As a growing business, it quickly becomes apparent that rudimentary accounting and financial management software solutions, such as manual bookkeeping and paper-based systems, won’t suffice.

Ideally, you should invest in software as soon as you start your business. This will allow you to start recording financial data in a compliant digital format, encourage good bookkeeping habits and put you in good stead for meeting your tax requirements. With the right financial management software, you’ll also be able to track and analyse your current financial stability as well as make predictions about future performance.

However, if you’re yet to find the right solution, you’re in the right place. In this article, we’ll explain everything you need to know to help you choose a cloud accounting or desktop solution for your business. 

Why do I need business accounting and financial management software? 

As your business grows, so does the complexity of your financial management, and investing in some form of software is not just a nice-to-have, but a necessity. 

That has become even more true with the ongoing rollout of each phase of Making Tax Digital (MTD), which requires businesses that fall under its scope to keep digital financial records by law. 

Accounting software helps you meet these complex financial needs by assisting with recording, managing, and analysing financial transactions, monitoring expenditures, issuing and managing invoices, and creating compliant returns for tax purposes. 

Accounting software that also includes a financial management aspect can also provide real-time, in-depth reporting, data visualisation and financial analysis which gives you granular insights into the financial performance of your business that you can use to make confident and informed strategic decisions. 

What’s more, the automated aspect of most solutions results in a significant productivity boost for you and your team, freeing up more time to focus on growing your business and providing a great customer experience. 

With a robust accounting software solution, you’re empowered to optimise your financial operations and stay in control of your business’s fiscal health. 

What should you look for in accounting software? 

Fast-growth businesses need a solution that can cope with the demands of an ever-increasing volume of data, transactions, and tasks. 

 A comprehensive accounting and financial management solution, whether that be cloud-based or desktop with cloud connectivity, should include the following features: 

Invoicing and billing 

Issuing and chasing invoices is one of those never-ending business tasks that can be a real drain on productivity. Accounting software can automate the creation of professional-looking invoices, track payments from clients, and trigger automatic reminders if they’re not settled on time. 

Some solutions can even accommodate more complex billing needs. For example, if your business is project-based, you can use your software to cost bids accurately based on your historic data, combine multiple billing terms on one invoice, and even gain insights into everything from billed versus unbilled expenses to billable hours versus non-billable hours. 

And that’s just one example. With multiple invoice templates and rich data, whatever your needs, you can cut down on unnecessary admin, improve cashflow, and reduce revenue leakage.  

Advanced financial reporting 

Your chosen software should provide a variety of financial reporting options that give you real-time visibility into the performance of your business. Granular, in the moment transparency is great for identifying trends, from changes in revenue or profit to customer preferences and behaviour, that can inform impactful decision-making. You can also use this data to spot anomalies that could signal a problem, so you can act fast to rectify it. 

Finally, it’s useful to have a reporting feature that makes it easy to share insights across your business, especially one with excellent data visualisation tools. This improves cross-functional collaboration and allows teams to respond quickly to both issues and opportunities. 

Payroll management 

Automated payroll management is crucial, helping to take the headache out of paying your team accurately and on time. Your chosen software should assist with recording work hours, calculating taxes, and generating and sending payslips with ease. Payroll is sometimes included with accounting software and sometimes available as an addon. 

Bank reconciliation tools 

Quality accounting software should offer payment reconciliation features, allowing you to link your bank accounts and automatically reconcile transactions by comparing them to captured receipts and invoices. You can even apply rules to automatically flag transactions if certain conditions are met. For example, if a transaction has suspicious characteristics that could indicate fraudulent activity. 

By automating the reconciliation process, you can save time and reduce the risk of errors associated with manual data entry. 

Financial analysis:

One of the key benefits of financial management software is it helps you to assess your projects, budgets, and other finance-related data to determine how well they are performing and the potential risks associated.

Once any issues or risks have been identified, you can then actively address them and mitigate potential negative financial setbacks.

Tax return assistance 

It’s now compulsory for all VAT-registered businesses to keep digital records and file periodic VAT returns through MTD-compatible software. In 2026, this will also be the case for income tax and self-assessment, with corporation tax to follow further down the line. 

That means whatever accounting software you choose needs to be MTD compatible. An -accounting solution makes it easy to meet your tax obligations by automating the digital recordkeeping and tax return process. You can connect your bank feeds to automatically import transactions and match them with your invoices, and even forecast income to calculate your likely tax burden ahead of time. If you work with an accountant, you should also look for a solution that allows you to collaborate with them around tax planning.

Good accounting software will help to minimise tax-related stress and ensure you’re meeting your tax obligations in order to avoid penalties from HMRC. For example, all of Sage’s accounting solutions are MTD Ready and HMRC recognised.

Cloud-based

Cloud-based accounting software grants you access to your financial data from any location with an internet connection. This feature is essential for business owners who need to manage finances on the go. It also means your accounting solution is highly scalable, allowing you to upgrade your plan as your business grows to access more capacity or functionality. 

Need to insert a section here again on desktop – need to maintain an agnostic view and not favour one format of software. 

Integration capabilities 

Your software should easily integrate with other tools, such as e-commerce platforms, CRM systems, and point-of-sale systems. Seamless integration streamlines your processes and provides a unified view of your business operations. This boosts productivity and makes it easy for your different business functions to collaborate. 

Ease of use 

Finally, when selecting an accounting and financial management software package, prioritise an easy-to-navigate, user-friendly interface. A well-designed system reduces the learning curve and streamlines data input, transaction tracking, and report generation. And that will save you time, encourage collaboration, and reduce errors. 

Final thoughts 

The incredible features and capabilities of modern business accounting and financial management software can be almost overwhelming. But as long as you understand your requirements, you can find a solution that suits your business. 

The key thing for business owners is to find a solution that gets the most important features right, saving you time and resources, while also helping you to comply with your tax and regulatory requirements. You should also look for an accounting platform that meets the needs of your business, through specific features and customisability, and that can scale alongside you as you grow.

Sage offers a range of accounting and financial management software to meet your business needs, including:

• Sage 50 desktop accounting software with cloud connectivity, giving you a complete view of your business finances & inventory. Perfect for small to growing businesses.
• Sage Intacct, the leader in cloud accounting and financial management software. Perfect for scale-ups to global enterprises. Bespoke pricing, tailored to your business. 
• Sage accounting allows you to manage income and expenses with ease, master your cashflow. Perfect for sole traders and small business owners. 

Explore accounting solutions by Sage here.  

This article was written as part of a paid-for content campaign with Sage

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