Twenty-eight million. That is the last count of small businesses by the United States Small Business Administration, which was published in their United States Small Business Profile in 2016. This number is not surprising since loans and other funding sources have become more accessible.
While starting a small business is no easy feat, keeping it open for months and years is a harder challenge. Forbes states hard facts: only 7 out of 10 businesses stay afloat for 2 years, 5 make it to half a decade, a third lasts 10 years, and only a quarter keeps their doors open for 15 years or more.
If you are just starting out, or if you have been in business for quite some time, you have likely encountered numerous tests, money management among them. However, there are better ways of dealing with your finances now because there are accounting software platforms available in the market that are designed for small business. Here are some ways it can change your business:
When you invest in an accounting application, one of the first benefits that you realize is the abstraction of paper from your accounting processes. You can say goodbye to your account books, ledgers, and paper invoices since you can store a whole host of information in your accounting system.
There are many advantages of accounting software. By going digital, you can save a lot of physical office space since you don’t need a multitude of drawers to store your accounts anymore. This can also lead to faster discovery of the required data, which can help in speedy decision-making, and more effective expense tracking.
Mobility is closely tied to digitized accounting data. The most used accounting software available in the market today is cloud-based so you do not need to install them on a computer or any other device. All you need to begin using any one of them is a stable internet connection and a modern web browser.
These cloud-based systems store your company finances in secure data centers or cloud storage solutions. With this, you can view your business’s financial information from your mobile devices while you are on the go. This way, you can keep a close eye on the in and out flow of cash in your company to ensure that spending is within the limits of the budget and the policy. With those controls, you can keep your small enterprise afloat.
Dealing with a huge amount of data is challenging even for the most veteran accountant. That’s why a modern accounting program can be a boon for your small business. Automation is among the technological advancements in the banking industry. Not only does an accounting application ensure the accuracy of the values, but it also gives you the aggregate of numbers faster. This leads to the elimination of manual calculations and tools like pen, paper, and calculators as well as to save you time from a redundant tasks. Every minute is precious to your small business so you can devote more time to finding ways to expand your reach to grow your operations.
For a company that is just starting out or has a small operation, effective small business management software needs to have the essential tools in an economical package. There are different types of accounting software solutions to meet different needs. With the accounting solutions niche booming because of the rising need for digitization, many vendors offer full-featured products. These allow you to oversee not just your AR, AP, and GL, but these enable you to manage invoicing, payment, inventory management, customer relationship management, and more. It also helps to have an equity plan management platform for your employees. By choosing a platform that meets your needs adequately, you can reserve most of your business’s capital and earnings towards growth-related expenses.
For every invoice, your company pays a certain amount of tax. The features of accounting software include aiding you in calculating this accurately. On top of that, you can generate in-depth reports regarding your company’s tax payments during a certain period. This way, you can be certain that you have provided the accurate information required by the government in your tax filings.
Aside from that, an accounting solution can help you determine whether you can submit tax credit claims. If you do, it would mean more savings for your budding business.
In the previous item, we talked about how an accounting application can offer in-depth information about your tax dealings. Other than tax reports, an accounting program can offer insights about your business practices. This is because your selected application has access to a vast amount of data that it can use to generate extensive financial reports. Among the insights that you can uncover is where most of your money goes and where your most profitable customers are located.
With such information within easy reach, you can better steer your small business in the right direction for optimal growth.
An accounting software, especially a cloud-based one, has the capability to connect with other systems via connectors of APIs. For example you can integrate with your bank’s online application. By synchronizing your accounting solution and bank platform, you can keep a close watch on the movement of your company’s funds even without logging in to your bank’s interface.
Furthermore, by integrating with third-party software, you can streamline the flow of information within your company. This means that everyone has a single source of truth, especially when it comes to financial data. As such, there is little (or even no) room for error. Your small business can benefit greatly from this because you can be confident your numbers are correct, your entire body of data is organized, and that your operations are fully compliant.
Leveraging accounting software for small business
With modern accounting tools in abundance, you no longer have to deal with numbers manually. You can count on your selected accounting solution to help you calculate amounts so you can avoid errors, reduce your time spent on crunching numbers, and focus on growing your small business instead. If budget is a concern, this FinancesOnline.com list of accounting software for startups is a good place to start.