Business owners don’t survive without proper accounting processes. That’s because of their legal obligation to track money flows and file taxes. They can choose to do their own accounting for their business, but this is a tedious, time-consuming, and inefficient process. Alternatively, they can outsource bookkeeping functions to an accounting firm, but that generally means costly fees. Lastly, they can use accounting software to automate the process. This saves time, money and minimizes human error.
But what is accounting or bookkeeping software?
Business accounting software refers to a platform that gathers all the tools for managing and processing financial data. It lets you take control of your monetary resources easily and efficiently at any specific point in time.
Should your business use accounting management software?
The following benefits can help you assess an accounting program’s potential:
It simplifies the whole process. With manual accounting, a business owner has to perform the entire accounting cycle periodically, either using paper or some form of excel spreadsheet. Such an approach requires recreating ledger and charter templates, making calculations and putting formulas in place, adjusting for errors, and creating a ‘reports’ view each time from scratch. With an outsourced team, the process is also complicated as you have to transfer the information to the external team once the transaction has been completed. Accounting programs, on the other hand, require that the business owner has only to record the transaction and the rest of the routine will be automatically produced in an instant.
Tax compliant. Aaccounting software has features dedicated to payroll assistance and tax reporting. These accounting platforms become your best source of tax and audit information as they store all the important details that allow you to automatically calculate local and business-specific taxes.
Very cost-efficient. In contrast to manual bookkeeping, accounting system software automates core calculations, saving time and valuable resources from recurrent tasks. If compared to accounting outsourcing, the software substitutes human knowledge and bookkeeping tasks with a predesigned set of accounts, tax forms, and custom reporting tools. In short, there’s no need for outsourcing these tasks and incurring the added expense. And since the accounting is done online, it effectively reduces costs from printing and distributing documentation.
Data reliability. Human mistakes can be very costly. By reducing the occurrence of manual errors with automation, you’ll spend less time fixing problems and avoid costly inaccuracies.
Measuring performance and forecasting. The best accounting software lets you understand the patterns and trends of your financial performance. This is something that would take a long time to complete if done without a simple accounting system in place. Accounting management software gives a clear overview of the current financial state of your business and an accurate future forecast. This way, you’ll be able to develop smart strategies and allocate resources with relative ease.
Reliability. A company’s financial data is perhaps its most valuable information, so security is always a major consideration with online accounting software. Secure accounting systems prevent financial data from getting compromised in any way. You’re also able to retrieve backup data in case you need them.
The boost in overall productivity. Accounting programs take your most cumbersome, mundane tasks of collecting, organizing, and analyzing data, and makes the process more efficient and effective. This helps business owners make smarter use of their money and enables employees to do more actual work.
Better customer relationships. Top accounting software has an effective billing and invoicing feature integrated. This ensures that there won’t be delays and miscommunication when you’re doing business with customers.
From the aforementioned benefits, it’s easy to see that there are a lot of ways accounting software can optimize your business. With the benefits already identified, let’s now list some of the options offered by different accounting software providers.
Accounting – Bookkeeping is undeniably the main feature of an accounting platform, so it should be the focus of scrutiny in your search for a reliable solution. Check to see features on fixed assets, accounts payable and receivable, reporting, and bank reconciliation, among others. These are the basic and most important ones, but it’s not rare to see more advanced options.
Billing and Invoicing – The best accounting software for small business lets you prepare accurate custom invoices against expenses and resources, email them directly to the customers and set up different online payment methods. For repeat customer and repeat invoices, the platforms allow you to create a recurring profile and send invoices on your behalf with either manual or automatic billing. You can manage invoices by tracking when an invoice is viewed, becomes overdue, or gets paid. And once the invoice is paid, the software will automatically record each payment in your account. Also integrated into the platform is the ability to manage and pay bills as well as generate on-demand billing and payments reports.
Budgeting and Forecasting – This feature calculates and interprets finance performance for the current year and estimates the cash flow for the next. This is helpful for companies when they want to set up feasible and optimistic targets.
Fixed Asset Management – The fixed asset management feature is always helpful in accurately managing financial data. This paints a clearer picture for business owners when it comes to their audit history, cost records, depreciation, and resource allocation, among others.
Payroll Management – Accounting and payroll software lets you process employee payments, benefits, and deductions while staying compliant with legal and regulatory changes.
Project Accounting – The project accounting feature is very useful for industries that deal with different projects on a regular basis, including construction and software development. It estimates overhead, labor, equipment, and material costs, among others. Some platforms include time tracking for projects and customers with automatic invoice conversion and billing.
Fund Accounting – Accounting system software for nonprofits and government agencies usually have the ‘fund accounting’ module. What’s unique about these is that they include functions like donation expenditures tracking, grant management, audit trail, and specialized financial reports.
Inventory – Inventory management system is developed for stock control, with all the necessary tools to track and manage the shelf-life of your product line. This gives you control over the availability of your products and reduces delivery issues like over- or under-stocking.
Choosing the best accounting software
Now that you’ve identified features and benefits of accounting software, the next step would be to weigh your options and see if it’s the right one for you. Accounting is vital when you’re running a business, no matter how big or small the company may be. You may opt to just go with manual accounting, thinking that your business is small enough to handle it on your own. This exposes you to potential human error and unnecessary overhead, which could prove costly in the end. It’s also hard to consider outsourcing accounting if one of your concerns is cost-effectiveness.
Fortunately, accounting software for small business can do the heavy lifting for you. Platforms like semilimes give you all core features and deliver the benefits listed above. You’ll be able to manage and control the financial aspect of your business at your own pace, anytime, anywhere. Sign up and try an accounting software today and see for yourself how this will benefit your company.
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