When it comes to running your business, managing your business finances is one of the most important aspects. After all, the status of your finances can be the difference in whether or not your company is successful, as well as whether or not you can qualify for certain loans if necessary. When it comes to business finances, many companies have three options: They can use a finance team of accountants, office managers, and accounts payable/receivable individuals; the business owner can handle the finances himself/herself; or the company can use accounting software.
Some companies opt to use a real person over accounting software because they feel the individual will be more accurate. However, using accounting software for your company’s finances actually has a variety of benefits, including the following:
Connecting to Your Bank
Gone are the days where individual and company expenses have to be manually entered into a system. Instead, most accounting programs will allow you to link your company’s bank account or credit cards to the program, enabling the transactions to be uploaded into the system in real time. This way, you’ll have an accurate report of your finances without having to wait on certain employees to turn in their expenses accounts. Plus, this real-time link eliminates the possibility of human error when typing in numbers, and this can ensure a more accurate financial statement at all times.
One of the often overlooked aspects of business operations is ‘reconciling the books’. Just like balancing your checkbook in the 90’s, reconciliation is the process of determining all outstanding receivables (clients that haven’t paid you yet), and payables (vendors you owe money to). The value in this type of reporting allows business owners the opportunity to determine operating cash flow. This is an extremely valuable number for businesses large and small. Not solely because it can determine rolling or seasonal profit margins, but it is ALSO a number greatly valued by banks when determining loan status and rates. The same goes with Venture Capitalists looking into invest in either a debt or equity play.
There are a variety of different financial reports you company may need over time, and an accounting program allows you to have access to all of these reports immediately. These programs are created to generate any type of report you need, whether creating a P&L assessment or a graph of individual employees’ (or team’s) expenses.
Paying your vendors is an essential part of running a business, and an accounting program can simplify this process. With accounting programs, you can set up vendors in the system and allow all vendor-related information to fall into their file. You can submit payments through the software too, and this can provide information on when the check was cut, what number check was used, how much it was for, what invoice it was attached to, and even when it was delivered and/or cashed. This makes it much easier to streamline payment processes to vendors or look up certain vendor information.
Accounting programs simply customer billing
Receiving payments from customers is important to your company’s financial success, and accounting software can streamline this process too, just like with vendors. The program will keep detailed information about the customers and their payment history, and you can even access which customers may be late with their payments. Through the program, you can set up reminders or mail out invoices too, which can help ensure that customers pay you for the right services at the right time.
Risk of Audit
Being audited is never an enjoyable experience, but using accounting software can eliminate your company’s risk of being audited. With a properly updated accounting SaaS, your books will be updated in real time with minimal opportunity for error. Audits tend to be quicker and run more smoothly, and this is what every business owner wants when it comes to digging into company financials.Combined with endless reporting tools, this gives a business owner the opportunity to find errors, or miscalculations, prior to being sent over to a CPA.