As a business owner, you know that accounting is essential. Many businesses use spreadsheets to organize and manage their financial data. However, online accounting systems are becoming increasingly popular and offer advantages over spreadsheets. Here are some reasons to switch from spreadsheets to an online accounting system:
Your business is growing. If you are sending more invoices to clients or your vendor bills are piling up, it's time to implement a workflow process. An online system can help you streamline these workflows by tracking open bills, posting bills, or automating the bill pay process. You can even send invoices and collect payments from the online accounting system.
You need reports frequently. If you are planning to apply for a line of credit or need to have a grasp on your bottom line each month, consistent reporting in spreadsheets can be very manual and time-consuming. An online accounting system can generate reports quickly, providing access to accurate, up-to-date information about your business's financial health at any given moment.
You spend too much time on data entry. If you are spending hours on tedious data entry tasks, an online accounting system can automatically reconcile your accounts and categorize your transactions, allowing you to focus on what matters most - running your business! An online system can sync directly with your bank accounts to feed your transactions into the platform automatically. Moving away from spreadsheets to an online accounting system could be a great way to free up your valuable time and energy for other functions like customer service or product development.
You need to comply with regulations. If your business is subject to certain regulations, such as those governing financial reporting or payroll taxes, an online accounting system can help you stay compliant. Many online accounting systems offer features that automate tasks related to these regulations, such as tracking expenses and generating reports. Your business finances and bank statements also need to match up in case of an audit, so having reliable accounting software is crucial.
The decision to switch from spreadsheet-based accounting to an online system depends on various factors, like the size of your business, the complexity of its operations, and how often you need access to financial information.
A spreadsheet may suffice if you are a small business owner with simple cash accounting processes and don’t require frequent financial statements. However, if you’re recording transactions on an accrual basis and dealing with multiple departments, vendors, or clients, an online system may be necessary sooner rather than later. It's also worth considering any compliance requirements, as these may require more sophisticated tools than a regular Google Sheet can provide.
Tracking expenses can also keep you inundated with business transactions and swamped around tax time. You want to make informed decisions based on accurate records and have proper expense management. The challenge is having the time to be able to look at it from the bigger picture because you're to caught up in the details while still dealing with your personal expenses too.
Overall, online accounting systems offer a number of advantages over spreadsheets, including:
Automated workflows. Online accounting systems can automate many of the time-consuming tasks associated with accounting, such as data entry, invoicing, and bill pay. This can free up your time so you can focus on other aspects of your business.
Accuracy. Online accounting systems are designed to be accurate and reliable. This is important for businesses of all sizes because it helps to show the actual expenses, but it is especially critical for businesses that are subject to regulations or that need to generate accurate financial reports.
Security. Online accounting systems are typically more secure than spreadsheets. This is because they are hosted on secure servers and are often backed up regularly.
Flexibility. Online accounting systems are often more flexible than spreadsheets. This is because they allow you to customize your settings and reports to meet your specific needs.
Cost-effectiveness. Online accounting systems can be a cost-effective solution for businesses of all sizes. This is because they typically offer a variety of pricing options, including monthly and annual plans.
If you are considering switching from spreadsheets to an online accounting system, be sure to compare the features and pricing of different systems to find the one that best meets your needs.
My Accounting Crew can help you to make this transition from self-powered accounting to helping you to free up much needed time, energy, and overall resources. We also provide better accounting reports that can track your expenses more accurately. We can keep you informed about the latest trends in technology and how they can mold into your business.