Beyond Excel: Why Accounting Software Is a Must for Growing Businesses

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Why accounting software is useful?

1. It automates redundant tasks

Data entry is time-consuming. With any popular accounting system, automated payment plans allow you to only enter a customer’s information once. A customer’s payment habits and purchasing history are tracked for reference. When collecting payments is due, you’ll then receive payments without putting in extra work from your end. It also gives you vendor history and aging with reports for each member which makes locating and retrieving invoices and payments faster. The entirety of each transaction history is also saved in the system without you having to manually input the data one by one. Not only does this saves you time, but this also eliminates potential errors from transcribing data manually. Many banks also allow a direct download of your bank account so you can easily input a whole month’s worth of transactions.

2. It helps with taxes

Using a good accounting system in place only requires you to record the amount of money you spend and receive in an organized way. This allows you to stay on top of your accounts when compiling and exporting documents and receipts to your accountant with ease. Properly compiled records also make your accountant’s job easier in taking care of your taxes. Some software also complies with tax office rules through formatting invoices automatically so you won’t face headaches during tax season. It also enables audit-proof books which makes the auditing process shorter as IRS auditors may only check and do a cursory review to see if the bank statements align with the software’s records.

3. It provides digital invoices

In a technology-driven world, paperwork is outdated. Many processes nowadays are empowered by technology. It’s even predicted that by 2022, 70% of software interactions of enterprises will happen in mobile devices which stresses the importance of getting ahead against your competitors. Sending a digital invoice to your customers via email is convenient both for you and your customer. Customers can send their payments with only a few clicks which make collecting them faster and easier. Many accounting platforms nowadays integrate with various payment channels that allow credit and debit cards, bank transfers, and e-wallets.

4. It oversees cash flow

Managing a business entails a net amount of cash and cash equivalents that flow in and out of your financials. Overseeing all transactions to pay and get paid for may mean having to designate your productive hours in flicking through contact lists, files, and Excel sheets without an accounting program to streamline the task. The software helps you stay on top and keep track of incoming cash, invoices, and overdue payments, among others to ensure you won’t miss a crucial financial transaction. An accounts payable system tracks bills as they arrive so you can plan and forecast future cash flows instead of just cutting checks when bills are due. Having formalized financial statements, such as balance sheets and profit and loss statements, is also necessary for evaluating the progress of your business.

5. It takes care of the math for you

Even if you’re excellent at math, accuracy is a crucial aspect of accounting processes. Despite having an access to all financial records in your organization, there’s still a potential for errors, edits, and lapses in calculations that can cost you time and money to correct. This is even more important as your business grows and you’ll soon have to handle more workers, taxes, bills, and payments with crucial deadlines. It also simplifies bank reconciliation so you don’t miss deductions. A good example of an accounting solution that handles these processes well is Fresh-books. It tracks expenses easily, automates payments for getting paid faster, and creates professional-looking invoices.

6. It cuts costs

Automating your accounting tasks saves you money in the long run. It eliminates the need for hiring a bookkeeper or allotting extra hours of their shift to handle all books, invoices, and transactions. In business, time is equivalent to money and optimizing this process greatly reduces bookkeeping hours. Furthermore, the software has subscription-based pricing models with low costs to pay on a monthly or annual basis. Subscribing to a plan gives you regular updates, support, and tools which enables you to focus on actually running your business.

7. It enables wide accessibility

If your accounting system lives in the cloud, you can access it anywhere you are at any time when you need to. Matters regarding finances are hard to put off, hence, immediately solving any issue is critical. A cloud-based accounting solution doesn’t limit your access to your office or desktop. You can use native apps for mobile devices even when you’re on-the-go. In fact, 83% of users are more satisfied when their vendor offers a solution for mobile devices.

Factors to Consider in Choosing an Accounting Software

Accounting solutions are useful and crucial for your business. That’s why it’s important to be careful in choosing which one to implement with the wide array of options available nowadays. There is no ‘one size fits all’ solution for your own business, but getting to know your needs through business evaluation and being aware of vital factors to consider for the software is essential. You should also consider how much accounting software costs. Here are some examples of things to keep in mind when choosing a solution:

1. Features. From your evaluation, preferably with the help of an accountant, check whether the product’s features match with your needs because software solutions are not created equal.
2. Overall value. The cheapest option isn’t always the best. Take into account the software’s overall value based on its set of features and functionalities.
3. Scalability. Growth is one of any business’ goals; hence, factor in scaling to ensure the software will grow with you as your needs become more demanding.
4. Learning curve. Take into consideration how long it will take to learn the software. Choosing one that’s user-friendly is essential to immediately implement the system.
5. Integrations. Maximizing what you can do in the software is achieved with a robust marketplace of integrations that will enhance the system’s functionality and core capabilities.