Most businesses use some form of accounting software. Even if they pay a separate firm to handle their finances, they need records of their own. Not all accounting software is created equally, however, and many businesses don’t understand the importance of investing in superior software products. We’ve created a succinct list of good accounting software’s most important and overlooked benefits.
Increased Potential for Profit
Accounting software revolves around order. You use a pre-organized system to store valuable information in a way that makes sense and is easy to retrieve. Those advantages carry over into how you use that data, especially since the best accounting software programs offer additional features. This superior organization serves to give owners and upper management a superior view of the business.
Armed with this advanced insight, it’s easier to spot opportunities before they vanish. Businesses can focus on their highest-paying and most loyal customers’ needs, and even predict many of those needs, by examining individual customer records. It’s also easy to spot items that need frequent reordering, indicating that they sell quickly. There are dozens of little ways your software can serve as a rudimentary BI tool. Every single one of these analysis techniques offers considerable potential for profit.
More Efficient Loss Prevention
Just as this software can increase a business’s potential profit, it can also help identify problem areas before they grow out of control. It’s a practical measure with huge possible benefits. For example, it’s easy to use your accounting software’s built-in report and graph presentations to figure out how and where your businesses is losing money. If income is the same from one month to the next, but there is notably less take-home profit at the end of the second month, solving the issue that caused the anomaly immediately could save thousands over the months to come. Your accounting software can also help you buy merchandise more efficiently. This is especially important for peak sales seasons. The best decisions are based on data from previous years. This helps avoid costly left-over seasonal gear that must be sold at a discount later on.
Labor efficiency is a commonly acknowledged, but underappreciated, aspect of good accounting software. These costs represent one of the biggest investments a business can make, and while it’s impossible for a business to grow without increasing the number of employees, every hour counts. When it comes time for daily, weekly, or monthly finance work, the highest ranking employees are typically the ones to do the work. Not only do these employees make more per hour, but they also have more work. Their varied responsibilities require advanced multi-tasking capabilities on a slow day. Throwing in an additional, detail-oriented task like bookkeeping or accounting is often the straw that breaks the camel’s back. Great employees often feel overworked and unqualified when told to handle finances. This prompts many to leave, even if that means taking a lower position somewhere else.
Between the added cost of the labor itself and the additional costs of increased turnover among high-ranking employees, it’s essential to keep regular financial work as simple as possible. Good accounting software does most of the work for you. Systems like QuickBooks feature a drove of automated features that make it easy for even a beginner to generate reports, review payroll, and ensure numbers are accurate. These kinds of tools empower employees and lighten their workload. It’s an invaluable combination.
Loan Applications Simplified
Most businesses will need to take out at least one loan in addition to startup loans. When opportunities to expand appear, businesses have to make decisions quickly. This often means borrowing based on the potential for increased future income. Banks and lenders, however, only offer loans to businesses with clear records that support claims that the business can pay back the loan, no matter how their new venture turns out. Having those records ready is a huge advantage for any business in need of additional capital. Adding summaries and reports through built-in feature in your accounting software improves your chances even more.
No one wants to discuss taxes, but they are one of the most important reasons businesses should invest in good accounting software. It’s impossible to keep track of income, expenses, labor credits, etc. without some help. Some of the best accounting and bookkeeping programs on the market actually help you file taxes through built-in filing systems and free copies of necessary paperwork. This gives your business a safety net in case anything goes wrong, and it offers immediate labor savings.
Good accounting software can make a huge difference in your profit and loss margins. These programs help you keep your best talent, avoid costly mistakes, and even file your taxes. Investing in such a program isn’t a luxury for a growing business. It’s a matter of building your future on the best possible foundation.