7 Reasons to Use Online Accounting Software
I know that the majority of you will already be using online accounting software so this article is for those of you who haven’t yet made the leap forward.
The days of pencils and paper are over. Almost everything is done online now, and accounting is no exception. Online accounting software has a number of benefits for your business and you should set it up as soon as possible to set yourself in good stead for financial success. Many people debate the benefits of accounting software vs human accountants but it’s actually helpful to use both. Here’s how online accounting software can benefit your business.
1. It’s Easy to do the basics
One of the biggest benefits of online accounting software is that it’s easy to learn the basics. You don’t have to come up with an organisational system yourself and you can keep your accounts up to date by making a few regular entries. Make a habit of entering your bank statements (or setting up bank feeds), expenses and invoices and that’s the basics in there. Tasks beyond this are best done by a professional bookkeeper.
2. It’s Cost-Effective
Accounting software saves a lot of time and as the saying goes, time is money. Online software allows both you and your human accountant to access and review your accountants at the same time, saving a significant amount of back-and-forth communication. What’s more is that this type of software is generally billed monthly so you know exactly how much you’ll have to pay and when. Regularly paying a smaller fee is a lot more beneficial for cash flow than shelling out a large lump sum.
3. Seamless Invoicing
Invoicing errors can be costly but sometimes it’s difficult to keep track of everything at once. Accounting software allows you to stay on top of your invoices and remain aware of who owes what and when. You can even opt to be alerted when invoices are overdue, allowing you to take care of any problems quickly and efficiently.
4. Cash Flow Projections
Managing your cash flow well is essential to the financial health of your business; in fact, some would argue that cash flow is even more important than profit. Online accounting software creates forecasts for profits, losses and cash flow which can really help you to make informed financial decisions and prevent any nasty surprises. Cash flow problems can be really damaging or even fatal to your business, so these projections are incredibly valuable for effective money management.
5. Productivity
Paperwork and productivity don’t always go together. If you and your employees are consumed with dull paperwork, you’re more likely to lose motivation and get distracted. Online accounting software dramatically reduces paperwork through automated processes, which cuts down on man hours and allows you to put your time and effort to better use.
6. Accuracy
Human error is the leading cause of accounting mistakes. Miscalculations often lead to wasted time, a lot of stress and significant expense. By automating calculations and accounting processes, online software can help you to avoid costly mistakes and ensure that your data is accurate. In turn, this enables your human accountant to provide valuable insights into how to practice smarter spending and improve the financial health of your business.
7. Flexibility
Freedom and flexibility are often cited as key reasons why people start their own businesses, so you want accounting software that can help you to reach that goal. Online accounting software allows you to manage your accounts from anywhere in the world, so long as you have an internet connection. It also gives your accountant far easier access to your information, allowing you to consult virtually rather than face-to-face. Online accounting software allows you to stay on top of your accounts at all times, giving you far greater flexibility and freedom.
Summary
Online accounting software has a myriad of benefits for the financial health of your business. This software not only saves time, money and stress but it also allows businesses to operate with more flexibility. Lately, remote working has become the norm and so it makes sense to adjust your accounting processes in line with this shift.
We’re a Xero Gold Partner and in our opinion Xero is the best online accounting software for small and medium sized businesses. However, moving to any cloud accounting software is a big step forward compared to not using any at all.
P.S. Whenever you’re ready, here are 3 ways that I can help you to make more profit, take control of your cashflow and free up a big chunk of your time.
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