With the changing landscape of business, the growth parameters have also evolved with it. Accounting has become more complex with the increasing business operations and government regulations on accounting standards. With traditional accounting methods, you waste a lot of time on redundant calculations which are inclusive of human error, along with a lot of processing and storage costs.
But it has become simple through the best accounting software technology. As a small business owner, it is easy to get caught up in a bundle of tasks and lose track of time and money. With the best accounting software, your accounting operations including accounts statements, profit and loss statements, cash flows, balance sheets, expense management, etc. get automated and provide error-free, prudent insights into the business performance.
Switching to an accounting software requires a lot of understanding of its features and benefits, as you don’t want a solution without the problem, or a wrong solution for the wrong problem. Let’s understand why you should switch to accounting software in this era.
1. Improved Productivity
Every business wants to achieve high efficiency in its operations for consistent growth. But this is possible only when your administrative duties are handled properly, so that you can focus on profit-generating activities.
The accounting software allows you to ensure error-free, faster calculations of your business transactions. If you’re operating cloud-based accounting software, you can also access and monitor your accounting data from any location and at any time. This solution keeps your data secured in one place, which removes the need for physical paperwork digging and sorting.
At the end of the day, you can complete business operations like marketing, sales, product development, etc. without any stress of accounting work.
2. Automated Accounting
Depending on your business requirement, you choose the accounting software for various purposes – adding totals, compiling statements, and generating invoices. But, you don’t just want a software for calculations.
The accounting software offers core accounting tasks – budget forecasts, financial statement preparation, accounts payable and receivable reconciliation, tax computations and filing, managing balance sheets, etc., which helps you understand your bottom line clearly for better decision making.
Also, you can integrate the accounting software with expense management software for easy expense calculations and effective reporting.
3. Simplified Tax Filing
Filing taxes and getting notice from the tax department is a nightmare, which every business owner wants to avoid. But that becomes more prone to using the traditional approach, which includes misrecording sales, losing physical receipts, etc. It can land you fines, penalties, and possible legal action from the government.
This all can be avoided with the accounting software in place. The software keeps your records electronically sorted in cloud storage, or some hard drive in case of the desktop version, which helps in easy tracking of transaction history and smooth audit.
4. Audit-ready Data
For a smooth audit experience, your accounting records need to be complete and accurate. Your every transaction should have proof of expense or sale, and if the auditor finds any anomaly you face legal penalties.
The accounting software ensures that your accounting data matches your transactions and expenses through its in-built integration with your bank accounts and payment modes. This way you are always audit-ready, as the software records real-time data in the system, and you can get the comparison analysis any time in your financial cycle.
5. Insightful Reporting
Another creative feature of the accounting software is its insightful reporting feature. It is important to record and calculate the financial statements automatically, but performing analysis of that data is another task.
The reporting feature of accounting software provides real-time insights into the accounting numbers, comparing the previous year’s performance, and allows business owners to make informed decisions with error-free data. It enables the stakeholders to prepare precise budgets and forecast the business growth through performance indicators calculated from accounting data.
6. Data Security
The security of accounting and financial data is crucial for all industries. Handling physical records and maintaining them makes the data prone to theft and security breaches, both internally and externally.
With accounting software handling and managing your accounts, you don’t need to worry about the security of your financial data. It provides a double layer of security protection – passwords changing every month, and restricted access both in terms of duration and individual. More importantly, the software backs up the data timely for another layer of security to the accounting data.
Shifting from a traditional accounting methodology to a digital solution is a smart choice. Many businesses are switching to accounting software as it provides improved productivity, automated core accounting tasks, simplifies tax works, provides insightful reports, and maintains high security of data. Your accounting becomes simplified and effective with this sustainable choice.
Image Credits: Towfiqu Barbhuiya