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Why do businesses need accounting software?

Johannesburg, 05 May 2023

Imagine for a minute you’re sending e-mails, paying vendors, issuing invoices, designing processes and creating financial reports as the owner of a small company. Doesn't it seem hectic? It will not only put a burden on you, but also make you extremely annoyed. Accounting is one of the many additional responsibilities that company owners must shoulder. If accounting is not done accurately, it can destroy the overall productivity of the company. It can lead to the demise of a company or legal difficulties with the Internal Revenue Service.

Small company solutions in the field of accounting have made it simpler to delegate work to computers. These accounting resources provide company owners with the information they need to keep tabs on cashflow, manage expenses, file and pay taxes and more.

Find out all that accounting software performs and why it's crucial for small companies with this comprehensive press release.

Why is accounting software useful for small businesses?

The current era is one of automation. We see automated systems in most sectors like crypto-currency trading bots such as Bitcoin Profit do all trading tasks on the behalf of their traders. Similarly, automated accounting systems are crucial for businesses. Most entrepreneurs know firsthand that keeping track of the company's money is more difficult than it seems. If you let your books go for even a few days without updating them, you'll be in for a huge pile of work. For entrepreneurs, using accounting software may be a huge time-saver. Rather than carrying out each task individually, you may set many of them to run automatically. According to statistics compiled by the accounting software industry, over 75% of accounting duties are amenable to computerisation.

In addition to being functional, most programs also offer user-friendly interfaces that make even tedious activities like accounting a breeze. Similarly, bookkeeping software and accounting software are often misunderstood.

Seven benefits of using accounting software

If you keep track of your company's money by filing away receipts and invoices in shoeboxes or using Excel spreadsheets, you're leaving yourself open to errors and theft. However, this may be remedied by implementing a suitable accounting system, which can provide you with an accurate and up-to-date computerised accounting file that is of paramount importance at tax time. The following are some explanations for the question: "Why is accounting software useful?"

1. Replaces manual labour with automation

It takes a lot of time to enter data. When using an automatic payment plan with common accounting software, you'll only need to input a customer's details once. Payment and purchase information is stored for future use. If payments are automatically collected when they are due, you won't have to do anything additional to be paid. Invoices and payments may be easily located and retrieved and reports on each member's vendor history and ageing are provided. You don't have to enter each transaction into the system, since the system automatically stores the whole history of each one. This removes the need for manual data entry, which not only saves time but also reduces the likelihood of mistakes. To make entering a month's worth of transactions simpler, several financial institutions now provide direct downloads of customer bank accounts.

2. Useful for filing your taxes

It's not hard to keep accurate financial records with a strong accounting system in place; all you have to do is record your purchases and deposits. By easily assembling and exporting papers and invoices to your accountant, you can remain on top of your finances. Maintaining orderly records also facilitates the work of your accountant when tax time rolls around. Some programs even automatically structure invoices with tax office guidelines, saving you time and stress at tax time. As an added bonus, having audit-proof books means the Internal Revenue Service auditors can quickly verify that the software's records match the bank statements.

3. Provides digital reports

In today's digital age, printed documents are mostly obsolete. Technology today facilitates a wide variety of operations. The necessity of staying ahead of the competition is highlighted by the fact that 70% of corporate software interactions will occur via mobile devices by 2022. E-mailing an electronic invoice to a client is quick and easy for everyone involved. It is much simpler and quicker to collect money from customers when they can do so with just a few clicks. These days, it's common for accounting software to be compatible with a wide range of payment methods.

4. Controls cashflow

When you're in charge of a company, you'll see a net inflow and outflow of cash and cash equivalents. Without an accounting program, you may have to devote valuable time to spending iterating through many contact lists, files and Excel sheets while you keep track of all the transactions necessary to pay and get paid. You can be confident that no important financial transaction will be missed thanks to the software's ability to monitor things like incoming cash, invoices and late payments. Instead of merely writing cheques when they're due, an accounts payable system records invoices as they come in, allowing you to manage and anticipate future cashflows. It's impossible to gauge your company's success without official financial documents like balance sheets and P&Ls.

5. Makes calculations automatically

Accuracy in accounting procedures is essential even if you have a strong mathematical background. Even if you have access to all of your company's financial information, mistakes in editing or calculations may still sneak through and end up costing you time and money to fix. As your company expands, the need for this becomes much more pressing because of the increased number of employees, taxes, invoices and payments that must be managed by certain due dates. Bank reconciliation is also made easier, reducing the likelihood of missing any deductions. FreshBooks is a fantastic example of an accounting application that can do these tasks efficiently. It's a breeze to keep tabs on spending, payments are processed automatically so you are paid quicker and invoicing is slick.

6. It is economical

It is cost-effective to automate your accounting processes. You won't have to pay for a bookkeeper or ask them to stay late at work to process your bills and transactions. Time is money in the corporate world and this optimisation will save a ton of time in the accounting department. In addition, the program offers affordable monthly and yearly subscription plans. If you subscribe to a plan, you can stop worrying about keeping up with the technology and concentrate on operating your company.

7. It's widely accessible

If your accounting data is stored online, you may access it from any device at any time. Problems with money are difficult to ignore, therefore finding a solution quickly is essential. With a cloud-based accounting service, you're not tied down to your workstation or workplace. Even while you're out and about, you may utilise your phone's native applications. Eighty-three percent of customers are happier with their provider when they provide a mobile solution, says Emerging Software.

Try accounting software today!

As a businessperson, you know how critical it is to have up-to-date financial records for the success of any organisation. However, you'll need a method that goes beyond simple spreadsheets if you want to keep accurate books. Accounting software helps manage your invoicing and payments properly, a crucial gear in the wheel where spreadsheets fall short.

With accounting software, you can easily manage your business's expenditure reports without the stress of lost or destroyed paper papers. Spreadsheets also fall short since they don't allow for effective time tracking on projects. You can automatically produce reports, analyse the data and make decisions that will help your company succeed. So, what are you waiting for? Utilise the accounting software for your firm today!