Are you a small business owner?
If so, chances are you are always looking for ways to make your business more efficient and manage your money better. Technology could be the answer to both of these major business needs.
You already use a smartphone, social media and a computer. It’s time to take your use of technology to the next level and incorporate it into your accounting and finances.
Accounting technology can free up your time, help manage your cash flow and even help you scale from small business to a big player. Finding the best accounting software is absolutely essential for you to run a better business. Want to know why?
Keep reading. You’re about to find out why computerized accounting systems are crucial for your small business.
What Is Computerized Accounting
First, what is computerized accounting?
This type of software tracks your accounting transactions and produces financial output. The types of reporting it should feature include annual financial statements, monthly reports and tax return info.
The goal of the system is to analyze the profitability and efficiency of your business. Hopefully, this information allows you to improve your operations and grow. These are the reasons you need to install a system today.
1. Increased Speed
Most small business owners have enough on their plate. They need to be focused on growing their company and fulfilling their passion for their work.
Still, the nuts and bolts of growing that business involve tasks like accounting, taxes and payroll. While necessary, the accounting process should not be yet another time-consuming task.
What if you could spend more time on what you love and less time on crunching numbers? Using technology, it’s entirely possible. Computerized accounting takes the normally tedious task of planning your accounting and makes it faster.
If you need a report generated, it can happen in a few clicks instead of waiting hours or days. Statements can also be produced quickly. You can get a picture of what’s happening in your company in a matter of seconds.
A large part of saving time is the automation of processes that come with computerized accounting. The software can do tasks much faster than a human would.
Computer accounting systems can be a godsend for people who process data visually. They make it easier to share information in a more digestible visual format.
When using the accounting system on a computer, you have plenty of options. There are a number of different ways you can generate your accounts. There’s tables, charts and other ways to visually present it.
3. Better Security
Securing your small business’ valuable data is a huge priority. The use of computerized software can be helpful here.
Cloud-based data is stored remotely and securely. Compared to storing your records in a physical office space, this is a much better option.
You will not need as much storage space in your office for files. Your computer also won’t need extra memory to store all of your records. If your PC crashes, or there’s a natural disaster, your data will still be safe.
If the unexpected happens, cloud-based computerized accounting allows your records to be opened up on a new computer.
4. Computerized Accounting Systems Are Cost-effective
By making your accounting computerized, you save double. You save both on resources and on hiring an accountant. Work will be done faster and more efficiently using software instead of people.
Think about your current business model. Do you and/or your staff currently manage financial information?
You can save money by reducing the man-hours spent on doing this. Simply subscribe to or purchase a computerized accounting service. Simple, routine accounting tasks can be done using technology, freeing up your staff’s time.
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5. Automation of Processes
Manual bookkeeping often involves doing the same tasks over and over again.
One major example is categorizing your expenses. By automating your process, the accounting software can do the work for you. All of the calculations and mundane processes are done by the software.
Complex calculations that would take a human a few hours to complete? Those can be done using a computer program as well.
Another use for the software is processing invoices. This can be done without any need for you or your staff to ever get involved. You won’t need to spend any more time on creating receipts, credit notes or manual invoices.
Cash flow is a major issue for small businesses. It often comes from mismanaged accounting.
You can automate bill paying and expenses, as well as see when cash is leaving your accounts. All of this without having to sort through all your transactions manually. The software allows you get an instant snapshot of your cash flow.
6. Up To Date Info
Accountants themselves are raving about the advantages of real-time data.
Imagine if you could access your financial information whenever you wanted to. Now imagine that data is fresh and updated up to the last hour. It’s all possible using computerized accounting.
Collection of data and information is all well and good. However, smart entrepreneurs can only analyze and use the data if they have the latest information available.
This applies even if you are not an accountant or good with numbers. You can still get a snapshot of company finances due to the accessible nature of computer-generated reports.
For example, say you need a picture of your business’ cash flow over the past three months. Can your current accounting solution give you an up to date report on financial performance mid-quarter?
It could take days or weeks for that information to be generated, usually. That’s time that you can’t afford to waste. To stay updated and make the right decisions, you need a computerized accounting solution.
Download this guide to find out more benefits of bookkeeping in real time.
7. Increased Accuracy
Even the best accountant is prone to make an error. Mistakes are unavoidable.
Or are they?
If you use an automated function, it eliminates the possibility of human error.
Your business benefits from increased accuracy in your records and transactions. No longer will you need to go over your accounts manually. This includes things like entering income and expenses, period end adjustments and taxes.
When an invoice is generated, your software can automatically add it to the accounts receivable balance. No more transactions slipping through the cracks.
If you want accurate, reliable tracking, reconciliation and management, it’s time to switch to accounting software.
If you have an accountant already, they will also benefit. The time they spent on housekeeping tasks can now be devoted to your more complex financial demands.
When you’re ready to grow – as every small business owner eventually will be – you’ll want your software to scale. If you’re going to build a sustainable business, make sure that your accounting system can grow with you.
This means looking to see that the software can handle extra accounts, business units, or inventory units. Depending on your business type, it may also need to have the capability to work with third-party software.
This is especially relevant for retailers, for example. Software should be able to record cash register transactions automatically in that case.
The amount and type of accounting necessary will become more complex as you grow larger. Using computer accounting systems instead of paper records, your data can be stored and managed no matter how big your company.
Another part of growing your business is access. Your employees and potential buyers should be able to access accounting information.
By adhering to generally accepted accounting principles or GAAP, your business is better prepared to merge or issue stock one day.
GAAP are a set of standards and practices that are accepted throughout the accounting industry. These standards mean investors and creditors can look at companies’ records and make decisions about them more easily.
When your company reports financial information, it is expected that they’ll meet these standards.
10. It Leads To More Business
Overall, computerized accounting means faster record keeping, which means more business.
The software helps in a number of ways. The automation of complex calculations, the ability to always be aware of up to the minute financial information are the main ways.
Additionally, your time as a small business owner is freed up. That leads to you focusing on increasing profits and on your actual business operations.
You can now spend time on finding new business, taking care of clients and thinking of new streams of income. All of which leads to more business and a healthier bottom line.
Finding The Best Accounting Software
Now hopefully you know the many benefits of computerized accounting systems. Now it’s time for you to choose the best software for your business.
There are plenty of choices out there. However, not all will deliver exactly what your particular business needs. The ideal way to find out what works best for you is to review a system yourself.
Are you ready to better manage your company’s bookkeeping and finances? We can help. Request a demo from us today!