Importance of Accounting and Financial Management Software
Even as accounting and financial management is required by law due to the necessity of limited companies to publish their annual report, it gives the management a daily insight how the company is performing. In this way it is possible to compare with previous months, years or competitors. Furthermore accounting is the basis of Cashflow-Management which has to be monitored in order to avoid liquidity problems. This can be achieved through traditional manual bookkeeping but Financial Management software makes it much easier as it allows automatic checks which can already happen during entry. If invoices are created with a Financial Management Software such as Quickbooks. They are immediately posted in the accounts and listed as receivables and it can be monitored how long the payment may be overdue. The profit-and-loss account, balance sheet and other kind of reporting as the mentioned receivables can be seen instantly. Another advantage of financial management software is that backups can be made regularly therefore reducing the risk of losing data through loss or accidents. This type of software has really revolutionised accounting and finance management for small companies such as ourselves. The time saved is priceless. The directors can manage their account quickly still leaving time in their day to fulfil all their tasks. The capacity of a director is often limited in the accounting area as they already have so much on their workload such as marketing, staff and making sure the companies runs as its supposed to and maybe the company cannot afford to have an account full time. With these types of software like Quickbooks you do not need to have accounting experience the programme does it for you. Basic maths obviously will help but it calculates everything for you too!
Keeping on top of all your receipts and invoices can be a pain. I know, sometimes you misplace a receipt or cant remember what you spent that cash withdrawal on, if you begin to implement finance management software you can log on easily and write it up on the day you did the transactions and it is done in seconds. This is a much better process and sustainable way of working for any small business. The main problem comes when you have done no management and it comes to the end of the financial year and all the stress kicks in. Trying to investigate and find all your spending and income its not good for you and for you business.
There are some cheaper solutions for small enterprises which have a basic functionally which normally also allows you to create invoices within the programme and print them or send via a PDF-File. There are even some open-source-software solutions as Turbocash, GnuCash or others. They also have to be set-up but it could be a free alternative worth trying.
When it comes to end of financial year and submission time you can easily reconcile your accounts with your bank statements in the software and send the main file to your accountant where they produce your final submission documents and send it off! Simple and you will save loads of money on accounting fees! Its the way forward as small company.
Jean von Vlorop