When you run a small business, you need to think about how to get the most benefit out of the smallest number of tools. This includes software. Here are eight ways accounting software helps small businesses.
Above all, efficiency is the essential value all small businesses should operate by. Efficiency can allow you to run your business lean and agile without sacrificing quality. If you can find one accounting software option that comes equipped with or can be customized to include all the tools you require for your business' accounting, that will greatly contribute to the efficiency of your business. Even if you can't find a single solution, leveraging software can automate many accounting processes, allowing your team freedom from repetitive tasks. With the right software, you can perform all your accounting needs much more quickly and accurately than you could manually, and do everything on one interface, from payment processing to filling out a form 8832.
2. Industry-specific Capabilities
There are many different kinds of accounting software available, but you must decide whether your small business would be better off with a multipurpose tool or one with industry-specific capabilities. Some industries will find more use in general or multipurpose software due to the flexibility of the tools these types of software offer. Others, such as manufacturing and healthcare, require more specific tools at their disposal, which means they need accounting software that fits their specific needs. Healthcare providers need accounting tools that can ensure billing records match diagnostic and treatment records while manufacturers may need capabilities that allow for inventory tracking, both of which may be unavailable on standard accounting software. Once you know your industry niche, you can narrow down the type of accounting software that best fits your needs.
Every software tool you utilize should foster employee collaboration, and accounting software is no different. To keep your business healthy, you need your accounting team and tools to be solid and function smoothly. Utilizing software that allows your accounting team to track data such as sales and payroll, work on budgetary policies and update records. It also needs to allow everyone on the team to view the same data and work together on projects without requiring them all to crowd into a conference room.
Small businesses can really benefit from scalable accounting software. If you're trying to grow your business, you want tools that will be flexible and easy to scale up or down as certain areas of your business expand and contract. This ability is especially vital for accounting software since it will need to be able to handle increases in all financial areas as your business grows, including payroll, benefits, sales, profits and budgets. It will also need to be flexible enough to be able to scale down certain areas while scaling up others. For example, if you need to shrink certain departmental budgets while expanding others to provide more revenue for important projects, you need an accounting tool that can handle those adjustments.
Even if you don't require industry-specific capabilities, you'll probably still want to customize your software to suit your business' needs. Software that is customizable allows you to adjust the user interface, settings and security. You'll also be able to decide which tools you want or need and which you don't. For example, if you work with a third-party payroll service, your accounting software should be capable of interfacing with any third-party service. For another good example, many accounting software options have both invoice processing and time tracking tools, but if you only need one, you can customize the software to that specification.
6. Cloud Capabilities
The cloud offers a wide variety of benefits, including unlimited online storage. This can be a huge boon for a small business that may be lacking in physical space. If you have the ability to utilize cloud-based accounting software or to connect your software to the cloud, it can help you cut down on the need for physical storage space for all your financial records and allow you to access and search for those records more easily through a well-organized database. Additionally, cloud storage allows you and anyone else in your organization with the proper credentials to access your accounting records and tools from any device and any location, which can allow you to travel more easily for business and provide you with more opportunities to work remotely if necessary.
One of the most important ways accounting software can help small businesses is through simple, clean usability. The point of accounting software is to streamline your accounting workflow, so a user-friendly interface that's easy to navigate and operate is a key feature of accounting software.
Your accounting software should be easy to use and understand without in-depth training, able to perform multiple accounting functions and flexible to match your small business' growth potential.