The majority of startup owners would agree that one of the most perplexing yet crucial tasks of running a successful business is maintaining its books.
And no business professional recognizes bookkeeping’s importance more than financial accountants. Every day, business owners consult several small and big firms to help them stay on top of their business’s accounting needs.
To say that entrepreneurs have an overwhelming amount of daily business responsibilities would be an understatement. So, selecting an appropriate accounting software and learning its ropes may seem like a daunting prospect to take on with all the other responsibilities.
If you’re after short-term business convenience, using spreadsheets and paper records may be your best bet. But if you’re in it for the long game, installing and using accounting software can be a beneficial addition to your business. Plus, once one gets around the basics, the software is relatively easy to master.
Besides drastically reducing the business owners’ stress levels, below are six compelling reasons why ditching paper for digital bookkeeping is the ultimate choice for your business.
Easier access to critical financial information
Often, a business’s financial information needs to be accessible across various departments. For example, a company’s accounting department usually requires employees to submit periodic financial information like expense reports. Sometimes, cross-functional teams may take up finance-related projects and need such access.
Therefore, maintaining your financial information in digital formats enables easier access and sharing. To restrict employee access or authorize only specific personnel, a company can set up secure folders or password-protect essential files.
Meanwhile, suppose your accounting is still in a traditional paper format. In that circumstance, employees will waste valuable time submitting paperwork and contacting the relevant supervisors to access the same information.
Paperless and greener accounting practices
If you’re pursuing advanced accounting degrees like an MBA with accounting concentration online, you’d probably know that paper records are comparatively riskier. For instance, they may get lost, damaged, or misplaced, compromising the integrity of critical business data. A cloud-based system allows businesses to eliminate the need to use paper while making all accounting records within easy reach.
Accountants no longer have to rummage through countless files in search of that one report. With digital bookkeeping, accessing and generating all necessary data is just a few clicks away. Additionally, going paperless can prove cost-effective for small businesses struggling to make it past the initial days.
Firms can make significant savings by reducing stationery expenses and freeing up filing space to dedicate to business resources instrumental to growth.
Improved speed and greater process productivity
Besides incurring hiring costs and wages, a firm’s bookkeeping and financial reporting personnel may spend excessive time performing the most basic accounting tasks.
On the other hand, digital formats and accounting software offer accountants and managers the opportunity to input and extract financial data within seconds, improving overall productivity.
Digital accounting can process business transactions faster, enabling the accounting function to generate financial analysis reports in no time. Hence, going digital can reduce a business’s hiring costs related to financial staff and managers and boost the accounting department’s productivity.
More potential for growth
Risks and losses go hand in hand with running a business. And no employee is devoid of faults and errors in their work approach, including a firm’s accounting staff. However, some financial mistakes might be too costly to ignore.
Enter digital accounting. This software can dramatically reduce the probability of errors in a business’s accounting processes. Consequently, cloud-based accounting provides better reliability than all other types of bookkeeping out there.
Given digital accounting’s uncomplicated nature, more entrepreneurs are switching towards it to expand their small startups. A manual accounting system would require a total reshuffle if you wish to scale your business.
In contrast, digital bookkeeping doesn’t need more than an upgrade to adjust its database to match your growing business requirements.
Enhanced business security
As mentioned earlier, paper records come with their fair share of risks. Even if one puts the most stringent security measures in place, they still can’t eliminate the possibility of unauthorized access, theft, and damage to records.
Implementing digital accounting allows businesses to use cloud storage and backup for their records, ensuring that a security breach doesn’t threaten years’ worth of hard work.
Using digital security measures like firewalls and data encryption instead of desktop security systems or physical locks can maximize business security. Business owners can rest assured knowing all their critical financial records are well-protected and secure.
A more streamlined bookkeeping system
Paper records and manual systems can render the most basic accounting tasks time-consuming. Even retrieving transactional information, creating schedules and reports, or searching financial history might seem like an arduous task.
Contrarily, businesses can create a more streamlined system using digital records. This system helps store financial data in a specific location and provides managers real-time access to up-to-date financial information.
Business owners can access vital financial data at their fingertips, whether to compile cash flow statements or track daily transactions.
The bottom line
The above article tried to argue why switching to digital accounting is better than manual accounting. Digital bookkeeping allows easier access to information, boosts productivity, and enhances business security.
Plus, streamlined business processes can represent your business position more accurately save time and energy spent handling mounds of receipts and paperwork.
After the switch, you can easily dedicate your time and efforts to more important business aspects that fuel business success.