The top benefits of using an online accounting system
If you have your own business, you’ve probably realized that you need to have an accounting system of some sort. Unless you’re an accountant, this is almost never at the top of your list of things to do, and it may seem overwhelming. There are multiple benefits to using an accounting system, and even more benefits of using an online system. Here are a three topics to consider, and some ideas to ease the overwhelm.
As computing power and competition among software companies have increased the price point for small business accounting systems has dropped in recent years. What is amazing is that the software providers have even been increasing functionality at the same time.
At ABT we currently work with Wave and Xero. Wave is a free accounting platform. It promises to be free forever. It is a complete double entry accounting system, and is more than enough for a micro business or side hustle. Banking information can be imported and invoices can be sent out to customers via email. Xero offers a more complete platform with improved features and plans that start at $9/month.
One of the biggest advancements in recent years is the great reduction in data entry that has been facilitated by automation. With the ability to import banking information into the accounting software. Now many accounting systems can use rules, logic, and machine learning to create accounting entries from the information received from the bank. The only thing that needs to be done by the humans in many cases is confirm that the computer has correctly interpreted the transaction. More complex and rare transactions still require human intervention, but even many of these could be automated in the future.
Complexity and Collaboration
Our favorite thing about Xero is that it uses non-accountant language to describe accounting transactions. Some of my personal favorites are “spend money” and “receive money”. These are terms that just about everybody understands, and lowers the barrier for non-accountants to perform many tasks successfully.
Above and beyond the ease of use, the fact that an online accounting system is available anywhere the internet is available increases the collaboration between remote teams. Now it is common place for a business owner to have collaborators, which could be employees, sub-contractors, bookkeepers, accountants or consultants, working with them on a daily basis from a remote location. Does it make sense for your company to hire full time bookkeeper? If the answer is no, then an online accounting system would be the perfect methodology to delegate the accounting task at a fraction of the cost of hiring an employee with the experience to perform the task well.
If the transition scares you, have no fear! The team here at ABT has transitioned companies from start ups run by millennials to businesses which have been established for decades run by baby boomers. We’re here to help, so please don’t hesitate to reach out.