Bookkeeping Software – Ltd Company Essentials Accounting Course Part 3

31 Comments / Accounting Software / By

https://www.youtube .com/watch?v=H796ubqGvWc

Let’s walk through why you need (or want) bookkeeping software as part of our Limited Company essentials accounting course. Most importantly, we’ll go through what features you’ll want the software to have in order to be most useful. There are plenty of bookkeeping and accounting softwares to choose from so don’t be shy and try them out! Some features you can look out for: – Available Dividends / Shareholder’s Funds – Self-assessment tax returns – Corporation Tax Calculation or estimate – Payroll – RTI Submissions for your salary – Invoicing – Add out-of-pocket expenses – Setup automatic bank feeds for bank transactions – VAT tracking on expenses and income if registered – Ability to submit Making Tax Digital VAT returns – Anything you may need specific to your circumstances like CIS Our recommended accounting software is FreeAgent.They have the most user-friendly UI and the ability to show you a corporation tax estimate, plus shareholder’s funds in the company whenever it’s fully updated. All you really need to do is create your invoices, add any out-of-pocket expenses and upload the business bank account transactions. Make sure to explain them too so FreeAgent knows what the transactions are for. When it’s all up to date, you’ll be able to see the Carried Forward/Distributable balance which essentially confirms the total profit after all taxes have been accounted for such as VAT, CIS, Corporation Tax, and PAYE. The other helpful part is that FreeAgent has a simplified self-assessment form that you can use to directly submit your personal tax returns to HMRC. It can also track your estimated personal tax liability as you take dividends from the company. You’re never in the dark about what’s going on so that’s why we recommend FreeAgent. Other options include Xero, Quickbooks, Clearbooks and plenty more. HMRC has a Making Tax Digital list of approved software providers if you had another one in mind. Our second favourite bookkeeping software is Xero. The user interface is very straightforward. Just remember that Corporation Tax isn’t accounted for automatically so you’ll want to adjust for the available dividend figure. After all that, do you really need bookkeeping software? Well with Making Tax Digital it’s becoming essential. Even without MTD, accounting software will save you time, money and prevent mistakes that may cause other issues down the line. For new company directors it’ll make the entire process much easier if you stay on top of your bookkeeping with a reliable software. Stay tuned (subscribe!) for Part 4 of our Limited Company Essentials Accounting Course. #juniperlynx

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31 thoughts on “Bookkeeping Software – Ltd Company Essentials Accounting Course Part 3”

    1. Juniper Lynx

      I know FreeAgent has a mobile app that allows you to do everything the browser version is able to do. Xero also has a mobile app but I’m not sure on the functionality. If you’re in the UK, FreeAgent is likely your best bet because of the automatic corporation tax calculation & self-assessment feature, but feel free to check them all out with the free trials 😊

      If you’re not sure about limited company requirements and filings then I would really recommend finding an accountant to help you with everything. We’re here to make sure your company is in good standing with HMRC and that it doesn’t run into any compliance issues later on. It requires constant research as HMRC’s interpretations can change regularly.Β You may not even know what you’re doing wrong until HMRC investigates it 3-5 years later which is not a situation you want to end up in! I don’t want to scare you too much but these are all real possibilities which put your company at risk. A competent accountant is almost necessary with limited companies unless you’ve studied to become one (which you’re more than welcome to do 😊)

  4. kevin matthews

    Hi Caroline, nice video as usual, 1 question i have for you though,is which software would you recommend for a amazon fba ltd company seller, one that has the potential for EU VAT calculations built in (or addable to), and the 2nd question is do i have to use the same software as my accountant ?? looking forwards to your reply

  9. Kieron O'Meara

    Hi Juniper, I just discovered your channel this evening for the first time I only registered as a limited company last week I do agree with R L
    ‘s comment that you should take full advantage of people signing up to these software I am however wondering if looking at this link now https://www.xero.com/blog/2019/03/xero-is-mtd-ready/ has in fact begun to be mtd compatible could you please take a look and confirm or deny this I’m still too much of a newbie to know what’s going on

    1. Juniper Lynx

      Thanks for your comment! An accountant can of course take care of things for you (including bookkeeping), but if you wanted more control over what’s happening in your business then accounting software is a very powerful tool.Β 

      Many accountants have started including the software as part of their services (like we do). This way you can collaborate on the accounts throughout the year, rather than just receiving a random tax bill every so often and not understanding where it came from. It’s a personal choice really so you’re welcome to choose the method that works best for you 😊 As long as everything is taken care of correctly, there is no problem either way.

    1. Juniper Lynx

      Personally I don’t find quickbooks very easy to use and I’ve had similar feedback from those that have switched to FreeAgent.

      If you’re interested in a particular software, most of them offer a free trial so you can check out the features for yourself. Quickbooks would have everything you need, it’s just question of how easy it is and whether you enjoy using it 😊

    3. Juniper Lynx

      @acidrain55 In that case if you’re based on the UK, I personally prefer FreeAgent right now. It can do everything like calculate available profit for dividends if everything is up to date. It even has payroll functionality so you can run a salary for yourself. VAT is also included but if you’re just starting out there is no need to worry about that 😊 There is a self-assessment section so you can check what your upcoming personal tax would be too.Β 

      Ultimately though you’ll want an accountant to help with producing the year-end accounts and self-assessment. If you want guidance on allowable expenses etc and what could be considered a benefit in kind by HMRC, then a monthly accountancy service would work well for you (rather than just a one-off accounts service at the end of the year).

  12. Shamila wright

    Thank you Caroline, very helpful. I am planning to start a small online shop and not expecting much profit for a while. So can not afford an accountant. Could you say if I put bit of effort I would be able to do everything without an accountant? My other question is, do you have any advice on insurance for online shop? Once again – thank you so much.

    1. Juniper Lynx

      While you could start with trying to work out the accounting basics yourself, there are massive amounts of information to go through and it’s highly likely some mistakes would be made. These could have negative implications later on (so you may not know for years!). I would recommend getting an accountant as soon as you have some cashflow in the company. In the long run it’ll more than pay for itself. Online shops can be quite complex with VAT laws so it’s best to get the right advice before hitting the registration threshold of Β£85k turnover.

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