If you are a business owner, you’ll know that keeping all of your financial issues in order can sometimes be a bit of a nightmare. Keeping track of all of your transactions and ensuring you are complying with all the necessary legislation and requirements can sometimes seem to take more time than running the business itself.
However, clever accounting software is now able to solve many of these issues and save your precious time too. Many accounting software applications are ready made for new digital taxation rules, and with a few pointers, are easy to use for even a beginner.
Specialised software can save you time and money through benefitting you in the following ways:
1. Monitoring finances consistently
Prior to the introduction of this kind of accounting software, many businesses were monitoring their accounting at the end of the tax year when all their data was collated and analysed. But doing it this way is a lot work at one point in the year and it means the results aren’t always accurate. It also means that you are spotting issues sometimes a long time after they’ve occurred. Things are now changing however, thanks to the introduction of simple accounting software tools. You can now monitor your records consistently across the year using computerised bookkeeping systems. It’s easy to get your financial reports whenever you need them as they’re constantly being automatically updated and if you have any issues building up in your business, you can spot them, and then resolve them, as early as possible, rather than having to wait until the end of a tax year to discover what has been going on with your finances.
2. Accuracy of data
While anything that a human being does is prone to errors, using software in your business reduces those chances of making such errors. With the software tools available, you only need to enter specific data once and the programs will do the required calculations for you. It is fast, straightforward, and accurate.
Sometimes errors in accounting can expose a business to legal consequences. You can now negate this risk by using applications which eradicate many of the types of errors people were commonly making when entering information under their old systems.
3. Time saving
Doing accounting tasks manually is not only taxing but also time consuming. The automation in accounting software makes everything simple and easy. You won’t have to spend hours preparing your books and manually double-checking everything against your invoices and receipts. It takes minutes with a computerised program. This saves a lot of time that you can put to better use in other areas of your business operations.
4. Actionable reports
It’s crucial that as a business owner you are on top of everything that is going on in your business. Finances are no exception. Accounting software lets you set up automated alerts that inform you of critical bits of information so that you can take immediate action on them. Information is there at your fingertips when you need it. Actionable reports help you stay on top of all the vital data you need to make good, informed decisions at the right times and keep steering your business in the right direction.
5. Easy management of cash flow
Managing sales and expenses effectively and accurately takes a considerable amount of time and focus. But when it comes to cash flow, you can’t afford to take your eye off the ball for a second. With accounting software, you have a much better idea of your daily cash flow situation as you can easily and quickly track how much you’re receiving daily and how much you are spending. There are clear ways of determining crunch points that you may have coming up in the near future, and keeping an eye on outstanding payments and future bills that need paying.
Accounting software is cloud-based, meaning that you can access it remotely, wherever life or business takes you, whether you’re at home or abroad. With such software, you don’t need to be sitting at your desk to do your admin. It is possible to send invoices from a mobile phone, track time using a built-in-timer, record your expenses, connect receipts and view your client’s invoice details or expenses at the click of a button. Your accountant can also access the information using an online application without having to go through your files manually.
7. It keeps you updated
If you run a business that requires you to enter each order electronically, accounting software helps you stay updated with the latest data. Being constantly updated is important as it will help you notice any possible financial issues that might be building up, and allows you to take action before they become a problem.
8. It makes tax compliance easy
Did you know that computerised accounting systems can calculate the tax that you should be paying and can integrate with other systems such as your online banking, and your digital tax filing account? From April 2019, the UK government has changed the way VAT returns should be filed and any business earning over £85,000 now needs to comply with Making Tax Digital (MTD). This means that you will be required to use accounting software to track your sales and purchases, prepare your VAT return, and submit quarterly returns to HMRC. All of these things can be done simply with MTD-compliant accounting software.
9. Provides tools for analysis
Accounting software has customisable reports that let you analyse your business data easily. With the data it provides, you can make financial decisions more quickly and based on more up-to-date, accurate information meaning less guesswork and more informed decision making.
There are many benefits to accounting software. Whether you need to embrace these applications to ensure you stay compliant with MTD, or whether you just feel it’s time to get your business finances into a good place, you can be assured of accurate, simple record keeping without the cost of hiring in specialists to do the jobs for you. Staying updated gives you more control over what’s coming in and what’s going out of your business, and means that you can spot problems more easily and more quickly, enabling you to put solutions into place before the problem escalates. And whilst it might feel like an overwhelming move at first, the change to digital accounting is much easier and simpler than you might think.