Five ways accounting software can save small business owners time and money

When starting and running a small business, any tool that can save time, improve daily operations and reduce pain points is always welcome. Accounting software can do all this and more, taking the stress out of recording and understanding your finances and even helping to provide insight that can make it easier to see how the business is performing and where future opportunities lie. So what specific benefits does accounting software bring to a small business?

Increases productivity

One major advantage of using accounting software is that it helps you organise your financial records in a sensible, systematic way so that you have all the information immediately to hand when needed. You can also give access to other parties such as your accountant or bookkeeper, meaning everyone will be fully informed at all times. This frees you up to spend time on other tasks and helps increase your productivity. Software also makes it easier to generate reports and documents needed to ensure you meet all your financial obligations, such as paying wages and bills, submitting the necessary documentation to HMRC and managing invoices. Automating and standardising these processes wherever possible will help your business to run more efficiently.   

Reduces errors

Accounting software is designed to be simple, intuitive, user friendly and reliable. This means it is quick and easy for users to enter the relevant information accurately, and if there are mistakes, such as double entries, the software can flag them. Features such as the ability to import your electronic bank statement make it quick and easy to process and generate new transactions without errors. It's also possible to set up bank feeds so that your business transactions are automatically synced with your software, helping to increase accuracy.

Saves time

As well as reducing the opportunities for errors to creep into your books, accounting software also saves time by reducing the need for manually inputting numbers. In addition, tax and VAT reports can be created in a matter of clicks, and all of your key financial information can be seen in a simple, clear dashboard in real-time. This means you don't have to spend time moving between platforms, logging into different accounts, and double checking the numbers match, as it will all be synced automatically. When it comes to reporting time, you'll have accurate, up-to-date information ready to submit, taking the pressure off during what can be a stressful period.  

Generates insight 

One aspect of accounting software that's often overlooked is its ability to provide insights into your financial performance, with minimal effort on your part. Clear, concise dashboards let you see essential financial information at a glance, including profit and loss and cash flow. You can also analyse reports such as your income statement over time to determine how your business is performing and identify trends such as peak times when you need to ramp up production or quieter periods when you may look to boost demand. Keeping a regular eye on outstanding invoices could help you identify any slow-paying clients so you can find ways to incentivise them to pay more quickly, while assessing your purchases and expenses over time can help you identify opportunities to introduce efficiencies or set budgeting goals. With the help of accounting software, small business owners can be better equipped to understand their financial health and take steps to ensure long-term success.

Enhances security

Accounting software is designed with security at its core. User authentication, data encryption, server protection and backups are just some of the features utilised by the software to ensure your information is safe, secure and accessible.

What to look for in accounting software

Now the benefits of accounting software are clear; choosing a solution with the features and useability that work for your business is vital. Key aspects to consider before committing to a single platform include:

Ease of use

Your software should be simple to set up, intuitive and flexible. Look for solutions that include a quick-start wizard so you can get up and running in a matter of clicks, and expect a logical user interface that is immediately understandable. In most cases, there shouldn't be any need for extensive training or support. Updates should be free and automatic so you can be confident you're using a tool that works for you now and in the future. Also, consider the flexibility of the software. Is it easy to scale as you grow? Can all the relevant people access the account whenever and wherever they need to? And can you tailor dashboards so you can see the most pertinent information straight away?

Accessibility

It's no longer efficient for most small businesses to have accounting software loaded onto a single computer. Instead, look for cloud accounting software so you and anyone on your team with the relevant access can log in and see all your data anywhere there's internet access. This means you're no longer confined to managing your finances when you're in the office; instead, you can check in when on the move, overseas, en route to a meeting or whenever you want to keep tabs on the financial health of your business.

Integrations

While accounting software can be a huge time saver, look for platforms offering integrations with other tools you use. This could be with your bank account, payment portals such as Stripe or PayPal, or transaction tools like Square. The more you can sync your data, the less need for manual inputs and the fewer mistakes there should be.

Useful features

Finally, of course, make sure the features offered by the software meet your needs. Will you be accepting online payments? If so, look for a tool that enables you to accept card payments online without setting up a merchant account. Do you have large amounts of inventory to manage? If so, look for intuitive inventory tracking tools and the ability to quickly and easily create stock reports and prices without extensive manual data entry. Will you be registered for VAT? If so, look for software that can handle all VAT scenarios, including Standard, Flat Rate, EU Digital Services, and VAT MOSS, as well as handling VAT accounting in any country.

It's also worth remembering that many accounting software providers offer a free trial to test out their capabilities and explore the benefits before you commit to paying for the service.