Advantages of Using Small Business Accounting Software

Almost all of the small business
owners I meet love to save money by doing things themselves. Using small
business accounting software is one way you can do that.

Almost all accounting software
vendors have moved their products to the cloud and offer online
subscription-based services ranging from basic to advanced in features and
price. For around $10/month vendors such as FreshBooks and Zoho offer starter packages suitable for
freelancers
and sole proprietorships, including invoicing, expense tracking, and simple
reporting.

Businesses that are incorporated
and/or have employees
typically need more advanced accounting packages such as QuickBooks and Sage 50
that can perform double entry accounting, which includes Accounts receivable, Accounts payable, and General ledger capabilities. Other features available in more advanced
offerings include payroll, multi-user access, currency conversion, time and
billing, inventory tracking, customer relationship management (CRM), analytics, and more.

Regardless of your needs, accounting software can be a good compromise between trying to do your own
accounting using spreadsheets and hiring a professional to do all of your small business's accounting.

Here are the main advantages using
small business accounting software offers you:

1)
Immediacy

Whether you are running a retail operation
where each transaction is electronically entered as it occurs or a one person
consultancy where you are personally entering your transactions bi-weekly,
using small business accounting software forces you to keep up with data entry
and stay current.

And being forced to stay current has
the added benefit of keeping you tuned in to the financial pulse of your small
business. You have a much better chance of spotting a cash flow gap
or a customer who's developing a serious credit problem than the small business
person who's just throwing all the receipts and invoices into a drawer and
dealing with them at the end of quarter or year.

2)
Mobility

Cloud-based
accounting software gives you the advantage of being able to access your
business accounts from anywhere. As well as supporting the most commonly used
web browsers most online accounting software vendors provide iPhone/iPad and
Android apps, allowing you to (for example):

  • Send an invoice directly from your mobile device.
  • View client, expense, or invoice information.
  • Record expenses immediately and attach receipts. For
    example, you can snap a picture of a dinner tab with a client and attach
    it to the expense.
  • Track billable time with a built-in timer.
  • Import a new client
    directly from your phone contact information.

Another time and money-saving
advantage of online accounting software is the ability to allow your accountant
direct access to your books through the online application, rather than having
to manually transfer paper or electronic files whenever they need access to your accounts.

3)
Centralization

Using accounting software
centralizes many aspects of your business's financial management as you will be
able to deal with tasks such as inventory management, invoicing, payroll and
even some aspects of customer relationship management all from within your accounting software program.
Centralization saves you time and money as you don't have to purchase separate
software programs to do things such as invoice customers.

4)
Simplifies tax compliance

Besides showing how much tax is
payable on particular invoices, small business accounting software also allows
you to prepare reports showing, for instance, how much of a specific tax your
business has paid over a certain time period, making it easier to gather the
data you need to complete and file required government tax forms (such as, in
Canada, GST/HST
returns). Some business accounting software even allows you to directly file
GST/HST returns.

5)
Provides analysis tools

Having good business accounting
software is like having an in-house financial advisor; the customizable reports
allow you to analyze different aspects of your small business, providing the
data you need to make better financial decisions. Reports such as Balance Sheet
Summaries show exactly how well your business is doing at the moment while
reports such as Customers Who Owe Money let you manage your Accounts Receivable more easily.

6)
Accuracy

Because small business accounting
software does so many of the necessary calculations for you, your financial
data will have a higher level of accuracy than it would if you were keeping
old-style pen and paper records – especially if you have several different
people inputting the data.

Implementing business systems is one
of the best things you can do for your company. They will give you many
benefits only if you properly design them, apply them and not excessively
emphasize the administrative function that can turn your company into a
bureaucratic organization.

This is the second part of the
series of posts related to business systems. The first part is about how you can implement business systems into your
company
. In this post, I will continue to
talk about several benefits for entrepreneurs and small businesses when they
perform a systematic approach to their companies.

What are the most important benefits
for you and your company if you implement the systematic approach to designing
and managing your business? With the right business systems:

It also makes it easier to access and provide accurate information. Need a supplier's mailing address? To know when a customer last made a payment on an outstanding account? Or how many ACME yoga mats you have in stock? It's all right there. Benefits You Will Get if You Implement Business Systems in Your Company

1.
Your Company Will Meet and Surpass All Customers Expectations

If you use the systematic approach,
you will have a specific marketing system that will have a subsystem to watch
the expectations and satisfaction of your customers. This subsystem will
analyze, measure, compare and give you possibilities to make specific
conclusions about what your customers want, and what they just don’t want but
you are doing. In such a way, you will have constant information about things that
will need to be improved and what is more important you will know how to
improve them most properly.

2.
Your Company Will Produce the Same Quality Results Every Time

This state in which you can
repetitively produce the same and better results every time can be achieved
only with business systems implemented in your company. Imagine what will
happen if you don’t have a system that will make the structure of each activity
and task for each of your staff members. All your staff members will work
differently at each repetition of the job and because of that will also give
entirely different results. Therefore, business systems should ensure quality
in the realization of all activities each time with same or better quality than
previous.

3.
You Will Improve Employee’s Performance

Productivity is the work done for a
specified period. If you complete the same job faster, the productivity will be
higher. If any business activity is finished faster than last time your
employees will become more and more productive. The productivity will also
increase your employee’s performances.
The goal of the system is to enable proper education and opportunities to all
staff members to make them able to complete their work more efficiently and
effectively.

4.
Your Company Will Reduce Costs

If you don’t have repeat
activities several times to finish them in the most quality way, you will
dramatically cut costs due to fewer mistakes in your company. All your tasks
must be done with the higher possible quality for the first time.

5.
Your Company Will Become Organized Business

The only thing that can provide the
quality of the organization in the company is business systems. Without
adequate systems, it will be much harder for anyone to organize themselves.
Because of that, they will have many difficulties to do their tasks in the way
they need to do them.

6.
Your Company Will Solve All Problems on a Consistent Basis

You are designing business systems
in such a way so they bring feedback on a continuous basis. The feedback will
send you signals about all possible problems that have occurred. Because of
that, you can quickly solve them. Problem-solving process means change for
your company, and change
is an improvement. With business systems in place, you will have possibilities
to continuous improvement your systems. In such a way, you will also
improve your overall company.

7.
Your Company Will Increase Profitability

Because of all previous benefits I
have mentioned here, you will increase the profitability of your company. By
improving business productivity and performance you will reduce your costs.
But, it is not all. You will satisfy the expectations of your customers,
delivering the same or better results every time. You will have a better
internal organization and constant problem-solving process. So, you will simply
increase the profitability of your company.

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