Anyone who has ever taken an accounting class can tell you that accounting is a business aspect that requires very little to no error. In accounting, everything must be done in an organized, accurate and timely manner, which many people tend to neglect while running their business. This is why over the course of the next month we are going to publish a series of articles explaining the top 10 accounting mistakes made by business owners. We will go into an in depth view of the accounting mistakes most business owners make, while giving you helpful tips on how to perform better accounting practices. Use these articles as a guide and establish better accounting to enhance the success of your business.
# 10 – Using the Wrong Accounting Software
Whether you own or manage a business, knowing where you stand financially is a key aspect to understand your company and be successful. Being aware of your financial position allows you to make sound business decisions that could not be made correctly without knowing how much money you are able to spend or what you are able to afford. This is where accounting software comes into play; many business owners do not utilize accounting software or just decide to cut cost and use products such as Microsoft Excel. While Microsoft Excel is a great tool, it really isn’t your best bet when it comes to keeping your accounting in order. Investing in software such as QuickBooks and Peachtree for your business can be beneficial for you in the long run and allow you to achieve your businesses’ main goals. Here we will discuss a few reasons as to why you should invest in and utilize proper accounting software.
Accurate Financial Reporting
First and foremost accounting software helps businesses produce accurate financial reports for all business transactions. Manually recording or reporting transactions always has a higher possibility of error that is diminished with the use of computer software. This undoubtedly makes the use of accounting software a more accurate approach to financial reporting and recording that you will not see with someone using pen and paper to maintain your books.
Software That Saves Time
The next reason and probably the most popular reason why it is suggested you use accounting software is that it saves you time. Would you rather spend time running your business or spend it searching for receipts and preparing monthly budgets? With accounting software all of your bookkeeping needs such as payroll, budgeting and bill paying are done automatically. This brings about a higher turnaround time for each of these activities and allows you to spend your time on what you should be doing, running your business.
Lowering Accounting Costs
Lastly accounting software help minimize costs. With accurate and timely reporting you are diminishing the possibility of spending money on unnecessary expenses or paying late fees due to untimely payments. Also with the automatic capabilities of accounting software everything is prepared and ready for you at any time, this cuts the cost of you or one of your employees putting in work hours to find or prepare financial statements. On top of this, accounting software make the decision making process for you and your managers a lot easier. With the utilization of accounting software you will have the data you require to make fast and accurate decisions which helps save you from a costly wrong decision.
At ABIP, our team of CPA Professionals has vast amount of experience and knowledge when it comes to choosing the right program to fit your business. Whether you are a small or medium sized business, we can help you in making the proper decision and provide valuable insight when it comes to choosing the right accounting software to fit your company’s financial and reporting needs.