How small businesses can use accounting software

How small businesses can use accounting software

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In the course of expanding your business, your financial data becomes more complex. It's confusing, time-consuming, and prone to error to handle business accounts in spreadsheets. A scalable accounting solution is required as businesses grow. A business owner must think beyond spreadsheet accounting to adapt to complex financial data. An accounting software program can help.

You can optimize your business with many features offered by accounting software. Free accounting software is an indispensable tool for your business' financial data, including basic invoicing and billing, tax calculations, and project management.

The software also allows you to manage clients, reconcile bank accounts, and generate insightful financial reports to guide the smooth growth and expansion of your business.

Accounting software benefits and advantages

Billing and invoicing

Your business relies heavily on invoicing and billing, as they are the main sources of cash flow. It is time consuming, tedious, and error-prone to manage invoices on paper. In the case of recurring orders, generating physical invoices for every order you receive from a client is not feasible. Invoice tracking and payment reminders without automated software are also difficult.

Using online payment services

Receiving payment from your clients is the next step after invoicing them. It can be challenging to collect payments if clients are not provided with a convenient way to do so.

Integration of your accounting software with online payment gateways allows clients to quickly and securely make payments. Your accounting system automatically updates your accounting records when you receive payments through payment gateways. Various payment methods, including credit cards and debit cards, are available as well.

Tracking expenses

To keep track of your cash flow, you need to track your expenses. Your expenses will be tracked and categorized by accounting software so that you will have a clear picture of your spending. Additionally, accounting software can be used to upload expense receipts, scan them, and automatically record the information. 

Hence, paper receipts are no longer necessary, and the risk of misplacing them is eliminated. You can bill customers for expenses incurred on their behalf with the help of accounting apps.

Reconciliation of bank accounts

The core element of a business's accounting is the reconciliation of bank accounts, and accounting software simplifies it. When your bank account is directly linked to your accounting software, you can automatically download bank statements into your accounts.

Accounting software can categorize and match imported bank transactions automatically based on criteria and bank rules you define. After your transactions have been matched, all you need to do is confirm and verify them, and your accounts will be reconciled. Keeping your business audit-ready is made easier with simplified bank reconciliations with accounting software.

Project management and timesheets

Timesheets should be included in a powerful accounting program to ensure you are able to charge customers based on the time you spend on a project. Budgeting, tracking time, and invoicing clients are all managed by timesheets. You can avoid overcharging or undercharging your customers by keeping track of the time spent on tasks through accounting software.

To make sure everyone is on the same page, you can even have your clients approve your time entries before you bill them. The timesheets you use after a project is complete let you compare the actual hours worked with the budget, so you can plan more accurately for the next project.

Become a smart-accounting user today!

It is vital for your business growth to maintain accurate financial records at all times. You need a system to maintain accurate accounts, however, that overcomes the shortcomings of spreadsheets. Managing your invoicing and payments efficiently with accounting software replaces spreadsheets as a key cog in your business. 

With an accounting app, handling expense receipts is straightforward since minimal paperwork is required and data loss is prevented because of damaged or missing documents.

In addition, spreadsheets do not record time efficiently during project tasks, so you cannot bill for hours. A timesheet that keeps track of hours worked and converts approved entries into invoices is part of accounting software that solves this problem.

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