Top Ten Reasons Why Small Businesses Should Use Accounting Software
Small businesses have the same financial responsibilities and tax concerns that large businesses do. The only difference being that a small business most often does not require a certified public accountant as a full time employee. Accounting is the financial process by which a business is able to summarize the costs it has borne and the profits it has made. Here are the top ten reasons why small businesses should invest in accounting software.
1. The Value of Good Bookkeeping
Bookkeeping is an essential part of any business and is especially important when it is time to calculate the tax due by the company or the tax return that it has to pay to the local and federal governments. Most accountants prefer clients who use accounting software for their basic bookkeeping as this simplifies their work also. Using accounting software can save the small business the cost of hiring someone to look after the bookkeeping for the company
2. Accounting Software increases productivity
Just because your company has been doing it’s accounting by hand and has collected tons of related paper work doesn’t mean it cannot change. It is important that accounting is handled in the most professional manner and with the use of accounting software the job can be completed accurately without any errors. Accounting software also simplifies the whole process and handles a various financial calculations and categorization of data at the click of a button. All it requires is the business data to be entered into the accounting software. By spending less time you can achieve more using a accounting software.
3. Easy for Tax calculations
Small businesses like other businesses have several financial and tax responsibilities to keep in mind when preparing their quarterly and year-end financial statements. Your tax professional will only be able to provide you good advice and guidance if he or she has access to accurate accounting information and use of accounting software can make this possible. Accounting software greatly simplifies and helps you to pay your tax dues correctly and accurately without incurring any penalties and fines.
4. Versatility of Accounting Software
Accounting software does more than just help small businesses keep a track of their expenditure, debts and receipts; it can in fact also create pay rolls, invoices, print checks, pay outstanding invoices, track overdue invoices, scheduled transactions, accounts payable, accounts receivable etc. Thus the software can help the small business keep a track of virtually all its financial dealings and ensure that no payment or bill is missed.
5. Banking With Accounting Software
The latest accounting software can also be linked to your banking account through Internet and the business’ banking information can be incorporated by the software to make relevant calculations, transfer of funds and deposits.
6. Convenience of Using Accounting Information
When using accounting software it is simple to send data and information to your tax consultant or to an outsource service provider through email to work on your accounting and financial data. For Small businesses this saves significant time and money. They can also maintain critical data like inventory, transactions and maintenance within their accounting software and can take various reports like inventory level; goods order status, goods shipment status etc. In nutshell small businesses can view their entire company’s financial pulse using their accounting software.
7. Combine Accounting Software with Other Software for Better Use
Most accounting software allow other software programs such as Microsoft Office and other related business application to integrate with it so that the small business owner can do many business processes such as keeping a track of inventory, list profits and losses from clients, etc. This simplifies the data sharing between other software and accounting software.
8. Easy to Use Accounting Software
Any small business accounting software like QuickBooks, Simply Accounting, Peachtree, MYOB, Microsoft office small business accounting , etc., are easy to install and use. All of the accounting software comes with manuals and tutorials for you to read and understand the software. The initial installation and setup may be little difficult and you may hire outsource service providers to remotely login to your computer and do the setup. Other option for small business is using Application Service provider (ASP), in this accounting software model small businesses can use other companies accounting software for a monthly fee. Either you own or rent the accounting software after the initial setup it will be relatively easy to use the accounting software to mange your small business.
9. Forecasting & planning
Accounting software can assist in keeping the small businesses in forecasting their current and future business strategies. They can easily compare their past and current data in various reports, graphs and can use their business data for planning and forecasting purposes.
10. Best practices
Using accounting software small businesses can instantly increase their operational and business efficiency by the best practices offered by the accounting software. By managing customers, vendors, partners, inventories, etc in the accounting software it becomes easy to manage and maintain it. Any time lookup, modification, adding of these data can be easily accomplished using the accounting software. Overall the productivity of small businesses increases with the accounting software.
No matter what type and size of small businesses you have, the need for accounting software is a must. Though you may run your small business without any accounting software, if you want to run your business efficiently and effectively with less resources and high productivity then accounting software is the right choice for you.