Bookkeeping had existed even before computers were created! The process is tedious yet necessary for any business to thrive. As a business owner, you want to know your every penny is well tracked. And good bookkeeping helps you do just that.
But thank God for accounting software, we don’t need to go through the grunt work of balancing sheets anymore. After all, time saved is an opportunity made to grow your business in other areas. Hence, here are the top three reasons how accounting software can help your business to grow.
Cuts down recurring SOP
Manual recording increases the likelihood of making errors compared to a software that does everything for you by just one click.
For example, say a customer order from you. By using accounting software to prepare a sales invoice, this automatically updates your customer details, credits your Sales account and debits your Accounts Receivables. You can also choose to print out your customer’s statements.
With these inbuilt processes, it’s very unlikely you will miss keying in double-entries. This is because each entry you make will cause the software to prompt you to either designate or create a corresponding account.
The software has also been coded to have a total debit to equal with total credit. Hence, any imbalanced total amount can be tracked instantaneously. No need to go through the list of entries for hours to track the error. But you can find it faster with the recency of discovery.
Accounting software enables you to see real-time information gathered from the accrual method. Numbers speak volumes, and you can have a rapid glance of how your business is doing – like a Facebook status.
The software would most likely come with basic classifications. This would include assets, liabilities, stockholders’ equity, operating revenues, operating expenses, non-operating revenues and gains, and non-operating expenses and losses. With this, you can make quick informed decisions, and adjustments to reduce your bottom line and increase your net profit.
Also, with software, you can generate your balance sheet, income statement and cash flow statement immediately. This process is especially helpful in speeding up any bank loan process or convincing an investor.
Good customers are good paymasters. And software can help you track who’s a villain by looking at the updated Accounts Receivables and aging list.
This allows you to quickly implement payback strategies. For example, you can motivate them to pay early by giving a discount or charging a penalty fee for late payment. Just do what you can to get out of any bad debt.
On the other hand, the software can also remind you to meet the payment terms of your suppliers from your Accounts Payable. That way, you can pay your suppliers on time and not waste money on late payment penalties.
Lastly, a thing to take note of is that accounting software is just an assistant. It still needs an internal controller or accountant to check the accounts. This is because the software cannot detect if whole transactions are omitted, incorrect accounts were assigned, or amounts were entered twice, wrongly and illegitimately.
Hence, to safeguard your growing company, make sure different persons are assigned for cash-handling and processing accounts receivables. Also, the person processing receipts or handling cash account cannot reconcile bank statements as well. As an owner, take the extra steps to approve all purchase orders and credit memos to customers, track all payments and sign all checks.
With all these measures, accounting software can streamline your business in an exponential way. From basic accounting to full-blown accounting software, we trust you can find one that is right for your business.