What is the Best Accounting Software?

So, what is the best accounting software? Well, there is no such thing. You could, of course, say what is the best accounting software for my particular business, to which there may well be a definitive answer, but on the whole there is no correct answer to this question.

 

What is evident, and we have found this from the accounting and bookkeeping software reviews that we have carried out, is that there are a lot of very good accounting and bookkeeping software applications on the market. Products such as KashFlow, Clear Books, FreeAgent, Xero, and the various offerings from Sage, all provide very viable, low-cost, solutions for sole traders and small limited companies.

Online (web-based/cloud) or installable software

In recent years there has been a move away from accounting software that you download (or buy on a CD/DVD) and install on your own computer towards accounting software that is provided online ie web-based / cloud solutions.

There are pros and cons for both approaches, but the recent Heart Bleed security issue that hit OpenSSL has highlighted the point that anything that is stored or used on the World Wide Web is not completely 100% secure. The Internet and World Wide Web are based on hardware and software developed by humans and as such will always be at risk of containing bugs or faults that could potentially be exploited by talented hackers. For years, we thought that SSL meant that a web site was completely secure – now we know that that was not the case.

Having said that, it is a fair assumption to make that online accounting solutions are pretty safe and offer a very convenient way of recording and maintaining your company accounts. For a start, web-based accounting software is normally available from any web-enabled device such as a PC, laptop, mobile phone or tablet. Of course, some online accounting software applications work better than others on, say, a mobile phone, so it’s best to try out a few possibilities if you think that this is a feature that might be useful for your business. Being able to access your accounts from virtually anywhere at anytime is a great advantage that online solutions offer though.

 

However, if you ask the question – which is the most secure – online or installable? I would have to opt for installable. After all, with installable software you have the option of installing it on a computer that is not connected to the Internet, making it completely safe from attacks from hackers. Of course, if your house gets burgled and your computer is stolen, or your computer’s hard disk crashes, you’ll lose everything unless you’ve remembered to back things up.

Also, with online solutions you are always using the latest version of the software/application. This is really good as it means that as new features become available, you will in general have access to them. With installable software, you may well be stuck with the version you bought, or you you may have to pay (probably will have to pay) to upgrade to the latest software version.

With online solutions there will probably be a monthly fee to pay, which is normally in the region of £15 to £20 per month, whereas with installable software there is normally a one-off payment, which varies dramatically depending on the software you go for, but is typically in the area of £250 to £300.

Online versions normally have free, ongoing, help available, whereas installable software comes with support that lasts for a limited period of time unless you buy a support package. The advantage with help that’s provided for online software is that the provider can, if necessary, assess your account and resolve any issues. This is not so straightforward for software that you have installed on your computer’s hard disk.

Free or paid for

So, is it worth paying for accounting software when there are plenty of free solutions available, for example, Quick File, Earnings Tracker, VT Cash Book, Adminsoft Accounts, TurboCash, GnuCash, and Brightbooks … to name but a few. Well, I guess it’s a case of whether you can find a free accounting software application that does the job for you – if you can then, yes, go for it, as there really is no point in paying for software when there’s a free alternative that does what you need it to.

It’s also worth remembering that although products like KashFlow, Xero, FreeAgent and Clear Books are all excellent solutions, it may well be that they offer functionality than you just don’t need – functionality that you would be paying for if you bought the software. For this reason it is always a good idea to take advantage of the free trials that all of these products offer, giving you the chance to evaluate them before handing over any money.

It’s also worth looking at whether a free bookkeeping spreadsheet will suffice. This really is the simplest solution and will be sufficient for some people that are running very basic businesses. Of course, this won’t be a sensible solution for most people, but it’s certainly worth looking at and may well form part of a larger accounting / bookkeeping solution for your business.

Conclusion

Whether you decide to go for a free product or a paid-for product, the essential thing is that you get the right product for your business. Take your time in choosing something and try out as many possibilities as you sensibly can. Don’t be tempted to go for the ‘all singing all dancing’ solution unless you really need it, otherwise you’ll just be paying for functionality and features that you don’t need.

Bear these pointers in mind when choosing accounting software for your business:

  • It needs to save you time so that you can concentrate on running your business
  • It needs to offer the right amount of functionality for your business
  • It needs to be easy to use
  • It needs to be affordable

… and here’s a few suggestions to look at

Free accounting / bookkeeping software:

AdminSoft Accounts

BrightBooks

Earnings Tracker

GnuCash

TurboCash

VT Cask Book

Paid for accounting / bookkeeping software:

AccountsPortal

Clear Books

FreeAgent

KashFlow

MyBookkeepingManager

Sage

Xero

Bitcoin Shop Appoints Alliance Investors – Plus Other News

bitcoin shopBitcoin Shop, Inc. (www.bitcoinshop.us), the virtual currency ecommerce marketplace, today announced the appointment of Alliance Advisors as its investor relations firm. Located in New York City, Alliance Advisors is a comprehensive investor relations, market intelligence, corporate communications and strategic consulting services firm that has represented well over 300 United States publicly listed companies located in the Americas, Asia, and Europe.

Read the full article here: http://uk.finance.yahoo.com/news/bitcoin-shop-appoints-alliance-advisors-130000244.html.

Bitcoin Bugs Invest in China Bitcoin Exchange

Despite China’s recent crackdown, the bitcoin cryptocurrency has been given a new lease of life in the world’s second largest economy.

The company that claims to be China’s largest Bitcoin exchange by volume has announced a $10m Series A funding round. Venture Capital firm Ceyuan led the way and was followed by Mandra Capital, Ventures Lab and a string of other Angel investors.

This amounts to one of the largest cases of Bitcoin financing so far. Recently OKCoin became China’s first virtual currency trading platform.

You can read the full story here: http://uk.finance.yahoo.com/news/bitcoin-bugs-invest-10m-chinas-largest-exchange-125415569.html.

Warren Buffet Says Bitcoin Has No Itrinsic Value

US billionaire Warren Buffett said bitcoin is an effective money transmitter without any intrinsic value and warned people to “stay away from it”.

During an interview with CNBC, the CEO of Berkshire Hathaway compared the popular digital currency to a “very fast money order.”

“It’s a mirage basically, it’s a method of transmitting money, it’s a very effective way of transmitting money and you can do it anonymously and all that… a cheque is a way of transmitting money, too. Are cheques worth a whole lot of money?” he said.

However, he admitted that bitcoin is a promising technology.

You can read the full story here: http://uk.news.yahoo.com/bitcoin-very-fast-money-order-without-intrinsic-value-090822277.html#gkadHIq.

Nakamoto Denies Bitcoin Involvement

The man Newsweek claims to be the father of Bitcoin has issued an unconditional denial that he had anything to do with the creation of the cryptocurrency, reports Reuters Felix Salmon.

The American magazine claimed the 64-year old Dorian Satoshi Nakamoto was the same person as Satoshi Nakamoto who invented Bitcoin.

Nakamoto has denied any involvement with the bitcoin digital currency and said the allegations had damaged his career prospects and led to confusion as well as stress for members of his family.

You can read the full story here: http://uk.finance.yahoo.com/news/nakamoto-unconditionally-denies-newsweek-bitcoin-story-090403355.html.

Never a Dull Moment for Bitcoin !

These days I seem to come across news about Bitcoin every time I go on the web, and this week has been no exception. Here’s a quick round up of what’s been happening over the past few days.

Mark Karpeles Has Web Accounts Hacked

It hasn’t been a good week for Mark Karpeles – the CEO of collapsed bitcoin exchange MtGox – as it emerged that he has had some of his web accounts hacked.

Mark Karpeles - MtGox CEO

Mark Karpeles – MtGox CEO

Following the closure of MtGox in February, there has been growing frustration from people who have lost money due to MtGox’s collapse, over the recent actions (or lack of) of the company. Some people have claimed that Mr Karpeles lied about the number of bitcoins MtGox had before it filed for bankruptcy. As a result, hackers have stolen account transaction information belonging to Mr Karpeles.

It is claimed that the stolen information shows a ledger balance of 951,116 bitcoins, which is over 100,000 more than Mr Karpeles claimed was stolen from his exchange when he filed for bankruptcy protection in Japan on 28 February.

Many have called on MtGox to release more information about what has happened to the lost bitcoins as there has been no activity in the blockchain (the central list of buying and selling that underpins the entire Bitcoin network) suggesting they have been traded.

MtGox Wins Temporary Bankruptcy Protection in the US

Following the recent collapse of the MtGox bitcoin exchange and its subsequent filing for bankruptcy, a US judge has given the firm temporary bankruptcy protection. What this means is that the firm’s assets are protected and two US lawsuits have been halted while bankruptcy proceedings take place in Japan.

MtGox is expected to return to court at the beginning of April to extend this protection. The filing asks the US bankruptcy court to recognize Mt Gox’s bankruptcy in Japan and protect its US assets. The protection gives MtGox a temporary reprieve against two US lawsuits: one a class-action suit in Chicago filed by an Illinois resident, and another a $75m breach-of-contract case filed in Seattle by Coinlab Inc.

New York Regulator Plans ‘Regulated’ Bitcoin Exchanges

One of the aspects of bitcoin that is appealing is the fact that it is unregulated and is outside of the jurisdiction of any governments or authorities. Of course, at the same time, this is one of the worst aspects of bitcoin, and its lack of regulation means that if an exchange such as MTGox goes bankrupt, there is no authority that people can go to for help.

Of course, in the long run and in order to survive, bitcoin will need to be regulated to some extent. In response to this requirement, New York’s financial regulator has called on firms to submit proposals to set up “regulated” exchanges for bitcoin and other digital currencies.

The result should be better consumer protection as well as the prevention of money laundering, which is a stigma that has bugged bitcoin since its inception.

Benjamin Lawsky, New York’s superintendent of financial services, had this to say:

“The fact is that virtual currencies are unlikely to disappear entirely. The recent problems at MtGox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges”

“As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators.”

This, I think, is what bitcoin needs if it is ever to become a truly mainstream currency in which people have confidence. This is progress.

Xero Online Accounting Software Review

Xero Accounting Software LogoXero (www.xero.com) is online accounting software for small businesses and, according to the product website, is the World’s easiest accounting software. The software lets you see your cashflow in real time, lets you automatically import bank transactions, create and send invoices, and use a large selection of add-ons.

 

Features

Dashboard
Xero’s dashboard gives you an at-a-glance overview of your bank balances, bills, invoices, and expense claims, enabling you to see the big picture of your business at any time. Interactive graphs show revenue coming into your business and money going out, and a ‘watch list’ lets you keep an eye on specific accounts.

Mobile – Xero Touch
Xero Touch enables you to use the Xero accounting software from any mobile device. You can keep track of bank transactions, check bank balances, create invoices, enter expenses, and communicate with your accountant,

Inventory Items
If you have services and products that you buy or sell on a regular basis, you can set these up as inventory items. You can then use these items in repeating invoices or bills by referencing the associated inventory code. You can either add inventory items individually, or you can import a batch of items from a .csv file.

Purchase Orders
Purchase orders enable you to keep track of purchases you make from your suppliers. This lets both you and your supplier know what has been ordered, its cost, when it should be delivered, and the delivery address.

Expense Claims
Xero can easily handle expense claims when you have used your own money to buy items for your business. You simply enter the details of the expense and then scan or take of a photo of the receipt and add it to the expense record.

Free Online Support
Free, around the clock, online support is available from experts in the Xero product.

Multi-Currency Financial Accounting
Xero provides real-time conversions with exchange rates for over 160 currencies. You can also add foreign currency bank accounts and create foreign currency invoices. The software keeps track of foreign currency gains and losses to enable you to have an accurate picture of your company’s finances.

Payroll
With Xero, you can easily enter a pay run, make bulk payments and email or print payslips for your employees. Detailed reports give you an overview of all your salary expenses. You can combine the pay run functionality with the HMRC’s RTI compliance tools to create a fully-compliant solution for up to 9 employees. With online payroll you are always using the latest tax tables.

Supporting Files
To compliment Xero as being a cloud accounting solution, you are able to store supporting files in the cloud as well, rather than needing to keep them on your computer’s hard drive. This enables you to keep source documents right next to the financial data, making it easier for you and your accountant to keep track of the numbers.

Financial Reporting
Xero has an extensive selection of financial reports, ranging from a simple profit and loss report to advanced management reporting. All reports can be exported in as PDF, Microsoft Excel or Goggle Docs. Xero’s reporting functionality is very good, giving it an edge over its competitors.

Bill Payment
Managing bills helps you to keep on top of cashflow and ensure that your suppliers are paid on time. From the Purchase area of the software, you have a complete overview of your bills and purchase orders.

Fixed Asset Depreciation
The software also lets you keep track of fixed asset depreciation.

Pricing

Xero offers three pricing models:

  • Starter – £9+VAT per month
  • Standard – £20+VAT per month
  • Premium – £25+VAT per month

According to the Xero website, the Standard accounting package is the most popular. Due to the limitations in the number of bank transactions that can be reconciled (20), and the number of invoices and bills that can be generated (5 each), I would imagine that the Starter package is only suitable for micro businesses that only have one or two clients, for example, IT contractors.

For companies that carry out international trade where multi-currency capability is necessary, the Premium package will be necessary, but for most small businesses, the Standard package will be sufficient.

Free Trial

As with most online accounting software solutions, Xero offers a free trial of its software. Registration takes a few seconds and, once you’ve responded to the activation email sent to you, you can begin using the application.

 

Initially, you are prompted to set up your business, but there is a help video and links to assist you with this task. This can be quite a time-consuming exercise if you want to set everything up properly, but you can skip through the screens if you want to, and also save and quit at any time. You may also require the assistance of your accountant in order to complete some of the screens.

Once you’ve gone through the setup process, you can start to use the software properly, and create invoices, run reports, and so on.

Conclusion

Xero is a powerful accounting solution with great reporting functionality, and will be a good choice for many small businesses. As is often the case through, it’ll be down to personal preference as to whether Xero is the right choice for you.

Other Accounting Software Reviews

You might also be interested in reading the following review(s):

Clear Books

KashFlow

FreeAgent

All Accounting / Bookkeeping Software Reviews

How Does Bitcoin Work?

Here’s a very quick explanation of how bitcoin works.

Bitcoin is a virtual currency that is not backed by any authority. The currency was invented by someone called Satoshi Nakamoto who, in 2008, published a paper explaining how the financial transactions could be processed without going through a financial institution.

Bitcoins are created using a complicated mathematical process called mining. This provides one method of obtaining bitcoins. An alternative way is to buy them using a bitcoin exchange. To do this you will need a bitcoin wallet. Bitcoin wallets can be online (web-based), they can be downloaded and installed on a computer, or they can exist in the form of a dedicated ‘hardware’ wallet.

When bitcoin transactions are processed, a long string of letters and numbers is used to identify the buyer of the bitcoins, and another for the seller. There is not identification in the form of a real name associated with the transactions. In other words, money is effectively transferred anonymously, which has led to the process being used for such illegal activities as money laundering.

There are currently two main problems with the currency: one is its volatility, and two is that because the currency is unregulated, if your bitcoins get stolen, for example, there is no authority you can go to for help.

Supporters of the currency see it as an effective way to transfer money, whilst skeptics say that it is too volatile and that governments and other other authorities will eventually clamp down on its use and make it obsolete.

You can read a more detailed introduction to the bitcoin currency here: http://www.mybookkeepingmanager.com/user-guides/getting-started-with-bitcoin.html

Testing Times For Bitcoin

The past few weeks have been a bit on the testing side for the bitcoin crypto-currency. What with the collapse of the MtGox bitcoin exchange following the theft of 744,000 bitcoins – about $350m (£210m) worth – due to a loophole in its security, the news that Japan’s government has said that Bitcoin is not a currency, the closure of Canada-based virtual currency exchange Flexcoin following the theft of bitcoins worth around 440,000 euros, and the very sad death of Autumn Radtke – the CEO of the First Meta bitcoin exchange in Singapore, it’s hard at the moment to imagine a successful future for the currency.

The current value of bitcoin is running at about half of its November value, so things are not looking too positive on that front. In order for the currency to survive, people need to have confidence in it – not just that its value isn’t going to fall through the floor, but also that any bitcoins you have in your bitcoin wallet aren’t going to be stolen. This is really, really important. I, for example, own 0.2 of a bitcoin – about £75 worth at the moment – and I would like to buy some more but I’m waiting to see how things stabilize over the next few weeks or months. If I’m typical of the average micro investor, this lack of activity isn’t going to do much for the price of bitcoin.

I like the idea of bitcoin because for me it offers ‘potentially’ an additional way to buy and sell goods on the Internet, which will be good for competition, and which in turn will be good for keeping transaction charges down to a minimum. I say ‘potentially’ because as of March 2014 I don’t think there are really that many places where you can actually use bitcoin to buy items. I also like the idea of bitcoin – I think it’s clever how the whole bitcoin network/system works and that should be applauded – even if only from a technological point of view.

And, of course, there’s the business of whether governments around the world allow bitcoin transactions to take place in their jurisdiction. Governments don’t like bitcoin because of the anonymity of the transactions…after all, it’s all well and good saying that you should pay tax on any profits you make from bitcoin investments, but if no-one knows about the profits are you going to declare them? … of course you are !! Still, I’m about 25% down at the moment on my investment so capital gains taxes are not really something I have to worry about just yet !

Ultimately – unfortunately – there might end up being just too many reasons why bitcoin can’t survive. I hope this doesn’t turn out to be the case, but I’m concerned at the moment that it might be.

If you want to know more about bitcoin, take a look at our beginner’s guide.

Freelancers – why your flexibility should stop at your finances

It is certainly true that freelancing offers a degree of flexibility when it comes to working hours. Instead of resisting the temptation to snooze the alarm clock at 7am every day in order to beat the morning rush, many freelancers will often start their day at a time that suits them and more importantly, from a location that suits them.

This often makes things such as running the family home, doing the school run, commuting, and taking time off for holidays a lot simpler than when you are an employee of someone else’s company. At the end of the day, the freelancer can often take his or her work with them wherever they decide to go. A flexible work-life balance is one of the major advantages when working for yourself as a self-employed freelancer.

Setting up a freelance business

While this flexibility is a godsend to many, it should by no means spill over into your finances. It is of the utmost importance to get your accounts in order prior to setting up a business, and to keep on top of them during the day-to-day running of your business. To do this, you must begin by creating a business name and setting up a business bank account. You must then inform the Inland Revenue (HMRC) that you’re a sole trader.

Managing your taxes

Unlike full-time employment, when working on a freelance basis you will have to manage your own accounts. This often means that you have to sort out for yourself how much tax and national insurance you owe, and when they need to be paid. This can be time consuming and you must ensure you have the necessary funds in place when it comes to the end of the tax year so that you can meet your financial obligations.

Managing unforeseen costs

Quite possibly the biggest problem with freelance work is that one week the money might be rolling in and the next week work it may have completely dried up. This can make organising your monthly finances somewhat difficult, especially if you have an unexpectedly high bill to pay, unforeseen house repairs to cover or a daughter’s wedding to contribute towards.

Getting your processes right

Being efficient is often the key to running a profitable business. This means ensuring that your time is well spent. It’s wise to begin by putting your processes in order, which often entails sorting out your accounts, your invoices and your bills. Using bookkeeping software will help you to do this, or you can hire the services of an accountant.

Be ruthless

In order to make money you must be ruthless, especially when working on a freelance basis. This often involves chasing up invoices on the day they are due, being disciplined with yourself and ensuring you claim for the likes of travel, software and business costs – either through tax deductions or from clients.

Bitcoin – What’s All the Fuss About?

I guess that the increase in price of bitcoins during 2013 has generated a lot of interest in this crypto-currency, with lots of people wanting to get in on the action. Knowing whether Bitcoin is something you should get involved in, and how, is the tricky thing to get right.

You might decide, as I did, to buy some bitcoins in the hope that they will increase in value. Unfortunately for me, I’m currently about 30% down on my investment of £100 (I’ve just checked their value while I’m writing this post and their current value is just under £70).

So, I’m currently sitting here feeling a bit disappointed that my investment has gone down so much, but at the same time feeling happy that I didn’t invest more – I almost bought another £50 worth a week or so ago. But, as I’ve come to understand, this is the world of Bitcoin – it’s very volatile, with daily fluctuations in the value of the currency being a lot more dramatic than we would expect from a ‘normal’ currency.

Or perhaps I could try Bitcoin mining. It certainly sounds interesting, but what is it. Here’s a sort of explanation: bitcoins are created when mathematical problems are solved by various computers dotted around the world – either working together as a ‘pool’ or individually. When a problem is solved, a block of bitcoins (I think there are 25 in a block) is created and distributed between the computers that solved the problem. When bitcoin was first invented in 2008/9, the problems were relatively (compared to today) easy to solve and a normal desktop PC was all you needed.

However, every time a block of bitcoins is mined, the subsequent mathematical problem is slightly more difficult to solve than the previous one. So, gradually, what has happened over the past few years is that in order to mine bitcoins you need to use a more and more powerful computer. Now, in 2014, you can only sensibly mine bitcoins by using specialized computers that have been specifically designed to mine bitcoins and nothing else.

OK, so I’ll buy one. Well, at least that’s what I thought until I started looking into the price of them. If you want something that’s going to earn you some serious crypto-currency, you’re talking about forking out a few grand. You can pay a lot less than that of course, but it’ll take you a year to earn a few quid.

This got me thinking, so who’s making money out of bitcoin mining? the people selling the bitcoin mining computers (or rigs as they’re referred to) of course. And, another thing to bear in mind if you’re thinking about buying a rig is, if the bottom falls out of the bitcoin market, all of these very expensive rigs will become completely redundant as they have no other use apart from bitcoin mining (I guess you could possibly use them to mine other crypto-currencies, but you wouldn’t be able to run your favourite bookkeeping spreadsheet application on them). My guess is that the providers of bitcoin mining rigs are desperately trying to sell as many units as possible, just in case the whole bitcoin thing disappears down the toilet. I’ve no doubt that bitcoin mining is making some people very rich….but perhaps not the miners themselves !!

So, what do you do? do you invest some money in bitcoin in some way or not? Personally, I think I’ll just keep an eye on the value of my initial investment … let me just have another quick look to see what they’re worth since I last checked about fifteen minutes ago … just give me a couple of seconds … they’ve gone down by another 30 pence … what joy. Still, it gives me something else to check numerous times every day !!

If you want to know more about bitcoin, why not have a quick read through my Beginner’s Guide to Bitcoin, which you can find here.

FreeAgent Online Accounting Software Review

FreeAgent LogoFreeAgent (www.freeagent.com) is an online accounting solution for limited companies, partnerships, or sole traders, which is used by over 35,000 freelancers and small businesses. The software lets you keep on top of expenses, payroll, time tracking, estimates and invoices. You can also keep track of your businesses cashflow and project profitability, and check to see who owes you money. You can also see what your current tax situation is, and file VAT, RTI (Real Time Information) and Self Assessment returns directly to HMRC.

 

Features

Estimates (Quotes, Proposals)
The software lets you create estimates for potential work. The estimates can be combined to form a single invoice if necessary, they can be printed or emailed directly to clients. Multiple currencies and languages are supported.

Time Tracking
FreeAgent enables you to log timeslips for work done on active projects, and to switch between weeks and months so that you can see where your time is going. On project completion, you can generate an invoice for unbilled time and send this to the client. The software also lets you generate timesheets that can be printed or emailed to clients.

Invoices
Create professional invoices and emailed them to clients. You can also create recurring invoices. The software enables you to keep track of outstanding invoices and to send late payment reminders where necessary.

Part of the FreeAgent Add New Invoice page

Part of the FreeAgent Add New Invoice page

Expenses
The overview screen lets you view a list of your recent expenses, and to add a new one instantly. Where you have expenses that are repeated on a monthly basis, for example, you can set these up to automatically recur.

Banking
You can automatically import bank transactions or complete bank statements into the software, and reconcile invoices and bills with transactions made in FreeAgent. You can even import transaction data from PayPal.

Accounting
FreeAgent gives you access to monthly and quarterly accounting reports, providing you with a clear picture of your profit and loss at any time and helping you to track revenue and spending. To help you work more effectively with your accountant, you can give them access to your FreeAgent account. This will allow your accountant to provide you with advice throughout the financial year and not just at year end when they are producing your company accounts. The software is also able to produce a complete balance sheet for your business. For limited companies, FreeAgent keeps track of company profit from both the current year and previous years, ensuring that any dividends you take are legal.

Taxes
FreeAgent can work out your tax situation from both a personal and business perspective. The tax timeline tells you how much tax you have to pay and when you have to pay it. You can export the dates from the timeline to calendar software such as Google Calendar. The software can also work out all the figures for your quarterly VAT Returns, and is able to handle both invoice accounting and cash accounting, as well as the VAT Flat Rate Scheme. If you are a limited company, FreeAgent can also calculate how much corporation tax your business owes.

Secure, Web-Based Accounting
FreeAgent is a cloud (web-based) accounting solution that uses secure 256-bit SSL technology to encrypt all transactions between you and the FreeAgent servers. You can access your account from any web-enabled device that supports a web browser, for example, a PC, laptop, tablet, or mobile phone.

 

Free Trial

A 30 day free trial of the software is available. Although the initial setup is straightforward (I selected the limited company option), it does prompt you to enter a lot of details that you probably don’t want to at this early stage (bank account details, VAT registration number, etc). After all, you’re just trying out the software. Of course, you can just enter dummy data to get yourself up and running – which is what I did. You can update these settings later if you want to using the Settings menu bar option.

As with all software applications, it takes a bit of time to find your way around the software, but I have to say that the navigation in FreeAgent is easy to follow. It also has a Quick Links drop down list at the right of the screen that contains the most common tasks, such as, creating an invoice and adding a new expense.

Pricing

Three pricing models are available:

  • Sole Trader (£15+VAT per month)
  • Partnerships/LLP (£20+VAT per month)
  • Limited Company (£25+VAT per month)

If you pay for 12 months up front though, you can get two months for free, meaning that for the limited company option the price would work out at just under £21+VAT per month. Although slightly more expensive, this is similar to KashFlow and Clear Books.

Conclusion

I particularly like the fact that you can choose the accounting software that suits your particular company structure, for example, if you’re an IT contractor working through your own limited company, you choose the limited company solution, whereas if you’re a sole trader, you choose the sole trader solution. This makes everything tidier, when it comes to the functionality that is provided. You can also choose an account based on US company structures … nice!

FreeAgent is aimed at very small businesses that have just a few people. It offers plenty of functionality – probably as much as most one- or two-person enterprises would require. It doesn’t seem to handle stock control though, so it assumes that your business is a service-based one.

Other Accounting Software Reviews

You might also be interested in reading the following review(s):

Clear Books

KashFlow

Xero

All Accounting / Bookkeeping Software Reviews

Bitcoin – a threat to PayPal’s global dominance?

PayPalFor a long time now, PayPal has been the dominant international online payment system, with very few alternatives (Wirecard and Skrill – formerly Moneybookers – are the only two I can think of) if you want to send or receive money internationally for e-commerce transactions.

PayPal performs payment processing for millions of online businesses, auction sites and other commercial users and in the space of about 15 years has grown to its current situation whereby it processes somewhere between US$150billion and US$200billion worth of transactions annually. So, there’s no doubting PayPal’s credentials, but is its spot at the top of the heap about to be challenged?

BitcoinWell, there’s a new kid on the block – Bitcoin. By now, most of us have heard of it, but have we thought much about the impact it might have on the online payment business?

A couple of days ago I was browsing through some accounting and bookkeeping websites (I know, I should get a life) when I came across www.quickfile.co.uk and noticed that they had just published a blog post stating that they were the first UK accounting platform to enable businesses to accept payment in the Bitcoin currency. This caught my attention.

 

I think possibly the main difference between Bitcoin and other competitors to PayPal is that Bitcoin already seems to quite well known – how many of you have heard of Wirecard or Skrill? – probably not many even though both are big, successful brands. For example, in August 2013, Skrill was bought by another company for €600m, and Wirecard ranks among the 30 largest German technology companies.

So, what is Bitcoin?

Bitcoin is a payment system that can be used for the payment of products or services, and which has seen considerable growth since its introduction in 2009. Whether it goes on to achieve the dizzy heights of a system like PayPal depends largely on whether online merchants embrace it as a method of payment for their products or services, and whether buyers of those products or services choose to use Bitcoin. (Strictly speaking, Bitcoin is the payment system/network, and bitcoins are the currency itself.)

One of the attractions of Bitcoin is that transaction fees are typically very low – typically 1% – making it very competitive when compared with other online payment methods. One of the disadvantages is that the digital currency is a lot more volatile than a hard currency such as the US dollar or £ Sterling. This volatility has been largely fueled by currency speculators though, which may well change as the currency gains more widespread commercial use.

The Blockchain

When a transaction is made in the Bitcoin network it gets assigned to a distributed public database – the Blockchain (take a look at this website – it’s really interesting) – so there are no banks to levy charges. The Blockchain contains a sequential record of all Bitcoin transactions.

 

The Blockchain is maintained by minors, who are rewarded with newly created bitcoins as well as transaction fees. Payment processing work done by miners verifies each transaction as valid and adds it to the Blockchain (this all a bit confusing I know, but hopefully the videos on this page will help to clarify the situation somewhat).

Bitcoin Payment Service Providers

So, if you want to buy or sell something with bitcoins, how do you do it? Well, if you want to buy something with bitcoins you need to use a Bitcoin wallet, which allows a user to carry out a bitcoin transaction. If you want to sell something, you need to use a payment service provider such as BitPay. BitPay offers a complete checkout solution for including automatic conversion to local currencies and integration with a host of shopping cart software.

So, are Bitcoin and BitPay about to upset the PayPal apple cart? … well, it’s very early days. As of January 2014, BitPay has around 20,000 businesses and charities using its services, whereas PayPal has about 100 million active accounts (this includes people who use PayPal to buy products and services as well as those selling them).

BitPay LogoAs a merchant, it’s very easy to integrate PayPal into your website; BitPay needs to be just as easy to use if online merchants are going to use it in sufficient numbers. And, of course, there needs to be enough people with Bitcoin wallets willing to buy products and services with bitcoins. People also need to feel secure when they are buying or selling using bitcoins, and people need to understand how the whole Bitcoin thing works … which is a bit confusing at the moment.

So, yes, there’s a long way to go before Bitcoin and BitPay become a real threat to PayPal’s market dominance, but it will be an interesting story to follow.

Glossary

bitcoins – digital currency.
Bitcoin – payment system/network that handles transactions in bitcoins.
Bitcoin wallet – lets you send and receive money using bitcoins as the currency. You can get one of these from the Blockchain website.
BitPay – payment service provider that lets you sell items (as an online merchant) using bitcoins as the currency.

References

Wikipedia – Article about Bitcoin
BitPay – Bitcoin payment service provider
Blockchain – Bitcoin block explorer
Wirecard – Online payment service provider
Skrill – Online payment service provider
PayPal – International e-commerce business
QuickFile – Free online (web-based / cloud) accounting service that claims to be the first accounting services company in the UK to accept payments using bitcoins

Want to know more about Bitcoin? – then read our Getting Started / Beginner’s Guide to Bitcoin.

Author: this article was written by technology writer Stephen Fletcher

 

Update: 03 Feb 2014 – Here’s a blog post that helps to explain bitcoin mining : http://startbitcoin.com/

And another site: http://www.bitcoinmining.com/