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Small business accounting can often be a headache. Business expenses occur every day, and if you are clueless about your daily expenditures, you could find yourself lacking cash flow. One of the most integral parts of running a successful small business is understanding your income and expenses. Accounting software can take the burden and time of manually managing finances that you could easily automate. If you are asking yourself, do I need accounting software for my small business? The following questions will help you decide whether accounting software will be beneficial to your small business.

Why is it important to track income and expenses?

Outlining your forecast income and expenses helps you manage your cash flow when starting and running your business. Tracking expenses can assist you in determining expenses that are unnecessary and reallocate them to areas where your return on investment will be greater. Not only does tracking expenditures keep you financially responsible, but it can also help you track your progress towards your financial goals.

Ultimately, tracking your income and expenses gives you all the information you need to make better decisions. This is owed to the concrete figures that you can base your business decisions on. This is especially critical when it’s time to file for taxes, as you’ll want to make as many tax deductions as possible.

Accounting software can help your small business significantly streamline billing and accounting. It allows you to get an idea of how your business is performing financially at a glance, and gain valuable insight into your business’s growth. This will, in turn, enable you to make improvements if the business isn’t growing as anticipated.

Are You Spending Valuable Time On Repetitive, Manual Tasks?

Do I Need Accounting Software For My Small Business? Q&A

As a small business owner, you are expected to juggle a plethora of conflicting priorities each day. Without a doubt, accounting tasks are time-consuming and tedious, which is likely to take up a large portion of your day. Over time, if you rely solely on spreadsheets, you may find it difficult to input an increasing volume of data efficiently. You will need to be highly competent in spreadsheet commands and formulas to acquire data insights. This may make it difficult to analyse your financial position to effectively make business decisions.

Accounting software can take the burden off small business owners and free up time to spend on other high-value tasks. It reduces redundant data entry and saves time on flicking through spreadsheets, contact lists and files.

Do You Lack Technical Accounting Skills, But Are In Charge of Finances?

People make mistakes. There is a multitude of things that could go wrong when small businesses track expenses by hand. These include categorising expenses wrong, choosing the wrong date, inputting the incorrect amounts etc. These mistakes can be heightened if you lack a strong understanding of accounting principles.

A lack of financial literacy is a common problem small business owners face. If you aren’t comfortable tackling accounting and bookkeeping, accounting software can help you better navigate these challenges.

Does the Accounting Software Have All Necessary Features?

Accounting software is meant to make your life easier, not harder. Therefore, when deciding on accounting software, you want it to have all features and automation necessary to do what you need. The following are features that your business might need:

  • Multiuser Access
  • Expense Tracking
  • Receipt Scanning
  • Invoicing
  • Recurring invoicing
  • Multi-business Support
  • Contact Management
  • Separate personal and business expenses
  • Bank Reconciliation
  • Time Tracking
  • Job Costing
  • Manage Bills
  • Payroll
  • Budgeting
  • Multi-currency
  • Multi-language
  • Mobile App Access

Is the Accounting Software Cloud-capable?

One important factor when considering accounting software is whether it is cloud-capable. Traditionally, businesses would locally install accounting software onto their office PC, and you could only use it there. However, the emergence of cloud-capable software now allows you to access your business’s financial data instantly anywhere and on any browser or device.

Cloud-capable accounting software is clearly the more flexible option. The most helpful feature being is that it grants mobility for small business owners. Most cloud-based accounting software allows multiple users to access the software simultaneously from different locations. To sweeten the deal, most cloud-based accounting providers take care of the security of your data for you (e.g. firewalls, data intrusion detection, data encryption).

Is There Room to Grow?

Excel spreadsheets may be useful when you are first launching your business. However, once your operations continue, you may find it difficult to keep up. Implementing accounting software will ensure you aren’t overwhelmed when your business begins to expand rapidly. Streamlining your data input for billing and accounting can give you the confidence that your system can handle your future expansion. Importantly, you need to consider whether the accounting software has the capacity to grow with you and offers added features and requirements necessary for scaling. The last thing you want is to be held back by the software.

What is the Pricing Model?

When deciding on accounting software, you will need to take a close look at your operating budget. Accounting software may be unfeasible if you can only cover the accounting package cost for half of a fiscal year.

Depending on the software and features you are considering, accounting software can add up to a hefty sum. The more features you are looking for, generally, the more expensive they are. Also, keep in mind that many accounting software packages require you also to purchase support packages. Nevertheless, most accounting software providers offer a variety of plans to accommodate your budget and needs.

Small businesses with a tight operational budget may opt for free accounting software. However, be mindful that free accounting software may not give you access to all comprehensive features and tools you require for your business (e.g. more users, multi-currency).

Does the accounting software come with a free trial?

Most desktop or online accounting software’s today offer a free trial before you make the final purchase. Small business owners should take advantage of the free trial period to decipher whether the accounting software is easy to use and suited to your business needs.

During the free trial period, these are some questions you should keep in mind:

  • Is the navigation intuitive?
  • Can I easily understand the interface?
  • Is the software intuitive and simple enough to perform common tasks (e.g. record payments, create invoices, quotes/estimates, expense tracking, manage bills, time tracking, budgeting)?
  • Are there user guides or video walkthroughs for key features?
  • What types of tech support or customer service is provided?

Before you purchase accounting software, use the free trial and consider the questions we addressed above. Choosing accounting software for your small business takes time and money to find a solution that suits your businesses need’s and budget. Your decision should be based on its overall affordability, scalability and flexibility.

Need guidance on the growth of your small business? Here at BUSINESSNAV, our business advisors offer accounts processing that can assist you in effectively managing the growth of your business. Leave any questions or queries below: