Signs it's Time to Invest in New Accounting Software

Signs it’s Time to Invest in New Accounting Software

Gone are the days when business owners need to spend hours with a manual accounting ledger. As technology has advanced over the years, accounting software tools have been developed that can be used to automate business financial systems and improve overall results for a company.

Are you satisfied with your accounting software? If the software doesn’t perform the full functions that are needed, or if you haven’t implemented an automated system yet, then it might be time to talk to an accounting provider for assistance. Creating the right foundational systems for your company might be the most effective thing you can do to set yourself up for a successful future.

What is Accounting Software?

What does accounting software do for your company? This fundamental application is created to track and record the way money flows through the business accounts. Not only does this information need to be documented for external and internal review, but it is also necessary to have the records in case auditing is required.

Accounting software is used to determine the financial health of a company. The numbers show the inflow and outflow of income, which has an impact on the cash flow that is available. Business owners need to consider these requirements to ensure legal compliance and internal systems.

A variety of features are available through the software program. Some of these accounting features are standard throughout the industry, but there are differences in the way the computer programs manage your financial information. Common tools available through a reputable accounting software provider include accounts payable and receivable, billing, inventory, purchase orders, and the general ledger. Often, business owners can also choose software programs that include payroll processing, expense management, budgeting, timesheet tracking, electronic payments, and more.

Why Accounting Software Matters

Why does it matter if you have the right accounting software program for your business? If you want to point your company to future success, then you need to be sure that the financial information can be tracked quickly, effectively, and accurately. Your software program will be able to provide an instant snapshot that shows the overall financial health of the business. You can run reports to see profits and losses, as well as a variety of other financial transactions that might impact the success of your company.

When a business owner has access to up-to-date financial reports, it is easier to determine the real financial situation that is faced at any given moment. Too often, business owners make financial decisions in the dark. They can check the current bank accounts, but don’t know where the true standing of the company lies when it comes to cash flow. Making big decisions without accurate information could cause financial issues in the future.

For example, you might choose to invest the available money into a marketing plan or new inventory development, only to find later that you are unable to keep up with tax payments or payroll expenses that are due because the money was already spent. These issues are easier to avoid when you have a clear picture of your current and anticipated expenses, as well as reports that show the money that is coming in. Not only do you need to see the current totals in your bank accounts, but it is also important to evaluate the way your money will be flowing over the next few months.

Minimizing Labor Intensive Tasks

While accounting software can be helpful so that you can avoid legal issues and tax problems, it is also important to see the internal benefits that are available for your business. It is important that you are tracking the tax burden that will need to be paid when it is time to file annual taxes. Additionally, you need to know whether your business is profitable or not, allowing you to make changes with ongoing decisions that could impact your overall success.

Have you considered the time and labor burden that goes into a manual accounting system? Some business owners are stuck using old technology, such as manually calculating costs and revenue on spreadsheets or using a handprinted ledger. These systems worked in the past when automation wasn’t available. Now that systems can be used to automate the tracking, it doesn’t make sense to waste hours and hours of time each week on manual calculations. A better system is to implement a good accounting software, then have regular account reconciliations to ensure that nothing is slipping through the cracks.

As business owners implement the right software solutions, they can see how accounting technology brings in new opportunities for business development and growth. If you want to grow your company, then it is important that you are using all of the tools available.

Benefits of Accounting Software

We’ve already mentioned a few of the notable benefits of accounting software. Here is an overview of all of the benefits that business owners enjoy from a good software program:

  • Simplicity: Eliminate the need to spend time on complicated calculations and manual tracking.
  • Savings: Since the basic calculations are completed within the accounting software, you can save money on the labor and financial management services. Also, costs are reduced by using a digital program instead of the need to print and file documents.
  • Financial Clarity: At any given point, you can run reports and see full clarity and transparency of your business.
  • Productivity: Don’t waste your limited work hours on manual accounting calculations. Let the accounting software do the heavy lifting so you can turn your attention to other business responsibilities that need to be addressed within your company.
  • Avoid Mistakes: Manual calculations always pose the risk of mistakes that could occur. Avoid these human errors by implementing a good accounting system. You don’t need to worry about inaccurate data when an effective system and accounting service is used.
  • Future Forecasting: Not only will financial reports help with paying the current bills, but you can also look ahead to the future to determine the trends and patterns in your company.
  • Taxes: It is important that you are detailed in your accounting to determine the tax burden. Also, rest assured knowing that your software helps you maintain compliance based on requirements established by the IRS.
  • Information Security: A good accounting program will have security features that keep your information safe. No need to worry about your financial information being jeopardized when you choose a reputable service.

Upgrading Your Accounting Systems

Now that you see the benefits that are available, it’s time to evaluate whether or not you are leveraging the full advantages for your company. It might be time to upgrade your systems by investing in new accounting software. Here are a few signs that your company needs a new accounting system:

  1. Business Growth: As your company expands, you need to be sure that your accounting software will be able to keep up with the growth. Consider your current business size and anticipated growth. If you are anticipating big changes in the future, then it can be beneficial to implement a new accounting program now to minimize the growing pains in the future.
  2. Reporting Needs: Are your current financial reports sufficient to provide the information needed for your business decisions? Sometimes companies need more detailed reports showing the profitability of the company and cash flow trends. If your accounting system doesn’t have these automated reporting features, then it might be time to upgrade.
  3. Specific Features: Also consider the specific features that might be needed for your business. For example, if you have two separate systems for payroll and AP/AR, then you might consider switching your software services so that you can keep all of this information in the same accounting software. Talk to an accounting professional to determine the specific software features that are needed for your business.
  4. Transaction Details: How many transactions are moving through your company each month? Some of the startup accounting software services are designed for companies that have just a few transactions moving through here and there. If you are growing and the number of transactions is expanding, then it is probably time to implement a new software service that can handle the growth.
  5. Cloud-Based Services: Where is your accounting data stored? If the information is kept on your computer hard drive, then you face the risk of losing all of this valuable data when the computer crashes. Hardware doesn’t last forever, and it could be devastating to lose the financial history of your company. Instead of relying on a desktop system, you should make a move to a cloud-based software as soon as possible. If something goes wrong with your computer, you can still access the essential files since the information is stored in the cloud.

Learn More About the Right Accounting Services for Your Company

At Easier Accounting, we are experts in small business accounting services. If you are considering your options to improve your accounting software, then our team is here to assist. We offer full-service accounting solutions for small businesses and startups. Call today to discuss the solutions that will meet your needs: (888) 620-0770.

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