By Reshma Roy, marketing analyst at Zoho
Do what you love. Love what you do. And while you might be doing just that, accounting is probably not among the things you love. Dancing or baking might be your calling, but you’re likely to find yourself spending more time on bookkeeping, if you are like many business owners. It’s here that an easy-to-use accounting software can help you by doing most of the heavy lifting, so you can get back to your passion.
While choosing an accounting software, it’s best to go for a cloud –based one. They not only cost up to 70% less than installed software, but also give you the freedom to work anytime and from anywhere to work anytime and from anywhere. A cloud- based software eliminates the need for servers, regular software updates, a dedicated IT department and many other hassles, saving you a lot of time and money.
Here are eight ways that a good accounting application can help your small business:
1. Take the mystery out of accounting: There are several accounting software applications available today that are easy to use and can take care of the accounting nuances for you. They save time and help you keep track of payments and receivables. These software applications can automate many bookkeeping tasks, freeing you to concentrate on things you actually love.
2. Access from anywhere: Cloud-based accounting software gives you real-time access to your finances from anywhere with just a web browser and an internet connection. In fact, most cloud-based applications support access by your smart mobile phone or tablet. You can manage or view your financial data while in the office or even on that much-needed holiday. You don't have to be a technology whiz either, because the software and the system it runs on are managed remotely by the accounting application vendor.
3. Generate reports: Accounting software can give you push-button access to all your financial statements, including statement of cash flows, profit and loss statement and balance sheet. Even an accounting novice will be able to keep tabs on their finances without the help of an accountant.
4. Accurate tax filing: A comprehensive accounting software will have tax preparation capabilities as well. It will automatically calculate the VAT to be collected from your customers and also the VAT you can reclaim for purchases made. It can also help you with filing tax returns with HMRC. Based on the software you are using, you can run the VAT reports and either get the data that needs to be entered in the VAT return form, or e-file the return directly on the HMRC site.
Also, the latest legislation states that if you're selling online services to a customer in the EU, then the VAT needs to be collected based on customer's location and not that of the seller. Since cloud-based accounting applications are automatically updated with new legislation and tax laws, the application accurately calculates the VAT due, and generates VAT MOSS reports.
5. Deal in multiple currencies: If you have international customers, transacting in multiple currencies can be a problem. With cloud-based software, the currency conversions are automatic and error-free. You can also generate invoices in multiple currencies. All sales of goods and services by UK businesses to EU-based VAT registered businesses must be reported to HMRC, and the accounting software can generate HMRC-ready reports for you.
6. Invoices: You can customise invoices and give your customers the option to make a full or partial payment. You can get paid online through payment gateways and have the customer account automatically updated in your system. When an invoice is overdue, the application can send automated reminders to clients.
7. Multiple users and collaboration: Money is always a sensitive matter, and it’s best to keep the exact financial figures to a limited number of people. With accounting software, you can control access to the application by setting roles and privileges to each user. So, there can be certain people handling sales, inventory and other functions, while only you have the complete view of your finances. You can also give your accountant access to your accounting application to collaborate on your accounts.
A cloud-based accounting software also enables better collaboration with your customers, as you can discuss the quotes and invoices with your clients through a client portal and also expedite the payment by accepting online payments.
8. Integrate with CRM: Choose an accounting software that integrates with your CRM. By doing this, you'll get 360 degree view of your customer, including their credit and payment history. This information will help salespeople focus on customers most likely to pay and not customers that are more likely to be a collection problem. Finally, an integrated solution improves efficiency between departments, reducing the time spent on exchanging and updating documents.