If you’re a small business owner, you know the importance of keeping accurate and organized financial records. Just a generation ago, this detailed and specialized work required the hiring of professional bookkeepers and accountants, which often proved prohibitively expensive. Now, even the smallest micro-business can leverage the power of professional-grade accounting software tools. There are several desktop accounting and bookkeeping software solutions from big-name companies like Intuit and Microsoft, but many small businesses are now turning to web-based accounting software applications for their ease of use and cost-effective results. The accounting software solution that you choose will depend both on your business needs and your preferences regarding the sliding scale from maximum interface simplicity to maximum features and power. The right accounting software can be a great boon to your business in a variety of ways.
First, a good accounting software solution can help you finance the growth of your business. Growth inevitably requires purchases, but each purchase must be managed so that you can retain sufficient capital to manage the daily operations of your business. The right software can make your “go/ no-go” decisions on capital expenditures much easier by elucidating the effects these decisions will have on your company’s daily expenses and overall financial situation.
Some accounting software solutions can automate common tasks, including payroll. In order to avoid delays or fines, small businesses must file PAYE (pay as you earn) employer forms, including the P35, P34, and P11D forms. With the right accounting software, these manual payroll processes are eliminated, making managing payroll much easier, less time-consuming, and significantly less expensive.
Proper cash flow management is critical to the success of any small business, and this is one area in which accounting software can be a lifesaver. Knowing whether your business is in a strong or weak cash position at any given time allows you to make the best decisions in the moment. When the business is in a strong cash position, you can pursue opportunities and incentives that require liquidity. When its cash position is weakened, you’ll know to protect your interests. Knowing whether to lease or buy property, retail space, and equipment are key decisions that will most likely come down to an analysis of your cash position. When you have greater visibility on incoming and outgoing payments and expense tracking, you can make confident and intelligent calls.
Finally, accounting software should help simplify invoicing and bill management by managing receivables in real time. Modern systems eliminate manual invoicing, relying instead on automation to provide advanced warning when invoices are approaching terms. Best of all, many small business accounting software solutions can do all of this for very little money, and some are even free.