• Accounting software stores a business’s financial data and does a variety of bookkeeping and accounting tasks. 
• Accounting software can save you 27 days worth of extra work a year.
• Most accounting software range between $9 to $25 a month.

It’s easy to get stuck in your ways about running a business. Primarily if you or your family have been operating the business for decades, you get into the flow of things, and the status quo seems to be doing just fine. But, the truth is time, and the development of technology is never stagnant. The failure to adapt how you run your business could be the company’s eventual downfall, whether a local mom and pop shop investing in an EFTPOS reader or investing in a website. Using technology will help you run your business more efficiently or even expand.

This is the case when it comes to implementing accounting software. It takes so much time to track down invoices and expenses, log data manually, and shuffle through the books. 

It’s probably not what you imagined when you wanted to start your business. 

The great news is, this doesn’t have to be your reality anymore. 

Common accounting pitfalls for small businesses

The biggest trap most small businesses face is related to managing their financial situation. Whether it’s:

1. Keeping track of cash flow
2. Preparing for an unexpected disaster or expense
3. Taking advantage of tax deductions
4. Properly overseeing payroll 
5. Accounting for expenses
6. Closing or balancing books
7. Making proper decisions from incorrect financial data

Business accounting can be complex and time-consuming, and small business owners may struggle to answer critical questions like, “Is my business making a profit?” and “Am I making the required tax payments?” But fortunately, these are all problems that can be alleviated by using accounting software tools. Not only that, but they’re straightforward to use and provide extra benefits compared to manually accounting yourself.

What is accounting software?

Accounting software stores a business’s financial data and does a variety of bookkeeping and accounting tasks. It is also used to perform various business transactions. 

What functions do accounting software perform?

Accounting software can perform many roles for a business, this includes:

• Invoicing
• Payroll
• Bill payment 
• Monitor account balances
• Purchase orders
• Manage vendor/customer contacts 

What are the seven major benefits of using accounting software?

Accounting software has many benefits, including:

1. Saving yourself time
2. Instant access to key financial reports
3. More accurate data
4. Simplifies your invoicing and payroll process
5.  Reduces paperwork
6. Reduces overall costs and saves money
7. It makes filing taxes easy

The beauty of accounting software applications is that they’re flexible and adapt to your business’s needs. 

1. Saving yourself time

Did you know that using accounting software can save you 27 days worth of extra work a year?

After the upfront time of setting up your new accounting software system, you’ll save yourself hours of work each week, which will save you days of work each month and weeks of work each year. The old school method of manual bookkeeping on paper or Excel sheets takes time you could be spending growing your business and/or relaxing with loved ones. Performing actions like creating individual invoices for each sale, logging journal entries, and downloading CSV files from your accounts can all be done automatically by accounting software. While every other benefit on this list will eventually save you time, it’s essential to bring this up because it’s the most powerful benefit accounting software can provide. 

2. Instant access to key financial reports

With the old school method of accounting, you would turn in your statements, books, and all other financial records to your local accountant, who would take days or possibly weeks to parse through all the information and provide a Balance Sheet, Income or Cash Flow Statement. With accounting software, you’ll receive all of that information instantly with a click of a button.  

3. More accurate data

Not only do you receive financial reports instantly, but they’re guaranteed to be more accurate. That’s because accounting software removes the possibility of human error. No more having to worry about manually updating multiple cells in complicated sheets or having to waste hours trying to figure out why your balance sheet is off. You will be notified instantly when new entries don’t balance, and potential errors you might have made will be highlighted. 

4. Simplifies your invoicing and payroll process

As previously mentioned, accounting software will help save you time by automatically producing invoices; it automates the payroll process. Accounting software makes payroll easy by allowing you to automate payments, estimate healthcare and insurance, and receive accurate employee payroll tax information.

5. Reduces paperwork

There’s a reason many people and businesses are switching to online invoices, e-vites, and receiving bills online; because it saves paper. Reducing paperwork is environmentally friendly, cheaper, and reduces time spent on filling out paperwork. Accounting software helps reduce paper usage by allowing you to keep track of entries, produce statements, invoice, and generate reports all online.

6. Reduces overall costs and saves money

We’ve already spoken about some of the ways accounting software can save you time, but what about saving you money? Well, time is money, as they say, but other benefits like reducing paper, receiving more accurate information, and not having to revisit accounting issues all save you money. The more efficiently you run your business, the more money you will ultimately save. 

7. It makes filing taxes easy

Accounting software doesn’t only make it easy to manage your business but also handle your taxes. It does this by keeping data exact and up-to-date, so finding the required documents and information is a breeze. Some accounting software also has built-in compliance rules for various countries to give accurate estimations on rates.

What is the best accounting software for small businesses?

When deciding on which accounting software is best for you, there are so many options. 

It could be overwhelming!

I recommend checking out our guide for the best accounting software available for small businesses in 2022. In it, you’ll find reliable software like: 

• Xero
• Quickbooks
• Reckon
• MYOB
• Saasu
• ePayroll
• OskoPayment 
• Sage 
• Moneyworks Express

Depending on the features and packages you choose, accounting software can range from $9/month to $25/month. This may seem like an extra expense but will save you ten-fold in money and time spent balancing your books. 

There are plenty of great online accounting software options to help you do that job. You can learn more here in our accounting group.