This is sponsored content for Wave Financial.
In today's modern world, most businesses can scale globally because of the Internet, as well as the prevalence of tools that are built for efficiency while catering to a large consumer base. Some of the best software programs you should invest in to streamline your processes is accounting tools.
You may be thinking that you don't need to spend money on this type of software program because your company is still in its early stages. However, if you have plans to expand your enterprise internationally, you must develop a semi-automated accounting process right at the start of your venture. This way, you won't have a difficult time when you gain more customers in the future.
If you're still unconvinced, here are the benefits of using accounting apps for your business:
1. Centralised management system
Companies, like Wave, aim to deliver a product that will store and manage all accounting-related data for your business. Investing in this type of software program helps you and your team find the information you want when you need it. This factor is essential as your accounting department expands to make sure there won't be any hindrance to collaboration between employees and divisions.
As a growing company, you may be looking at free tools that you can download and use without additional costs. While you can certainly find them easily online, you'll likely need to utilise several apps or programs for different processes.
It's better to buy dedicated accounting software outright so that you'll have a centralised management system right at the beginning of your enterprise. Moreover, if the app you decide to buy has scalability features, it can grow with your company, and you won't need to purchase another program. You actually save money when you think about it.
2. Decreased human error factor
When you or your accountant does accounting manually, you increase the chances of errors in your financial statements and other similar documents. This poses a significant problem to the success of your business because you won't be able to make wise decisions and forecasts on your company's future if you don't have accurate details on its revenue and expenditures.
This tool helps you calculate material costs, overhead charges, and salaries instantaneously, as well as accurately. It's particularly valuable now for taxes because Australians who are currently working in their homes can claim an allowance of 80 cents an hour on their next tax return.
Most people have been working remotely due to the coronavirus pandemic. If you've employed the same arrangement, you'll need to register and modify the accounts of every single employee. This task can be made more straightforward and convenient by an accounting app.
Here are some tips to reduce accounting mistakes in your company:
- Update your books regularly - Make sure that your accounting books are updated regularly so that you always know exactly how much money you have. If you put off doing this task, you risk committing errors of omission, and you might eventually forget some transactions, which can affect the accuracy of your financial statements.
- Practice proper documentation - Always save receipts and other records that pertain to a purchase or sale. If you want to have a clutter-free office, you can opt to scan each document and back it up on the cloud. Most accounting apps have this feature, so you won't have to worry about your files.
- Keep a separate business bank account - A lot of small business owners think that they're saving money and time by merging their personal and business bank accounts. However, you actually risk losing all your funds because you'll be having a hard time tracking your expenses. Keep the accounts separate to reduce the risk of inaccuracies in your books.
- Conduct audits - You should have an audit system in place for all your processes, not just for accounting. This practice is essential for spotting current and potential problems so that you can find a way to minimise losses as your company grows.
- Set budgets - Creating budget plans gives you a reference to check if your finances are still aligned with your business goals. If you don't have a budget, you may end up overspending and losing money on resources that don't generate revenue for your company. Having a budget also guides your purchasing decisions.
3. Cash flow monitoring and management
Cash flow monitoring is crucial for businesses, most especially in their early stages. You have to make sure that you don't spend more than what you earn. If you have an accounting software program, you can easily look at your books and see where your finances stand.
Moreover, most accounting software companies have created mobile apps for their programs. This means that you can access your business's data on-the-go, and even do other accounting-related tasks, such as updating client information and sending invoices.
4. Automated invoicing process
Speaking of invoices, accounting apps can also help you automate the creation and distribution of account payable files. Account payables are some of the most essential aspects of any business. Creating accurate documents and sending them to your clients can help you get paid on-time. Some apps even have automatic notification systems that resend the files to customers if they have failed to settle their pending dues.
5. Easy report generation
Most accounting apps make it straightforward and effortless for you to generate financial reports that you can show to your stakeholders. The software can easily pull up data from your transaction history and compile the numbers into graphs to make it more comprehensible for the reader. The information in these reports are valuable for creating forecasts and checking if your company is going in the right direction.
Accounting apps are useful for both small and large businesses because these serve as a centralised location where your employees can find all accounting-related files. These programs also reduce inaccuracies on your financial statements, which are prone to human errors when done manually.
Through the software, you can monitor and manage your cash flow, as well as your account payables. Lastly, these apps allow you to generate reports based on the past performance of your company so that you can make the right decisions as you move forward.
This is sponsored content for Wave Financial.