Five Reasons Why an Accounting Software Will Increase Your Business Sales
By Space Coast Daily // March 8, 2020
Due to limited resources, most small business owners handle various departments in their company, even the ones that aren’t in their field of expertise.
One area that a lot of entrepreneurs struggle with is accounting, with all its balancing intricacies and legal complexities.
Fortunately, you can purchase accounting software to lift this particular burden off your shoulders. Apps like Wave are explicitly developed to provide bookkeeping support for small businesses at an affordable cost.
Here are five reasons why accounting software will increase your business sales:
1. Maintains Books Accuracy
Even if you spend lots of time and effort in calculating and double-checking every transaction on your ledgers, there’s still a higher chance for errors when you do it manually. Accounting software does the math for you. All you need to do is to fill in the details of the entries, and it’ll compute the right amount automatically.
At the early stages of your business, mistakes can still be repairable. You can easily spot the error and edit the entry to balance your books. However, as your company grows and generates more sales, your ledgers will become more confusing. It will cost you more time and effort to go over each item, which can compound the problem.
It’s better to invest in accounting software early on to avoid issues in the future. With this, you can focus on growing your business and increasing sales without worrying about balancing your ledgers.
2. Streamlines Your Processes
Accounting software makes you and your employees’ lives easier because it serves as a central database for all accounting-related information on your business. With this tool, you can also automate redundant tasks, such as data entry.
For each new customer and vendor, you have to put in their information and first purchase. However, for subsequent transactions, you can easily pull up their file and add a particular sale to their purchase history.
Accounting apps make the process of recording and retrieving data more seamless. Consequently, you can spend more time in monitoring and developing revenue-generating tasks, like your sales strategy and digital marketing efforts.
3. Generates Reports Effortlessly
Payment collection is also another process that’s made easier by accounting software. The program allows you to generate digital invoices at the click of a button and send it to your clients.
You can even automate follow-up emails if the customer hasn’t paid after a defined period.
Reports on your cash flow and expenditures are also useful in helping you make decisions for your company’s future. Accounting programs collate the data that you want to be included in a particular report, which you can easily print on paper or publish as a digital file. With this, you can share your progress to investors and maintain transparency with your dealings.
4. Manages Taxes Efficiently
Another useful feature in most accounting apps is automatic tax computation. In running a business, you’ll need to mind the cost of goods sold, wages and employee benefits or expenses, interest rate, depreciation, and advertising for your taxes. Accounting software can take care of all these factors on your behalf so that you can focus on paying the total amount for your legal compliance.
These are the different types of business taxes:
• Income Tax – In C corporations, the entity pays the tax, while the owner has to pay this fee on their income share in a sole proprietorship, partnership, or S corporation.
• Employment Tax – You have to withhold the income taxes as well as Social Security and Medicare taxes on behalf of your employees.
• Sales Tax – Businesses that are operating in states with sales tax have to incorporate it into their transactions.
• Excise Tax – Depending on your industry, you may have to pay excise taxes on fuel expenses and highway usage by your trucks, among others.
5. Cuts Accounting Costs
While you may think that accounting software and the hardware it requires to run will cost you more, you should consider the benefits that you’ll reap in the future. As mentioned above, as your company grows, your books will have more entries, which makes it challenging to spot inaccuracies.
The automation of accounting programs gives you more value for your money. Your employees won’t have to stay overtime to finish checking the ledgers or sending follow-up emails to your clients for payments.
Accounting software makes every small business owner’s life easier by ensuring that your books are accurate. You also get to streamline your processes and generate reports effortlessly.
Plus, managing taxes have become more seamless, so you can be sure that you comply with the government’s mandate on running a company. All of these features and functions allow you to cut costs, which you can use to grow your business further.
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