Accounting helps you keep track of assets, liabilities, income, and cash flows. All of this information is crucial for tracking your business’s financial health and performance, which will enable you to make more informed decisions. Despite how important accounting is for the financial health of any business, business owners often struggle with the accounting process. This can be attributed to the usage of paper-based accounting methods, wherein all the tracking needs to be done physically, and intense manual labour is of utmost importance.
We’re in 2021, and almost everything has gone digital – especially the more mundane and regular tasks. Automation has taken over businesses globally and has helped improve processes and streamline tasks. A business accounting software offers similar automation and streamlining of all the accounting tasks and processes, giving you more time to focus on business goals. In contrast, the accounting aspect is taken care of by the software. Research suggests that 58% of large companies are already using business accounting software. It is estimated that by the end of 2021, more than 70% of small businesses would have moved to accounting software.
Let’s walk through some reasons for such drastic migration towards the best accounting software, along with why you should look for accounting software for your business today!
Reduce the chances of mistakes
Manual accounting practices come riddled with chances of errors in data collection, calculation, or analysis. This can be avoided by simply using business accounting software which will automatically perform all the calculations accurately without you having to interfere or spend time. This is a huge benefit, especially if your company prepares comprehensive invoices which specify the items or worked hours at various rates and various times. With accounting software, all you need to do is just pick the items for invoicing, enter the quantity, and the tool will do the rest for you.
Prepare accurate invoices and financial documents
Accuracy in financial documents and invoices is extremely crucial for all businesses. Ensuring that you are collecting correct data on your work – including the effort your staff has allocated to the job and additional costs you might have incurred on the said task – is imperative for your business to make a profit. If you perform the accounting task manually, the chances are that you might miss effort or costs – which might lead you to charge lower than you should for the particular task, resulting in losses for your business. Accounting software helps by automating all the invoicing processes by using templates, automating the collection of work data using timesheets, and automating the allocation of jobs using expense tracking. In doing so, the software rids you off of any potential mistake that you might have made in your financial documents.
Streamlined cash flow management
Accounting software gives you the ability to record and track all your payables and receivables on the go. That way, you get to stay on top of your current cash flow status and predict the near future. Further, you can keep all the records of bills and invoices with their corresponding payment dates, which will help you avoid overdraft charges or late fees.
Transparent and accurate real-time reporting
Real-time reporting is one of the most important reasons you can implement business accounting software for your business. Real-time reporting requires seamless integration with your bank accounts to track expenses, sales, and inventory. With the dashboard that comes with accounting software, you get to track all of these accounts and metrics that you want. You won’t need to wait or spend time for something as simple as bank reconciliation, as accounting software lets you do the reconciliation in just a few simple steps.
Precise inventory tracking
Accounting software comes with inventory tracking features using which you can accurately track your inventory just by using the application – thereby saving you a lot of time. Further, you will also be able to get up-to-date details on the amount of stock remaining in your inventories, along with a forecast on when your stock is likely to run out – so that you can be more proactive in your approach!
Strategic planning of business goals
Business accounting software gives you all the data and insights you need to perform strategic planning and financial analysis to stay ahead of your competitors. Using this data, you and your finance team can create elaborate business and tax strategies by utilising forecasts, scenario modeling, and analysing the impact of market trends and investments.
Accounting software has already revolutionised the way businesses engage in the routine yet important tasks of accounting. Businesses need to invest a lot less time into accounting processes, with the accounting software taking care of most of the routine tasks. As more and more small and medium businesses adopt accounting software, we are likely to see many more successful and financially healthy businesses in the years to come!