As a small business owner, you understand the importance of being on top of day-to-day administrative tasks. But, between juggling customer demands and vendor issues and managing operations and staff, it can be tough to allocate the necessary time and attention.
Accounting software programs can help minimize the amount of time you spend on administrative functions so you can focus on other aspects of running your business. These systems are designed to ensure that your business financials are accurate, reliable, and easy to understand. They can also help speed up your cash flow, reduce costs, and improve your budgeting, which will increase efficiency and ultimately help your business grow.
Whether you’ve been operating without accounting software or your business has outgrown what you’re currently using, having the right program in place is essential to your success. This involves zeroing in on software that meets your specific needs today and will scale with your business down the road.
Begin with the Basics
Selecting accounting software is an important decision. You’ll be using it to manage the administrative functions of your business on a daily basis and will most likely run it for a number of years. However, the process of choosing a program does not have to be complicated. Start by asking yourself a few basic questions:
- Why do you need accounting software?
- Which features does your business require?
- How much are you willing to pay?
It may seem obvious, but the most important step is to get clear about the reasons why you need accounting software in the first place. For some small businesses, spreadsheets or handwritten ledgers work well enough. However, if your business has grown quickly or you’re planning to expand, you may find that your tried-and-true manual accounting system is no longer adequate.
From the Desktop to the Cloud
It’s been over 30 years since the first small business accounting applications were introduced for the desktop PC, and today there is no shortage of options available for small businesses. Ongoing demand is fueling the growth of the global accounting software market, which is forecast to expand at a compound annual growth rate of over 6% through 2021.
Desktop accounting software continues to be available from traditional vendors like Quickbooks and Sage 50. However, the latest solutions are cloud-based. The small business accounting software market has embraced cloud computing in a big way, with traditional vendors migrating their desktop software offerings to the web and newer vendors such as FreshBooks and Zoho not offering desktop versions at all.
Online software programs are ideal for mobile users. They typically offer Apple and Android apps in addition to supporting popular web browsers, allowing you to send invoices and enter expense information anytime, anywhere.
Ease and Efficiency are Essential
Accounting software offers an array of technical functions and capabilities to help you better manage your finances. However, for many business owners, the most important features are time savings and ease of use.
Standard accounting software programs generally include time-saving features designed to simplify small business accounting. These include:
- Accounting tasks: Basic functions like invoicing, income and expense tracking, financial reports and reconciliation, and client and vendor management.
- Automated processes: Automatic billing, recurring payments, past-due notifications, and other processes.
- Tax preparation: Automatic tax calculations, multiple tax rates and tax reporting, and the ability to instantly email data and files to your accountant.
- Payroll processing: Enter time sheets, calculate pay, and issue checks to employees.
Beyond the basics, look for accounting software that will handle the unique demands of your business. For example, manufacturers have different needs than professional services firms. They need to account for raw materials and processing costs as well as determine the value of finished products. There are different methods of doing this, and it’s critical to choose the right program for your business and use it properly.
Accounting software is not just about the numbers. By performing tasks ranging from payroll to day-to-day transactions, accounting software can integrate all parts of your operations and automatically input data from other systems, such as your enterprise resource planning (ERP) system, point-of-sale (POS) system, customer relationship management (CRM) system, and credit card processing. This can help streamline your operations and make it easier to run your business.
Maximize Your Investment
With the array of accounting software packages available, it pays to do your research. Read online forums, ask colleagues or friends, and find out what other businesses like yours are using. Taking the time to understand the differences in accessibility, functionality, security, and fees will allow you to make an informed decision.
Keep in mind that your software is only as good as the time you spend using it. Make sure you select a program that caters to your business needs and is geared toward the end-user. Most accounting software claims to be “user-friendly”, but you and your staff will still need to learn how to use it. If you aren’t comfortable with accounting or find it too complicated or time-consuming to make regular updates, you will not be making the most of your investment.
Look for a comfortable and intuitive user interface and take it for a test-drive – most vendors offer a free trial period. Consider whether or not you can quickly get up to speed using the vendor’s online service and support tools or if you’ll need to invest in additional training. Be sure to budget accordingly.
At Summit Financial Resources, our goal is to make running your small business easier. As your resource for working capital financing, we can’t emphasize enough the importance of putting the right accounting software in place. It will empower you to do far more than track your financials or simplify tax prep: it will provide you with a valuable a tool for analyzing the way you do business and helping you do it even better.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.