It could sound astounding, but a US Bank study showed that 82% of businesses fail because of inadequate cash flow management. When starting a business, managing finances may seem like a piece of cake. All you need to do is enter data on a spreadsheet, and your business finances will be sorted out.
But things get tricky as you grow. The amount of data increases, and so does administrative and compliance burden. Here’s where implementing free accounting and billing software can be a good idea.
If you’re on the fence about whether to invest in an accounting solution, watch out for the warning signs mentioned below.
What is Bookkeeping Software?
Bookkeeping or accounting software is a computer application that allows you to manage your business’ financial transactions.
Bookkeeping is one of the fundamental operations of any business. It includes planning, managing, and organizing a company’s complete financial processes. Effective bookkeeping enables you to estimate capital needs, identify investment opportunities, and make informed financial decisions.
The objective of bookkeeping management is to optimize financial operations to reduce costs and increase revenue. However, bookkeeping is a tedious task. Maintaining and managing transactions include using paper-based registers to manually enter every financial action occurring in a company.
This can be costly and time-consuming. A study from SCORE showed that 77% of small businesses spend at least $1,000 a year on bookkeeping management, with 16% spending more than $20,000.
With an online accounting software solution, you can decrease these costs. It automatically records and processes financial modules and transactions, thereby eliminating the need for manual accounting and maintaining cash registers. Thus, it enables seamless data entry, error reduction, cost and time-efficiency, and improved decision making.
Signs that You Need Bookkeeping Software Now
Any company that deals with financial transactions need an accounting solution.
But, doesn’t every business involve financial transactions?
Yes, finances and accounting are a part of businesses of all sizes – whether small, medium, or large enterprises. Thus, every business should implement an automated accounting system.
However, some small vendors and providers can survive without accounting software. In fact, a survey from Clutch indicated that 53% of businesses use accounting software. This means almost half of small businesses are somehow managing their accounts manually.
There’s nothing wrong with manual bookkeeping management, but here are a few signs that your business is craving for an accounting and billing software solution.
1. You’re Scaling Up
When you are just beginning, Excel sheets can come in handy. You can simply employ a person with a working knowledge of spreadsheets, and you’ll be good to go. But when you expand your business operations, there are high chances of things getting out of control in a blink of an eye. Even the simplest of tasks like invoice and timesheet management can become cumbersome and time-consuming.
And in no time, you’ll find yourself looking for accountants, tax experts, and full-service bookkeepers. With accounting software, you can automate all the recurring tasks without hiring separate accountants. If your finances grow, you can upgrade to a bigger plan to accommodate your increasing requirements.
2. You Want to Speed Up Your Processes
Let’s say you want to create a financial strategy for the new fiscal year. You ask your accountant to churn all the financial reports from the past two years, and you end up discovering an enormous volume of spreadsheets, graphs, and reports. You’ll then need to manually go through all the reports and spreadsheets.
This will make your decision-making process slow, inaccurate, and extremely inefficient. You won’t be able to access vital information on time. And if you weren’t updating your spreadsheets regularly, the data you’ll retrieve will be outdated.
Accounting solutions come with a wide range of reporting and analytics tools that provide in-depth insights into your cash flow, expenses, and profits. Therefore, you can make quick and accurate business decisions.
3. You’re Spending Time on Manual Tasks
Small business owners are often tempted to wear as many hats as possible. They want to manage clients, drive sales, and manage finances all by themselves. While some tasks like managing client relationships and generating revenue are critical, recurring tasks like accounting and invoicing can be easily automated.
For example, you can deploy a billing and invoicing solution to create invoices in Android instead of writing and printing them. You can also automate the creation of financial reports, profit-loss statements, and tax operations.
If you’re spending too much time on repetitive tasks, you might be missing out on core business development activities. In that case, consider getting yourself a bookkeeping software solution.
4. Your Manual Operations Lack Accuracy
A Forbes article suggested that almost 90% of spreadsheets contain errors, and rightly so. We, as humans, make mistakes. While it’s okay to make mistakes, some errors can have detrimental effects. One such example is accounting errors.
If your reports aren’t making sense or the numbers aren’t adding up, your reports likely contain inaccuracies. By implementing an accounting software solution, you can eliminate human involvement altogether. As a result, your financial reports will be more accurate and error-free.
5. You Lack of Accounting Skills
Most business owners aren’t expert accountants. They might be experts in their field, but bookkeeping isn’t something they’re proficient in. While the basic knowledge of accounting may help in the initial stage of business, you’ll need a firm understanding of finances as your business grows.
However, most small business owners can’t afford expert bookkeepers. If that’s something you can relate with, a free accounting and billing software solution can come in handy.
With a billing system in place, you can manage your accounts and create comprehensive reports like an expert, without the need for hiring in-house experts.
It’s a no brainer that efficient financial management is one of the keys to success for small businesses. With the right bookkeeping solution, you can streamline your timesheet management and create invoices in Android and iPhone. But as mentioned, it starts with selecting the right solution.
Check out MoonInvoice if you’re looking for powerful, cost-effective, and user-friendly accounting and billing software.