How the Right Accounting Software Can Set You Up for Success
Bookkeeping is the process of keeping track of every financial transaction made by a business. Accounting analyzes and reports financial information for the business. Both are a necessary part of operating a business. Don’t buy two different systems to do bookkeeping and accounting. You can use one single software package to do all this for you: QuickBooks Online (QBO).
My favorite feature in QBO is that it links multiple bank accounts and credit cards into their software so that you can categorize transactions as soon as they happen. For example, if you meet a client for coffee that would be categorized as meals, or if you purchase paper that would be categorized as office supplies. By categorizing your transactions throughout the year, you skip that awful step every tax season where you waste hours of your day digging through drawers, boxes, and saved emails trying to locate last year’s receipts. Then once you find them you have to separate them out by category so that your tax accountant can deduct them on your business tax return.
Another advantage of having your transactions in QBO is the ability to reconcile your monthly bank and credit card statements to QBO. This is how I confirm that QBO has all your purchases and deposits and that nothing is left out or duplicated. You can have confidence that the figures in QBO are what actually took place, and nothing is overlooked.
Best of all though is the ability to review financial statements such as a Profit & Loss and Balance Sheet. I love sitting down with my clients and comparing their sales and expenses to the prior month or even the prior year(s). Using these reports allows us to see where there are highs and lows in the business and make better business decisions such as decreasing payroll costs or moving sales promotions to a different week or month. They also help you budget and plan for future sales, campaigns, and make changes that can impact your bottom line based on true data and not just how you think you remember. I often hear clients remark that they were surprised by how much their expenses added up for the month. It is good to see in total where all spending is taking place.
When a business owner has access to up-to-date financial reports, it is easier to determine the real financial situation that is faced at any given moment. Too often, business owners make financial decisions in the dark. Business accounting software can be the source of all financial information.
Accounting software makes it easy to handle your own financial tasks and is less expensive than hiring an accountant or accounting firm. Desktop software is only accessible from the computer on which it’s installed, while QBO, cloud-based software can be accessed from anywhere you
have the internet. Make life easy on yourself and set your business up for success. Your time is one of the most valuable resources you have.