What is the Importance of Business Accounting Software for Small Businesses and Startups?

Accounting software can be used to record and classify business transactions. Some accounting software also helps in invoice management, payroll, taxation, and bills payment. The accounting apps also support the generation of financial statements at any point in time.

Different accounting apps are available for small and large businesses. Small business owners generally use off-the-shelf accounting apps such as Xero, Quickbooks, and Wave. In this blog post, we will shed light on the effectiveness of accounting software used by outsourced bookkeeping service providers.

1. Get Timely Financial Reports

Professional CPAs at outsourced bookkeeping companies used accounting software to record capital and business expenses. The bookkeepers keep the accounting app updated with recent financial transactions.

Accounting software such as Dext goes a step further to evaluate the financial health of your company. Some accounting apps also pull data from eCommerce apps such as Shopify to record financial transactions.

You can get access to financial data instantly to make an important business decision. The online accounting software allows you to access financial data at any time through a PC or smartphone. The financial reports can also be shared easily with investors and creditors. You can download the financial statements to review on your desktop or mobile device.

2. Save Time in Recording Financial Transactions

Accounting software also saves a lot of time and effort in recording financial expenses. Outsourced bookkeepers can record accounting data quickly daily as compared to manual accounting methods.

The accounting apps can automate the process of recording recurring transactions. It can automatically create an entry for monthly expenses. The apps can also create sales invoices and also send automatic reminders to customers.

Some accounting software integrates directly with the bank. It automatically records any bank payments and receipts. Professional bookkeepers can also map the entries to the right accounts. In addition, the apps can also send vendor payments automatically when due.

The accounting software can also automate the task of generating reports. Accounting apps such as Deskera allow you to create an accounting report every X day. This allows you access to the latest financial information about your company at all times.

4. Data Security and Compliance

Using accounting software to record transactions is more secure as compared to manual accounting. The accounting software also has features that allow you to comply with state and federal laws regarding financial reporting. The applications create automatic backups of accounting data. The apps can also secure the financial data for up to seven years as required by US laws.

Reliable accounting software has additional security features to secure confidential data. Firewall protection reduces the risk of access to confidential financial transactions by hackers. The apps also generate unique lDs and passwords that ensure that only authorized personnel has access to financial data.

Accounting software can also be used to prepare financial statements for registered companies in compliance with data reporting standards. The apps can create reports that conform to state and federal laws for reporting data.

5. Easier Collaboration

Accounting apps also make collaboration easier. The accounting data can be downloaded and shared with the time. Cloud accounting apps ensure that everyone in the team has access to the most recent financial data.

Anyone with an internet-connected device can access the data. Managers from different departments can get access to real-time financial information. All they have to do is to log in using an ID and password and get access to the accounting data.

Accounting software can be customized to give different levels of access to users. For instance, the marketing department staff can only get access to sales-related financial data. The HR team can access payroll information. The CEO or owner can have unlimited access to accounting data. These multi-level user restrictions ensure that everyone gets access to the information required for the role.

Multiple users can have access to the accounting information at the same time. The team can collaborate and review the accounting data to chart the future direction of the

6. Reduced Errors in Recording Accounting Transactions

Lastly, accounting business software also reduces human errors in recording accounting entries. Using an accounting app ensures an accurate record of financial information without any errors. An accurate record of financial data ensures that the management makes sound financial decisions.

Using an accounting app reduces the errors in making journal entries. Most common accounting errors can be avoided by using a professional accounting app. Outsourced bookkeeping providers make use of reliable and secure cloud accounting apps that results in minimizing the errors in recording financial transactions.

Accounting apps will display a notification when the accounting entries don’t balance. The app will notify of any potential error in accounting entries. The system will notify you about the error before you save the transaction. This minimizes the error in recording financial transactions.

The system will also ensure that the accounting team is working on the updated accounting data. It merges changes automatically based on the date of entry. This increases the integrity of the accounting data entered by different accounting personnel.

Conclusion

Accounting software helps streamline the accounting process. It assists in organizing financial data properly and accurately. All financial information is automatically categorized which helps in the preparation of financial statements such as income statements, balance sheets, cash flow statements, and more.

Cloud accounting app improves team collaboration. It leads to improved coordination between different departments resulting in effective operations. With an accounting app, business owners get access to accurate financial information. It leads to effective decision-making that results in an improved financial position of the company. Managers can know about the financial health of the company instantly at any time.

With accounting software, outsourced bookkeepers can accurately record financial transactions. Maxim Liberty has a team of professional CPAs who use cloud accounting software to record financial transactions. You can save time and cost by using the accounting app for the recording of accounting information by hiring our services. If you want to get in touch with us, you can dial (703) 957-6938 today.