With so many tools available, it can be difficult to find what works for your business. In this section, we break down some helpful tools so you can find the one most compatible with your business.
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Accounting and bookkeeping
Bench is a bookkeeping service that integrates human bookkeepers with technology.Accounting and Bookkeeping
FreshBooks is an invoice and accounting platform for businesses of varying sizes.Accounting and Bookkeeping
QuickBooks is an accounting program for businesses of different sizes.Accounting and Bookkeeping
Xero is a cloud-based accounting software for small businesses.Accounting and Bookkeeping
Accounting is a key part of running a business. But it’s also a tedious task that some would rather put off to the last-minute. If this describes your relationship with accounting, then you’re not alone.
In some polls, bookkeeping has been named small business owners’ least favorite task. It can be dull, time consuming, and down-right boring. Plus, it’s one of the last things you want to be doing at the end of a long week or month. So it’s often pushed back to the end of the to-do list. And if you’re anxious to see a cash flow number lower than you had hoped for, you may find yourself procrastinating.
Of course, it’s important to note that bookkeeping and accounting can become easier with the right tools.
While it can be a frustrating part of running a business, bookkeeping and accounting are essential.
Although the terms are often used interchangeably, they don’t mean the same thing, but they feed off each other. Bookkeeping is the process of recording financial transactions and tracking assets, while accounting is the interpretation and summary of those records.
They are two parts of the same puzzle, and together, they give you the best picture of where you stand financially.
Help keep you organized
As a small business owner, you are often swamped with a range of tasks, all competing for your attention. Maintaining your books will help keep you organized. And if you’re organized, you can set yourself up to be more efficient and stay on target with your goals.
Are useful for seeking capital or selling your business
If you want to get the attention of investors or secure loans, your business’ finances will speak for themselves. It is critical to be able to demonstrate revenue, costs, cash flow, and taxes, among other things.
Provide documentation in case of audits
If you ever find yourself under scrutiny, well-kept books may just be your saving grace. Having consistent documentation will go a long way in justifying actions and backing up taxes or insurance claims, for example.
Highlight financial successes or pitfalls
Consistent and accurate documentation will also shed light on what's going well and what areas need your attention. You’ll know more about your expenses, cashflow, surpluses, and deficits. Armed with this information, you’ll be able to make better decisions.
Supply useful performance indicators
If you set financial goals, one of the best ways to track progress is through bookkeeping and accounting. With proper accounting, you’ll know very quickly if you’re straying off course so you can take corrective action.
While you can track your expenses manually, you can also use accounting software to help automate your accounting tasks.
Accounting software can:
- Save you time: Because you don’t have to input each and every transaction, you can save time.
- Automatically sync your transactions: This will make it so that you don’t miss any important transactions.
- Shed light on your financial picture: This will reveal important, need-to-know data.
- Provide continual financial monitoring: This is a good way to know when you are successful (and can celebrate) and when you make missteps (and how you can correct them).
- Track inventory and work flow: Have an air-tight seal on assets and expenses.
- Scale alongside your business: Unlike a human, there’s no limit to the amount of work the software can perform.
- Simplify taxes: This may make taxes simpler because you have all the necessary information on hand.
Produce useful financial reports and analysis: This can give key visual representations of your business’ financial health.