July 31, 2017
Owners and managers of small or medium sized businesses have probably adopted accounting software to help ease the burden and monotony of mundane bookkeeping tasks. But it’s just as likely that they are overlooking some of the most valuable and useful features of this software — automated financial reporting, financial analysis and data sharing.
The real value of computerized accounting software is that they let you manage and direct your business quickly, easily and affordably, giving you a competitive advantage. Once data has been entered into a program, 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 expensive for many small businesses but are now available either as standard or add-on features of reasonably priced accounting software.
The features vary by program, but they all let users instantly 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 utilized 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 the actual costs, 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. If you have doubts about what direction to take, consult your accountant who can help you choose the right software and either provide the training or direct you to a suitable trainer.
Initially, accounting software may seem to complicate your life, but in the end, a few hours of training and planning will make your job easier and result in large returns.