Your business or non-profit is thriving, and you’re finding yourself overwhelmed with staying on top of bills, expenses, invoicing, and more. Balancing your books and keeping track of your finances is a full-time job, especially when things are going well. If you’re still using the same old Excel spreadsheet and it’s just not cutting it, then it may be time to switch to accounting software.
In this article, we talk about why businesses or non-profits need accounting software and how you can benefit from them. You’ll also learn how it works and the functions you need.
Why You Need Accounting Software
As a business owner or a non-profit executive director, you have a lot of responsibilities to manage at any given time. These responsibilities can range from the need for supplies, managing employees, and even ordering lunch. Because things get so hectic, you may end up overlooking the need for a sound accounting system. Here are some of the reasons why it’s important:
Helps Track Accounts
An accounting system can help you with the ongoing tracking of expenses and revenues. Having a system will prevent you from cramming to meet tax deadlines.
Gives You an Accurate Account
By keeping up-to-date records, you get an accurate snapshot of the financial position of your organization. You can easily spot a cash flow gap or a client behind on their payments and do something about it immediately. It’s important to know what’s going on with your organization at all times so that you can make the best decisions for your organization.
Helps You Prepare for Tax Season
Your accounting software helps with tax compliance because you can easily print reports showing how much tax you owe for a specific period. Not only that, but most software also keeps track of the tax payable per invoice and prints directly on the tax forms. That way, you can file the necessary government tax forms on time.
Financial Reporting and Tracking
Keeping your financial records updated in an accounting software will enable you to use financial reporting tools to provide you with a balance sheet, profit and loss statement, and statement of cash flow to help you see if you are meeting your financial goals.
How Organizations Benefit from Using Accounting Software
You already know why you should use accounting software, so your next question may be just how your organization can benefit from it. Here are some of the main reasons:
Fewer Mistakes
Some calculation errors have little impact on your organization’s financials, and you can address them in the coming quarter, but others could misrepresent the actual state of your business. When using accounting software, you can expect higher accuracy and a lower likelihood of human errors since you can quickly see if something doesn’t add up.
Data Backup on Accounting Software Portals
Accounting software must comply with the General Data Protection Regulation (GDPR) guidelines, be backed up regularly, and use data encryption to ensure the security of your financial records.
Helps Business Owners Scale by Saving Time
This software also helps reduce the workload of your accounting staff, especially if your entity is scaling up quickly. It makes data entry easier and handles heavy calculations, giving your employees more time to focus on more important tasks.
Many accounting systems have advanced features. For example, cloud-based solutions allow multi-location employees to access your data anywhere and anytime online.
Can Be Industry-Specific
Accounting processes vary depending on the business. You can choose among various industry categories like non-profits, small businesses, restaurants, and construction, among others. General accounting software needs to be set up to suit your business, but industry-specific software already has pre-set templates to help you.
Functions You Must Have in an Accounting Software
At the very least, your chosen accounting software must be capable of doing the following:
- Invoicing
- Accounts Receivable
- Accounts Payable
- Credit Card and Bank Synchronization
- Online Collection of Customer Payments
- Financial Statement Preparation
- User Access for Accountants or Tax Professionals
How Accounting Software Works
Typically, accounting software syncs with your company’s credit cards and bank accounts. The software then queues the transactions so that you can classify them based on your chart of accounts. After putting them in their correct categories, you can use them to populate your financial statements. If you want to print a financial report, you can do so in a matter of seconds.
This software also allows you to review your profitability, check loan and bank balances, compare income and expenses, and estimate tax liabilities. These days, most software types can easily integrate with third-party applications. You can connect it with your accounting software if you use a point-of-sale (POS) system for your sales transactions. If you are a service company, some will even allow you to connect a time-tracking app to monitor your billings.
Ready to Dive in?
Accounting has always been a tedious process, especially for busy organizations. However, you can do away with many of the manual routine-based accounting tasks with the help of your accounting software. Instead of spending your precious time balancing accounts, you can rely on it to do the job.
When you want expert assistance when deciding on accounting software, you can contact us at LTD Global. Small businesses, government agencies, and non-profit organizations have relied on us for their administrative, accounting, and human resource requirements for over the 20 years of our existence in the industry. We’ve got your back!
Sources:
Best Accounting Software for Small Business, Investopedia.com
https://www.investopedia.com/best-accounting-software-for-small-business-5069679
Advantages of Using Small Business Accounting Software, TheBalancesSMB.com
https://www.thebalancesmb.com/accounting-software-advantages-2947882