I have been asked by countless small businesses how they can track their expenses because most are either self-employed or never book an accountant in. Many of these businesses are not even aware there is a difference in the two kinds of accounting software.
As a small business owner, you are growing, expanding or opening up a new store. You need to know how to manage all the various aspects of your business whether that is sales, finance, inventory, ordering and shipping. So why not try accounting software?
Access Accounting Data Any Time, Anywhere
The most obvious advantage that cloud accounting software has over any traditional accounting system is that computerized accounting software lets you access your data whenever you want, and from whichever device you want.
You can use online accounting software from your PC, laptop, tablet, and mobile phone. All you need is a device that’s connected to the internet and a browser (or mobile app).
For businesses of any size, this has a ton of upsides. For example, you can create and send invoices on the go directly from your mobile.
Or you can generate, view, and download financial statements and reports with just a few clicks.
No need to ask your accountant to prepare it three days ahead. Just log on the platform, navigate to your Financial Reports section, and download the financial statement you need.
Save Time With Automation
A big chunk of the work an accountant or bookkeeper has to do on a daily basis is very manual and repetitive. For example:
- Creating an invoice for each sale? Repetitive.
- Tracking transactions and creating respective journal entries? Repetitive.
- Sending late payment reminders to your clients? Repetitive.
You get the point. Most steps of the accounting cycle can be automated. And that’s exactly what online accounting software does best.
For starters, you can automate journal entry creation. All you need to do is integrate your bank directly with your accounting software. This way, everytime you make or receive a payment, a journal entry is automatically created and mapped to the right accounts.
You can also automate things like financial reporting (e.g: create a report every X day of the month). Or you could even set up automated vendor payments.
Keep in mind though, that not all cloud accounting software offer the same degree of accounting automation. If you are looking for accounting software that excels at automation, you should give Deskera a try. With this link, you get a free trial with no credit card required!
Improved Accounting & Bookkeeping Accuracy
With online accounting software, you can say goodbye to most of the typical accounting errors.
Online accounting software will make sure that your accounting records are organized in a proper and accurate manner, every single time.
Remember the times when you’d waste 5 hours trying to find why the balance sheet did not balance?
Well, you can kiss those times goodbye.
When using cloud accounting software, if newly created journal entries don’t balance, the system will notify you immediately and highlight the potential error. This way, you’ll be alerted of the error before even committing to it (i.e: clicking submit).
And this is just a very simple example of how accounting software can help you maintain more accurate accounting and financial data for your business.
Another common accounting error you can avoid by using accounting software is any error related to the freshness of the data. Imagine you are editing a spreadsheet or a table that has already been changed before, but you never received the updated version?
Figuring out how to merge changes from two different files can be really time consuming. But with online accounting software, you won’t ever have to deal with such problems, because all the data is synced in the cloud.
All in all, using online accounting software will ensure that your accounting records are properly and accurately organized. As such, your financial reports will be more accurate, and your team will be able to make decisions faster and prioritize better.
Organization
Besides the speed of processing accounting data, another advantage of small business accounting software is the way it organizes financial information. The data is saved and organized in a certain way, which is easy to find. For example if you want to know if a certain bill was paid, look it up in the system and it will tell you when the bill was paid, the check number and any other details about the vendor–all organized in one place. If you lose an invoice or a bill, information about it may still be found in the program. You can send out duplicate invoices easily. Instead of flipping through papers, you can look for information that is stored in a systematic way.
Cost
Another advantage of using accounting software for small business is the low cost of programs. Basically, accounting software can be very affordable and a great value. Costs for training should also be considered, but they are usually affordable for the small business owner.
If you are hesitant to get new software because your computer is old and unreliable, consider using online versions of the software, where you go online to use and save your data, not using your hard drive. Intuit is offering this service for Quickbooks, called “Quickbooks Online.”
Do not forget how much you will save in tax preparation every year, once your information is all organized, ready-to-go and not in manual entries or in shoe boxes.
Seamless collaboration with your accountant or colleagues
If you’re already working with an accountant, collaborating with an accounting software can make the relationship stronger. You can upload your documents, send your invoices, and import your bank transactions so they have all the information they need to manage your accounts.
When managing expenses, it’s important your colleagues or employees have access to upload their expenses so you have a clear view of what’s being spent.
Conclusion
In a sticky economy, small businesses must continually seek out creative ways to save money. Many small business owners feel the best way to do this is to do away with a standard accounting system in favor of a specialized, online system that offers value for money.