If you’re like most small business owners, hiring a full-time accountant to manage and monitor your company’s cash flow probably isn’t feasible – not yet, at least. This is why you need a financial management system to track your income and expenses, so that come tax time, you don’t run around like a headless chicken wondering where all the receipts and invoices went.
There are traditional desktop-only accounting solutions, and there’s Microsoft Excel to help out with the record-keeping. But there’s a trade-off. These old-school desktop programs – or worse, file management systems that involve stacks of folders and squeaky metal filing cabinets – are clunky and lack many of the advanced features that modern accounting systems offer, and can make things more overwhelming for non-accountants.
This ultimately leads to costly human error, inefficiency, and even total abandonment of the tool, at the expense of the birds-eye view necessary to understand how your enterprise is doing financially.
But here’s the thing: you don’t have to use an old-school software. There are accounting software innovations that are making bookkeeping much easier for small business owners.
Among these innovations are:
Advanced record management
The absence of accurate information severely hampers the effectiveness of your accounting application, which makes advanced record management features a must-have.
Advanced record management in accounting solutions include:
- Receipt scanning, which translates images of your receipts into transaction records. You don’t need to scan the receipt. You can just take a photo. Upload the photo to Dropbox or any other storage service of your choice. SlickPie’s MagicBot, which is a built-in automated data entry tool that relies on machine learning and human feedback, carries this feature, which means you don’t need to manually input hundreds, or even thousands, of receipts into the system.
- Custom fields for precise categorization of both vendor and customer transactions. You get a better sense of which customer and vendor categories are costing or earning you money.
- Record cloning for quick and easy creation of customer and vendor records. You don’t have to manually enter similar data over and over again, freeing up much-needed time for you to focus on other things.
- Artificial intelligence for little to no coding, such as the feature Xero is developing so users no longer need to code transactions because “the machine learning will let it be done automatically when the bank reconciliation arrives.”
Anytime, anywhere access
By and large, purely desktop applications come with big inconveniences for small businesses:
- When you download the program onto a computer, it stays there. You can’t access it anywhere else.
- It forces you to schedule all your accounting work and manually track external transactions.
- Every time the software updates, it takes up space on your hard drive.
- If your hardware dies on you, any information you haven’t backed up dies along with it.
Thankfully, cloud technology has arrived. As long as you have a device that connects to the internet, you get your work done. A 2014 paper by financial company Deloitte noted that the cloud has improved small business profitability by 21% and has sped up growth by 26%.
With a cloud-based accounting program, you can:
- Do some bookkeeping no matter where you are.
- Do your accounting whenever you find free time.
- Stop worrying about updates eating up disk space, since updates stay on the cloud.
- Be confident that you don’t lose important information because cloud service providers employ redundant backup solutions to ensure that your data is safe and accessible anytime.
A recently unveiled feature from Sage, a chatbot built on Slack and Facebook Messenger, lets users tap existing technologies, particularly existing cloud technologies, to help them manage their finances. The bot answers things like which among your clients still owe you money and how much you’ve earned the previous month.
The ability to react quickly to trends is necessary to compete, which is exactly the reason why real-time reporting is an essential feature of modern accounting programs. It lets you see the effects of a transaction on your finances almost as soon as it’s completed.
Among other things, real-time reporting:
- Gives you an at-a-glance overview of how your company is doing financially, on an on-demand basis.
- Allows you to quickly pinpoint efficiencies, inefficiencies, and opportunities for your business.
- Helps you steer your enterprise clear of problems before they escalate into catastrophes that can run you out of business.
Bottom line, real-time reporting allows you to make big decisions promptly.
Push notifications and automatic payment reminders
Running a small business is no cakewalk, and you can’t be expected to keep track of everything between finding new clients and ensuring operations run like clockwork.
This is where push notifications and automatic reminders come in. These features allow the application to send timely reminders via in-app messages, email, and SMS, alerting you and your customers to events and tasks that require your attention.
Having these in your accounting software helps you keep your billing process on track. For example:
- Automatic payment reminders ensure customers pay your company on time. This is especially useful for one-off transactions.
- Auto-recurring invoices, much like automatic payment reminders, ensure clients keep up with payments. These work best for clients that are on a staggered payment plan or that are paying for an ongoing service.
- Alternatively, you can set the application to send you a push notification to remind you to invoice the customer. This comes in handy if you want to add a personal touch to your billing process, or for any delinquent account holders who may need extra attention.
- You can also use this feature to keep track of your own bills.
User-friendly suites, language, and interface
Originally, bookkeeping programs were very complicated:
- They tended to include far more features and capabilities than the average small business owner needed.
- They used terminology that people with no background in accounting would struggle to understand.
- They were not intuitive at all.
While modern, cloud-based accounting solutions are still inclined to throw everything and the kitchen sink into their offers, they’ve at least made it much easier for people to understand and use them:
- They offer multiple product versions so you can avail of a solution that matches what your small business needs—nothing more, nothing less.
- They’ve simplified the language as much as possible, ensuring that even newbie users can understand how to use the tool to track their company finances.
- They’ve streamlined the interface and navigation so you can easily find the sections and features you want to use.
These improvements to user experience have made accounting apps less intimidating and more accessible to everyone.
For many small business owners, bookkeeping is tedious, boring work they’d rather not do – if they can help it. But that doesn’t mean you can’t manage it. Thanks to the many innovations in accounting technology, keeping track of your company’s cash flow isn’t so overwhelming anymore.
*Elea Andrea Almazora also contributed to this article.
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