Businesses come in all shapes and sizes, sell a wide range of products and services, and deal with different types of customer bases. There are, however some things that all businesses have in common. Perhaps the greatest of these is a fundamental element of every company: the need to keep accurate financial records. It’s essential to the survival of your business. It’s also the law. Like it or not, if you’re in business most states require that you file a tax return, and that means you’ve got to keep records. They don’t, however, specify in what manner those records need to be kept. As long as the information is accurate, they don’t care whether you do it with pencil and paper or use fancy accounting software.
Some of you reading this may be old enough to remember bookkeeping when it was done in actually books. The kind made of paper, that is. If you’re in that group, I don’t think I need to remind you just how much of an improvement it was to start keeping financial records using computers. The first step into the world of accounting software, for many was the use of spreadsheets. While programs like Excel aren’t, strictly speaking, dedicated accounting software, they certainly can be used for a number of bookkeeping and accounting tasks. The ability to perform arithmetic calculations, and sort the data in different ways make spreadsheets a huge time-saver in comparison to doing it on paper. And speaking from personal experience, just being able to go back and make an entry in the past without having to erase, white out, or otherwise make a mess of your ledgers is a lifesaver. But in today’s world of technology, even the venerable spreadsheet has become archaic, as more companies are using actual accounting software. If you’re running a growing business, you certainly don’t want to take on any unnecessary expenses, so you’re probably wondering whether accounting software is really worth the investment. It’s a good question, and one that I’m sure you’ll spend a fair amount of time and effort evaluating. How much value you’ll get out of purchasing accounting software will depend on a number of factors. Here are a few points to consider.
- Time Saving
The whole point of computers and software is to be more time-efficient, right? If your accounting software can save you time, make it easier to make entries, do calculations, run reports, and so on, then it’s likely worth the cost. If the program can import data directly, and even do your reconciliations for you, then the savings become even more obvious. If, on the other hand, the program will still require a lot of hours of work, it may not be worth it. You’ll have to evaluate the software you’re looking at, as well as your needs.
- Improved Accuracy
If there’s one thing that you absolutely don’t need in your business, it’s errors in your books. Even the most minute of errors spells trouble if it carries over into your tax returns, making them inaccurate, and putting you at risk of having to re-file or pay penalties. If your accounting software eliminates that risk, it’s certainly worth the investment. Again, if the software you use can download and sync your transactions automatically, it further reduces any danger of human error.
- Extra Features
We’ve really been talking, thus far, about simple bookkeeping functions. Many modern accounting programs, however, can do much more, including invoicing, send out payment reminders, and monitoring your inventory. Consider how much time you or your employees spend on those tasks, and how much that costs you. Current accounting software comes in a variety of flavors, so your mileage may vary. But if you evaluate your options carefully and make sure that you purchase the right product for your business, you’ll very likely find that it is well worth the investment.