Get the Most From Accounting Software
Owners of small to mid-sized businesses depend on affordable accounting software to help ease the burden and monotony of mundane bookkeeping tasks. But it’s just as likely that they’re overlooking some of the most valuable and useful features of this software — such as automated financial reporting, financial analysis and data sharing.
The real value of accounting software is that it allows you to manage and direct your business quickly, easily and affordably, giving you a competitive advantage. Once data has been entered into a solution, it can be analyzed in innumerable ways. For example, you can forecast sales trends by product line, region and demographics.
These and other tasks were once too time-consuming and mathematically challenging for many small businesses, but they’re now widely accessible either as standard or add-on features of reasonably priced accounting software.
Specific features vary by product but most accounting solutions available today allow users to generate financial statements and reports, as well as export data to word processors, spreadsheets, tax preparation software and other programs.
Some of the most powerful functions can help your business control costs, increase revenue and boost your net income. For example, the software can be used to:
Track sales of individual products to determine whether to eliminate them from a product line.
Analyze factors affecting revenue and gross margin such as employee productivity and a product’s contribution to the bottom line.
Forecast cash flow and inventory requirements, track real time inventory and start automated “just in time” ordering, which helps lower financing and overhead costs.
Project sales by region and demographics, providing insight into how to boost sales and gross profit on sales.
Develop detailed budgets by department or project.
Generate financial statements and compare actual costs to previous projections, helping to identify problem areas and improve your forecasting abilities.
Assess performance trends such as profits, sales, borrowing, liquidity and assets, and compare the data to others in your industry.
In addition, accounting software lets you automatically develop invoices for recurring items to clients, generate collection letters, synchronize contacts with such e-mail and other applications, and estimate contract costing. The information you enter also will help tax return preparation with your accountant go more smoothly.
All of this can be achieved for minimal outlays of time and money, once your employees become comfortable with the software. If you have doubts about what direction to take, consult your accountant. He or she can help you choose the right product and either provide the training or direct you to a suitable trainer.
When initially introduced, accounting software may have seemed way too complicated for many smaller businesses. Nowadays, however, a well-planned purchase and some thorough training can result in a much better-run business that’s on top of its finances and in control of its destiny.
Copyright 2024
This article appeared in Walz Group’s February 19, 2024 issue of The Bottom Line e-newsletter, produced by TopLine Content Marketing. This content is for informational purposes only.
