How is your business managing its finances? If you’re still using folders and spreadsheets, it’s time to revamp your approach.
An accounting software package streamlines all your accounting processes, making it easier to stay on top of your finances. It provides a central platform for financial management; helping you track your cash flow and see your financial position in real-time. By improving the speed and accuracy of your accounting tasks, it also saves your business time and money.
Cloud-based accounting software like Xero and MYOB facilitates a wide range of tasks including paying bills; quoting; issuing invoices; accepting payments; recording transactions; bank reconciliation; filing tax returns; claiming and categorising expenses; managing payroll; tracking projects; filing financial documents; managing customer and supplier contracts; tracking inventory and more.
Here are seven reasons why you should use accounting software.
1. Save time and cut costs
Manual accounting systems are complex and time consuming. Accounting software helps you move away from repetitive tasks by digitising and automating processes. This not only increases efficiency but reduces bookkeeping and accounting expenses.
Capture and auto-fill data
Easily extract key financial data from bills and receipts just by uploading a photo, email or document. The software automatically captures all the usable data and creates a draft transaction, without any data entry on your end.
Connect your bank accounts for real-time updates on transactions and balances. Sales and income data will flow directly from your bank to your books. The software will even suggest, match and categorise transactions. No more spending hours transcribing bank transactions and ensuring bank reconciliation. Automatic bank feeds enable you to reconcile daily, ensuring your accounts reflect an accurate and updated picture of your finances.
Accounting software can also help you get paid faster by connecting with online payment platforms. Tools like Xero allow you to add a ‘Pay Now’ button to your online invoices and view when they are opened, making it easier to track payments and pricing. You can also set up automatic recurring payments to ensure you never miss a payment.
2. Increase accuracy
Improve data quality
Manual processing leaves lots of room for human error. Automation reduces the chances of double handling and mistakes, which can be costly for your business. Accounting software makes it easier to track and double-check data entries, playing a crucial role in maintaining data quality and accuracy.
Traditional solutions are expensive and complicated to upgrade. With cloud-based software, updates occur quickly and automatically. You get instant access to new and latest features without having to constantly check that you’re installing or using the latest version.
3. High-level security
Data encryption and multi-layer security
Financial records contain highly confidential information – from income and expenses to assets and liabilities. To maintain the security and privacy of your personal and financial information, your accounting software encrypts all your data in the same way as online banking. Online accounting software adheres to the strictest security standards by using bank-grade encryption protocols and multiple layers of security to protect your data.
Secure data storage
Your data is stored in the cloud and offsite on secure servers which are monitored 24/7/365. It will also be backed up automatically, reducing the risk of losing any important information.
The cloud is one of the most secure ways to store data. If your laptop is stolen, it will be impossible for anyone else to access your data unless they have your account login details. If your computer or hard drive gets damaged, there will be no downtime, data loss or impact on productivity.
Outdated methods of sending confidential data in emails or USBs are not secure or reliable. Cloud-based accounting software allows you to increase accessibility to data while mitigating security risks.
4. Increase flexibility
With your data stored securely online, you can access your accounts anytime, anywhere. This inventory management gives you the flexibility to run your business from any location. As long as you have access to the internet, you can always get an up-to-date view of how your business is doing.
Multi-user access makes it easy to collaborate with your team and advisors. Grant key people access to financial and customer details, while controlling the level of access for each user. You can have different team members working simultaneously on your accounts in real-time.
Integration opportunities for increased functionality
Most accounting programs have hundreds of third-party integrations to suit your specific business needs. Link your accounts with payroll providers, employee management programs, credit risk management solutions and more. Expand your management capabilities by leveraging these integrations for other parts of your business.
5. Improve due diligence and minimise credit risk
Integrate with CreditorWatch
CreditorWatch integrates seamlessly with accounting software like Xero and MYOB. Gain a deeper understanding of your customers and proactively mitigate credit risk directly from your accounting dashboard.
This integration enables you to streamline credit management processes by matching your customers’ details to their credit reports. Through streamlining processes you are able to stay on top of all your debtors by automating credit checks for new customers and monitoring existing customers. This workflow allows you to receive instant alerts about any changes and view adverse information that could impact your cash flow. Analyse outstanding debtors in your ledger and easily identify those that pose the highest risk to your business.
CreditorWatch also cleans up your customer records by identifying and verifying their ABNs. By connecting both systems, you enrich your credit reports with additional data and benefit from more in-depth reports.
6. Simplify tax and GST filing
Generate reports and BAS
Accounting software makes tax time less painful, eliminating the need to sift through hundreds of sheets to extract details. With all your financial information in one location, it is easy to generate reports and prepare your business activity statements (BAS).
Calculate tax and GST
Your accounting software automatically calculates your GST as you go, while prefilling your BAS. Track and manage your GST by viewing all your transaction details and making adjustments as required. Effortlessly prepare accurate business statements and file your GST returns.
It is also simple to create, authorise and pay your employees’ superannuation. Software solutions and tools like MYOB prepare monthly ATO declarations and send your super contributions directly to the ATO, ensuring you comply with Superstream requirements.
By connecting with the ATO, your accounting software ensures you’re on top of all your tax obligations. Stay compliant by creating PAYG, GST and BAS reports and sending them directly to the ATO. Speed up the tedious process of lodging tax returns and track the status of your submissions.
7. Quick financial overview and business insights
Your accounting program helps you accurately understand the latest state of your finances, empowering you to make more informed business decisions. Get a clear overview by customising your dashboard to display key information like cash flow and sales.
You don’t need an accounting background to gain powerful financial insights. By using the right accounting software you are able to quickly generate reports and financial statements including profit and loss statements and balance sheets. The accounting tools assist you to compare metrics to analyse business growth and trends; use analytics to create budgets and forecasts. Your accounting software can help you maintain better control of your finances, find accounting solutions and plan for the future.