Gone are the days when accountants used to spend a month at the end of the year going through the piles of ledgers. Today even the smallest organization owns some form of accounting software to simplify and organize their bookkeeping.
However, if you still rely on the traditional bookkeeping practices, you know better how challenging it is to keep up with the high volume accounting and finance records.
It is quite overwhelming for you to manually process every monetary transaction at the end of each month from the financial data resting in various accounting systems.
Worse yet, inaccurate accounting data can cause a rippling impact in your business operation, from inventory to sales. It simply means that you are wasting your time and even putting your enterprise in jeopardy.
Accounting software is a remedy to all these woes associated with finance management.
Accounting software handles accounting and bookkeeping, including storing your enterprise’s financial data and business transactions. It’s an efficient solution that eliminates manual data entry, such as keying in data on the quote, processing the work order, and then performing the invoice. This way, it helps you with paying bills on time, invoicing customers, and managing your books. It also keeps you in compliance and avoids tax penalties.
And the good thing is that you don’t need to be an accountant or a math freak to operate today’s accounting system. Thanks to their user-friendly interactive.
Here are some convincing reasons to invest in accounting software for your business.
Automating Redundant Tasks:
Let’s accept it. Data entry eats up a lot of valuable time and causes hassles as well.
With an accounting tool, the automated system enables you only to enter a customer’s info once. Then, it tracks a customer’s payment habits and purchasing history. When payments are due, you’ll then get payments without going through hassles from your end. It also provides you with vendor history and ageing with reports for each personnel, making it easy to locate and retrieve invoices and payments faster.
The system also saves each transaction history without requiring you to feed the data one by one manually. Not only does this save valuable time, but this also removes the risk of errors that occurred from feeding information manually.
Simplifying Tax Filling:
Filing your taxes can be stressful and complicated, requiring you to keep close track of all transactions. In fact, tax-related responsibilities can eat up to over 400 hours. That time could have been used to improve business efficiency, finding new clients or pondering over new ideas.
The accounting tool simplifies this process by keeping all your financial details on the same page. Many accounting programs let you store receipts, invoices, and income statements. They can also calculate the tax amounts required to be paid on each invoice. Plus, you can get reports on the amount of tax you have to pay for a particular period. Whenever tax time comes, your transactions—such as earnings and expenditures—will be organized and sorted out, making the process quick and accurate for you.
Therefore, you can get all the information you need to prepare and file a tax set by the government. Some advanced systems also let you e-file tax returns from within the project.
Providing Detailed Reports:
Accounting systems also provide detailed reports on your finances and help you view the money flow across your business. This way, you get a clear picture of your expense and revenue at any time.
This can help you know your profits more easily and learn which client brings more revenue to your business. Financial reports also show how the company is collecting money and at which rates creditors are paid. Plus, they help you determine abnormalities that might impact the cash flow of your company.
Efficient accounting programs offer detailed, actionable reports. These reports help you make informed decisions and help you run your enterprise more smartly.
Keeping an accurate record of your finances is essential to assessing the progress of your company. However, manual accounting makes your calculation prone to errors.
With accounting software, you can get more accurate results as it automatically performs all calculations accurately. For example, the program automatically performs calculations as you key-in data, transfer funds and manage assets. You can also generate analyses while minimizes the chances of oversights, and if you want to look at the record for errors, you can quickly locate and rectify it before approving the reports.
Ensuring Better Security:
Records stored in cabinets or boxes are prone to theft, damages from fire and flooding. When you save your data online along with regular backups, this risk is simply eliminated. Luckily, many online accounting tools take care of this concern.
However, make sure to choose an online accounting tool that is operated over 128-bit SSL encryption. This security keeps hackers and other threat actors away from your data.
It is also noteworthy that many accounting tools are password-protected. This capability enables you to protect confidential data from being accessed by unauthorized persons. Besides, by storing your data this way, you are supporting its access, file search and restoration, not to mention protecting it from natural disasters.
A crucial part of financial management, record keeping can be complicated and demanding. To minimize the “labor and time” you require doing it, many accounting tools offer certain features that compile the data you input in multiple programs. Besides unifying them in one operating platform, it can also assess business practices and locate trends in the “incoming and outgoing” of money across your organization. Afterwards, it generates the final report to show you how you make more revenue and where you should invest more.
Being Easy to Use:
If you are like most small business owners, you don’t want to invest your valuable time learning complicated accounting software. The good news is that not all accounting tools are challenging to learn. There is a short learning curve with the most reputed accounting software.
For example, some accounting tools come with essential features, and they don’t have complicated controls. Within a few clicks, users can keep track of their finances. In fact, some accounting tools are designed for non-accounting people.
Besides, many accounting software provides customer support and training to get you educated on the effective use of their tools.
Simplifying Inventory Tracking:
As your business grows, you need to keep track of your inventories.
Inventory management is essential for your business.
However, it is not possible to manually check each and everything in your stock unless you have a sort of automated system for that. A real-time system lets you store and update your inventory data. Luckily, many accounting programs come with built-in inventory management features that let record each product on the shelves and automatically update the line up every time you make a sale. You can integrate inventory features with your point-of-sale system.
Delivering Scalable Solutions:
It is essential to choose an accounting service that can scale as your operation goes up. The good thing is that today’s accounting software can grow with your business. Thanks to their scalable databases and sophisticated customization. Startups and small business can use their solutions to meet their evolving requirements and demands. Organizations that are looking to have a presence in other nations, deploying remote employees, and have clients in multiple locations can utilize cloud-based accounting solutions that can be accessed anytime and on the go using any internet-enabled device. This way, accounting software can meet your diverse financial management needs.
Centralizing All Functions:
Today’s accounting tools are equipped with all-in-one features. For example, you can find various critical elements like payroll, invoicing, bookkeeping, and inventory management in a single tool, eliminating the need to purchase different software. One accounting tool can be used instead of buying separate software for each thing.
A full-featured accounting program can help you save time and money as well as streamline your business processes. It also helps you know your bottom line. You can see where you are in real-time so that you have the option to rectify the things immediately when something is going off track.
Simplifying the Auditing:
While business audits can feel stressful from a data-gathering standpoint, they are an essential part of business operations. However, it can’t be sidelined that audit helps you know the financial status of your business. An accounting tool can help you create a solid foundation in between audits. It helps your accountant view audit trails. For example, they can view what changes were made to the books, by whom and when.
- Accounting software not only streamlines and automates routine tasks and financial closes; it also eliminates the risk of manual errors.
- It lets them assess all data within the system for specific periods.
- It lets the auditor click on any figure in the financial statement and explore the general and sub-ledgers, reports and transactions.
- It enables the auditor to generate built-in reports and reconciliations to confirm your accounting process is efficient. This assures them that all transactions are accurate and complete.
- It also lets you attach supporting documents for each transaction, allowing the auditor to view them.
- It tests the accuracy of numbers occurring into your general ledgers from outside, such as payroll expenses and stock option accounting.
How to Choose the Right Accounting Software for Your Business
So you must have understood the benefits of accounting software for your business. They can help you manage, view and control the flow of money across your organizations. Plus, they are instrumental when it comes to taxation and auditing.
That said, be careful while choosing an accounting tool for your business. Simply put, you should know how to choose the right accounting software for your business.
This is because not all accounting tools are the same. Some are too simple to meet your advance needs. Some are too advanced that you might feel certain features unnecessary. This is also especially important if you are opting for a paid tool. Choosing the right software might be tricky. Each program comes with various sets of features, and most offer different pricing plans, which also vary based on features, number of users and other functions.
Here are some things to keep in mind while choosing the accounting software for your business.
- Need to consider your Business Requirements?
- Consider Your Budget?
- Are you looking for free, simple accounting software or an application that costs more but comes with extra features?
- Is it simple to use if you are a non-accounting person?
- How many users will access this tool? Do you want a cloud-based system that can be accessed from anywhere? Do you need it to be in a mobile app too?
- Which features you absolutely need from your accounting software?
- Is it scalable?
- What are people saying about it? Does the software have positive feedback?
- What’s your accountant’s take on the software?
- Does it come with customer support?
- Is the software updated frequently?
- Multi-Currency Transactions support?
- Client Support Option
Apart from this the accounting software have some features that one Should be aware of.
Reporting and Analysis
Reporting is important if your accountant is looking to communicate your financial results with you or the board of directors. Therefore, make sure the software can calculate and show the relevant metrics. Besides, the tool should be able to fetch data from various sources to ensure reports are the reflection of the existing state of your business.
Visual Representation of Numbers
While accounting is all about numbers, charts, graphs and other forms of visual representation effectively communicate financial data and are easily understood by both financial people and layman. Finance graphs and charts make it easy to digest vital financial metrics and insights. After all, a human is likely to process visual data better.
Payroll modules are incredibly advanced in some accounting tools, delivering full payroll services that perform everything from calculating work hours and processing wages to paying payroll taxes and making essential deductions.
A system should accurately calculate the wages of your employees. However, it is challenging when it comes to paying a mix of intermittent workers and part-time staff.
Billing and Invoicing:
Billing and invoicing module automates mundane tasks like check writing and informing customers about due payments, eliminate manual data Keying, and ensure that your accounting figures are accurate.
You can also link your accounting software to your bank account, letting you make direct payments and importing real-time data from the bank into the accounting system.
Tax management involves excessive documentation and a lot of paperwork, especially for small businesses. They need to submit their taxes on time to avoid penalties.
An accounting software with stock and inventory management controls can really streamline your business, it really benefits you to identify what you have in stock.