If a small business or a new start up, business owners often start by using a spreadsheet to record all their basic financial transactions.
So when is the right time for you to take it a step further and invest in a better way of managing the finances in your business?
I guess only you know that – depending on how long you’ve had your business, the volume of transactions you have and the type of business your operate. Are you planning on continuing to do your own bookkeeping or are you intending to outsource it to free up your time to do other things in your business? These are all important considerations.
Here are some very good reasons which may just persuade you to ditch the spreadsheet and get yourself a user friendly cloud based bookkeeping software.
Reason1: Put the foundations in place for growth
If growing your business, then you also need to put in place the infrastructure and systems to support it. If you know that you are going to have a lot more customers and suppliers, be doing a lot more sales and have staff working with you then doesn’t it make sense right now to start to put in place a proper bookkeeping system which can grow with you?
Reason2: Easier to monitor and manage your finances
Using a bookkeeping software, when you have input the transactions and reconciled everything, you can generate user friendly reports which tell you how your business is performing and whether you are making a profit or not. You can analyse your financial information and use it to make informed decisions in your business. It is so much easier to do this on a bookkeeping software than a spreadsheet.
You can put budgets into your software and then compare your actuals with your original budget.
If you have key performance indicators for your business, you can use the software to help you measure whether you are achieving them.
You can use the software to chase your customers for payment – generating email statements and reminders. You can also use it also to inform you which of your suppliers you still need to pay.
Reason 3: Saving time with streamlined ways of working
Here are just a few examples;
If you are raising your invoices on a Word document, you will save loads of time by raising these in a bookkeeping software instead. If you raise your invoices in another system, as long as you can export them in an excel format, you will probably be able to import them into your bookkeeping software which saves duplication of input.
Scanning your documents into the bookkeeping software or via another software such as Receiptbank, means you can go paperless as all your documents will be stored in your software. This is a great way to work and saves you hunting through files for particular documents.
Automatic bank feeds which pull through the transactions itemised on your bank statement, making your bank reconciliation so much quicker.
Reason 4: Enabling others to support you
Cloud based softwares enable you and others (that you give permission to) to access your account from any location.
You can therefore let your bookkeeper and accountant access your accounts via your bookkeeping software so they can help you run your business.
You can outsource with complete confidence as you can let someone else do the work (freeing up your time) but still be able to see the data and keep complete control of your finances.
Reason 5: You can do so much more than basic record keeping
Here are just some examples of the tasks you can carry out using your bookkeeping software (in addition to your bookkeeping);
- Calculation and submission of VAT returns
- Credit control
- Maintenance of your customer and supplier data all in one place
- Running your payroll
What is more interesting is that many of the software providers have add on partners which are other companies whose software will integrate with your data in Xero to make you even more efficient with your time. For example, cashflow forecasting, stock management, CRM systems, Credit card and DD payment companies. So the sky is the limit!
Have I managed to persuade you to consider this? Have a look around at the various bookkeeping softwares out there – e.g. Xero, Kashflow, Quickbooks and sign up for one of their free trials and have a go and see what you can do with it to help your business.