Entrepreneurs have enough things on their plate all ready to take on an additional task such as accounting. They would rather spend their waking hours doing what they love, which is to come up with different ways of bringing in more business.
Those who are not acquainted with accounting may not find it to be an exciting task, in fact, they might even be intimidated by it. However, regardless of how accounting is perceived by a person, one cannot deny that its efficient bookkeeping is one of the pillars which a business needs to stand strong.
There are many accounting programs which can be bought on the internet which allow people who run their own business to maintain records properly, regardless of how unfamiliar they are with the intricacies of accounting. The simplicity of these programs makes it easy for businesses to keep records without having to hire additional staff.
Following are some reasons why you should accounting software:
Helps You Save Time and Money
If you are not using accounting software, the task of bookkeeping can prove to be extremely complicated. You may spend a lot of time trying to figure out how to keep the records properly. You may find yourself entangled in a mess, a situation which you could have easily prevented if only you had bought an accounting software.
There are many concepts in bookkeeping which are difficult to understand such as double entry accounting. Purchasing an accounting software will certainly prove to be more cost-effective in the long run than hiring an accountant. These software applications are easy enough to get you started right away.
The time and money that you save can be utilized for the expansion of your business or to handle the other aspects of your business such as hiring additional staff to increase your productivity. Moreover, most accounting software vendors provide help and support to resolve any issue that you may be facing with the software.
Control your Cash Flow
As a business professional, you must be already aware that there are bills to be paid. Also, there may be unpaid invoices which means you also need to monitor the inflow of money into the business. Controlling your cash flow is an almost equally complicated task as bookkeeping.
By using accounting software you can conveniently keep track of the cash flow. The software helps you keep track of the debt that your customers owe to the business and also helps you to create invoices. By letting a software keep track of your cash flow, you will be tuned into the financial health of your business at all times of the year and not just at the end of financial quarters.
Helps You Prepare Your Taxes
Needless to say, the thought of putting together all the receipts and documents which are needed to file your tax returns, without the help of an accountant or accounting software, can send chills down your spine. The money that you spend as well as the money that you earn can be documented with ease if you are using accounting software.
You simply need to feed the values in the relevant columns and the software will do the remaining job. With the click of a mouse, you can send all the information which you need or your accountant needs to keep on top of your accounts. The fact that your data is accurate and highly organized will make your accountant’s job easier and will certainly reduce the scope of making errors.
It Does the Math
A good reason why you must use an accountancy software is that you do not need to perform complicated calculations yourself, which is often the reason why companies get their data wrong and get into all sorts of trouble. As an accounting software does all the calculations for you, the scope of making silly calculation mistakes is greatly reduced which increases the accuracy of your data and helps you to make sound financial decisions.
Errors in business finances can have dire consequences for a business and must be avoided at all costs. For example, when you are manually keeping records, there is a high possibility to make mistakes whilst calculating the VAT which is payable on a particular bill. Paying fewer taxes than you are supposed to can attract penalties from HMRC which is something most entrepreneurs wouldn’t want to experience. With accounting software, these calculations are made instantaneously and accurately.
Wages Are Made Simple
If you purchase a license to an advanced version of an accounting software program, it may include the feature of payroll management. This means that you will no longer have to keep manual or spreadsheet records of your employees’ wages. This will further simplify the task of making reports at the end of the tax year.
Making Tax Digital Compatible
Most accounting software applications are compatible with the Making Tax Digital scheme which has been recently introduced by the government. It allows you to send digital copies of your tax returns with the HMRC. Since the finances of your business are recorded digitally on a regular basis, filing a digital tax return with the HMRC has become extremely easy and convenient.
Can be Connected with Online Banking
As internet banking is a great tool to manage your banking services, you may have it already activated for your business banking account. If you have paid for an advanced version of accounting software, it may even include the feature of synchronizing the finances of your business with your business bank account.
Accounting software helps you to centralise the key tasks and processes of your business such as payroll, customer relationship management, inventory management, invoicing and many more. Instead of investing money into buying separate software programs for each of these tasks, you can simply purchase an accounting software and handle them in an efficient and streamlined manner.
It would be unfair to say that you must use an accounting software because it has several benefits as it is more of a necessity than a luxury.