The world is stressing upon keeping the books on computerized accounting software. But what if you are not concerned about keeping your financial records accurate? What if you are using the old school method of bookkeeping? The answer is you’re putting yourself in a tight spot. In the present world, the cost of not using an accounting software is a bit much!
There must be sufficient beneficial reasons that more and more organizations are switching to computerized accounting software from the obsolete particulars of accounting manually or in Excel. People who do manual accounting know that even in the presence of all the records and receipts, simple calculation mistakes, edits and errors can put you in deep trouble. So, if you’re unversed with the technicalities required for bookkeeping, let an accounting software do the needful.
Following are some disadvantages of NOT using an accounting software:
Taxes are perhaps the major reason why you should switch to an accounting software. Taxes are expensive and mind-numbing. But suppose if an accounting software costs you around $80/month, it is still cheaper than an accountant who spends approximately 40 hours a year on tax preparation and charges $35 per hour. Hence, an expensive accounting software will still save you around $400 per year. Using an accounting software will cut down your bill by reducing the amount of work your accountant would do.
If you are keeping the books manually; no matter how efficiently you do it, you always lose track of your important transactions. Today, majority of the banks let you download your bank account information directly so, you can easily keep up with your transactions. Moreover, credit cards tracking for businesses is also made simple through accounting software as it will remind you to mark the finance charges.
Recording invoices manually or on an Excel sheet frequently result in a wreckage. SMEs mostly complain that it is inconvenient to manually keep up to date with the invoicing, payments, reinvoicing and late payments of the clients. Another grievance is that since mistakes are continuously piling up, they are not able to collect all the money their clients owe them. On the other hand, an accounting software lets you fully take control of all your finances. It reduces human errors and systematizes invoicing along with other dues for instance, the late fee. Besides, it also notifies SME owners regarding their due income. In this way, all late payments are also followed and not a single payment is overlooked.
Keeping tabs on your business expenses seems painless; though it is an exhausting task. There is a lot to miss out; things purchased on cash, missing receipts, undocumented purchases, vague credit card bills and many other. Here, the accounting software performs its job. It not only tracks your business finances for the purpose of taxes but also for the purpose of financial alertness. You cannot tell if your business is doing financially well when there isn’t any precise expenditure tracking system installed.
“Kindly send a copy of the tax returns for the last 5 years.” You are obligated to provide the required documents when you get these kinds of inquiries form the federal, state or even local revenue agency. However, if you are working manually, you’ll most probably be lacking the preceding year documents. In contrast, an accounting software manages your business chronicle. It holds the entire financial history providing accurate records whenever required.
In a manual setting, client’s aging and history reports are not present and so, at times you forget their payment habits. Yet, the invoicing feature in the accounting software lets you check the payment conducts and buying history of your client. It also generates aging reports to ease the collection work.
If you are planning to grow your business, open a new branch or buildup a new team, the readiness of all required financial records is imperative. Lack of financial history will become a hurdle in expanding your small business. Thus, an accounting software will never disappoint you in this regard. It will provide you with all the required financial records anywhere anytime without any disruption.