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Why use Accounting Software for small-businesses?

This discussion is about "Why use Accounting Software for small-businesses?" in the "Business, Finance & Economics Discussions" forums.

  1. #1
    Junior Member rayjevztech's Avatar
    Join Date
    Aug 2015
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    Default Why use Accounting Software for small-businesses?

    During tax season, many business owners provide me their tax data in various ways: boxes of receipts, clumps of expenses stapled together with adding machine tape totaling each type of expense, or a listing of income and expenses in a spreadsheet format. When the information is fed to me by these means, I often wonder what expenses may have fallen through the cracks. I often have to ask after some deductions that appear to be missing such as bank charges and credit card interest.
    But when a client sends over a computerized accounting file that has been kept up to date and includes cash and credit card purchases, Iím fairly confident that every eligible deduction will be included on the tax return.
    I encourage all serious business owners to keep their books on computerized accounting software. Aside from completeness of data, there are other good reasons to track your businessís financial transactions using accounting software:
    Bank reconciliation made simple. You donít miss deductions when you reconcile your bank account on computerized software. The account wonít balance if you donít post the bank charges or the missing receipt for that debit card transaction at the office supply store.
    Easy input. If you donít like keyboarding in your transactions, most banks will allow for a direct download of your bank account data. With a few keystrokes, you can enter an entire monthís worth of transactions. Tracking credit cards used in the business can be simple and you will remember to post the finance charges. Reconciling the credit card balance in the same way you reconcile the bank balance to the statement will ensure that all transactions are accounted for.
    Formalized financial statements. A computerized accounting software program can provide profit and loss statements and balance sheets that are necessary to evaluate your businessí progress. If you are seeking financing for your business, you must present investors with financial statements.
    History of the business. There is nothing more educational and satisfying then bringing down a comparative income statement to compare your current year activity with prior year(s). A spreadsheet program can give you this as well, but the data entry is clumsy and more prone to inaccuracies. Speaking of spreadsheets, you can always dump your data from the software to your spreadsheet program in the event you want to play with the numbers and do projections.
    Customer history and aging. Using a softwareís invoicing feature allows you to track your customersí purchasing history and payment habits. Aging reports can be generated to facilitate collection efforts. In fact, you can note collection attempts in a special ďNotesĒ box on the customer profile screen.
    Vendor history and aging. Rather than simply cutting checks when bills are due, you can use the accounts payable system to track bills as they arrive and plan for cash flow. Using software will also provide you with reports for each vendor. It makes it easy to locate prior payments and invoices.

    Source: 7 Reasons Your Small Business Should Use Accounting Software | Fox Small Business Center

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  2. #2
    Join Date
    Dec 2016
    Accounting software excels at analyzing your business practices and letting you quickly identify how money flows through your operation. When an application manages all your financial transactions, it has extensive data at its disposal to generate various reports. You can quickly see how your revenue is divided among different operating costs. You can calculate your bottom line more efficiently and track which parts of the country generate the most interest from customers.
    The reporting options in a online bookkeeping services are virtually unlimited depending, on the type of software you use and the information you provide it. You will have all the data you need to run your business at your fingertips.

  3. #3
    Join Date
    Apr 2018
    Business owners still using excels to this moment which is absolutely crazy I can't imagine using excel with all the software out plus resources like accounting business.

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