Three Ways Accounting Software Can Simplify Your Life
Receipts, spreadsheets, and sticky notes — oh my. If tax time is stressful because your books exist as “organized piles” that you (always) have the best intentions of managing throughout the year but never seem to dig into, there is a better way.
An accounting system, or software, can help. In fact, once you make the switch, you’ll probably wonder how you got by before. If you’re hesitant because of the cost, consider the opportunity cost of both the stress and the mess — and that it could all be taken care of for around $30/ month, which is likely less than you spend on coffee and/or cocktails.
Besides affordability, below are three good reasons why accounting software could and should become your business’s new best friend.
Efficiency. This is simple math: Less time spent on bookkeeping means more time spent productively doing what you do. Modern accounting systems such as Quickbooks allows you to link your bank activity directly to the software. Every transaction shows up directly inside your queue, and all you have to do is post each one to the right account (such as health insurance, taxes and licenses, subscriptions and dues, etc.). You can even create “rules” that categorize transactions automatically based on certain criteria. Adios, outdated spreadsheet. 👋
Visibility. Accounting software like Quickbooks Online (QBO) allows you to see a snapshot of your business performance in real time, anytime. Within QBO, to analyze your business’s financial health in more detail, you can run lots of different reports in only three clicks or less. A Profit and Loss report (aka P&L report) for example, is super helpful when it comes to more accurately estimating your quarterly tax payments for the year.
Accuracy. Two words: Tax deductions. Using software can help you avoid missing out on beneficial tax deductions. Using an excel spreadsheet to track everything increases the risk of a keying error or missing an expense altogether, whereas an accounting system allows the opportunity to complete bank reconciliations (comparing exactly what hit the bank to what is in Quickbooks). This step confirms all transactions have been entered into the software at the correct amounts, and helps ensure that no expense or related deduction is overlooked or forgotten come tax time.
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