneur to keep an eye on every single business transaction. Therefore, they created a product that groups all the priority metrics in one place. Its easy-to-use interface makes it possible for entrepreneurs to quickly look at operating statistics and financials such as real-time turnover, cost of sales, net profit, and other vital information.
Zoho Books
This platform offers entrepreneurs the tools to take their business management to the next level. Zoho Books is a platform with great core functions and unique add-on features. Entrepreneurs can customize invoices, send detailed quote estimates, and so much more. South African business owners can also use the digital signature feature that makes it easy to approve transactions while also combatting forgery.
From roughly R1500 per month, the platform also has a great stock management feature that helps implement reorder-level notifications to prevent stockouts of vital products.
Sage
Whether you’re a sole proprietor or running a larger operation, Sage accounting software has the right tools to make business accounting a smooth process. This platform enables entrepreneurs to easily create reports, view finances, process VAT and international payments, and keep tabs on the latest laws in the financial world.
Clients and other stakeholders can share essential information and reports using its cloud storage feature. The additional advantage of Sage is that it’s quick, easy to use, and known for its great customer service.
Wave
This Canadian company with global operations provides both banking and small business software services. This accounting service is arguably one of the world’s best free accounting software. With a great user interface, the software can be used by anyone, even with basic accounting knowledge. The other key advantage of Wave is that it can be adapted to South Africa’s tax framework.
Since Wave’s financial statements are prepared following the International Financial Reporting Standards, the programme can therefore be used for billing, payroll, and accounting entries to financial statements.
Akaunting
This is a free open source and online accounting software created for small businesses and freelance professionals. The platform is built with modern technologies such as Laravel, VueJs, RESTful API, and others. Using this platform, entrepreneurs can monitor their company’s cash flow and determine liquidity at their own convenience.
The platform tracks spending and makes it possible to identify the big-ticket items that take the largest chunks of the company’s finances.
Money Manager EX
This is a free, open-source accounting programme that is highly user-friendly. The software makes it possible to monitor budgets and cash flow. This platform allows importing a CSV file from your bank into the software to get started.
Palladium Accounting
This is a multi-currency accounting software with the most updated accounting processing technology. Palladium has a friendly user interface making it easy to learn and utilise. It’s free and has the added benefit of providing cloud storage. This platform is an excellent choice for businesses with limited startup capital.
Sole proprietors and other small business owners might question the importance of having an accounting system dedicated to the business. Some argue that having one general account for both personal and business accounting is more cost-effective.
Let’s explore the advantages of having a proper company account regardless of which accounting software an entrepreneur chooses.
Easily track inventory
With a dedicated accounting system for your business, you can keep tabs on product levels, cost of goods and receive a nudge when you’re running low on inventory.
Manage bills
Track and pay bills when due to avoid falling behind. Most accounting software platforms allow entrepreneurs to create recurring payments, pay multiple suppliers at once, and pay bills when they are due.
Invoice and accept payments with ease
Receive payments fast with credit cards and bank transfers for the right invoices. You can also customize invoices to match your business branding material.
Capture and organize receipts
Most accounting software platforms enable capturing receipts using a functional smartphone. Receipts can then be matched to your business expenses.
In conclusion
The importance of accounting services for small businesses in South Africa cannot be overestimated. Whether you subscribe to QuickBooks, Akaunting, or Palladium, the benefits, such as tracking inventory, managing bills, and others, prove how vital these tools are to your business’ success.
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