On the face of it picking up a pen and jotting down account figures in a paper ledger can seem like the most convenient means of keeping accounts for a smaller business. Small business owners, independent retailers and sole traders are working with limited resources and time is often the most limited of these. Even though it is relatively minimal, the time required to set up and implement book keeping software might appear on the face of it to be time they cannot afford.
However, limited time and resources are the very reason why small businesses and sole traders who still do pen and paper accounts stand to benefit dramatically from the use of book keeping software.
Generally, software for keeping books improve the efficiency of bookkeeping substantially. With less time spent filing accounts more time can be spent focusing on the business. When every hour is vital to a business any time saving facility is beneficial.
The process is simplified overall. Information is recorded clearly making it easier to find specific figures and where to add new figures.
One of the ways in which accounting software makes the process more efficient is through the various ways it automates normal book keeping practices. Variable factors such as VAT rates can be inputted and applied automatically to sales figures.
Invoices can be set to generate automatically based on figures inputted into the accounting application. These can also be configured to automatically be forwarded to the relevant parties by email.
In addition to automating the generation of invoices, bookkeeping software allows invoices and other relevant documentation to be easily found and tracked as they are processed.
Errors can also be more easily tracked. Where an error is found it can be easily corrected with all subsequent calculations based on that error being automatically tracked. A single error spotted late on in a paper accounting system could take a significant amount of time to follow up and correct all of the errors that resulted from the initial mistake.
Software allows for specific information to be brought up quickly and effortlessly with no more than one or two clicks of the mouse. Compared to rifling through books and stacks of paper this can save an enormous amount of time. Business owners can check instantly if they are owed payments or if they have outstanding payments due to suppliers.
Moving into the Cloud
The development of cloud based applications has resulted enormous potential for many different types of traditional software applications. In this regard bookkeeping software is no different.
Cloud based bookkeeping software provides all the benefits of traditional accounting software packages combined with the significant benefits of the cloud.
Because information is stored to the cloud as it is entered into the application it is instantly available for review by all parties that have access to a particular account from any location. Accountants can show their clients account standings without having to meet in person or transmit large data files via email. It also means that information is always up to date, preventing confusion or miscommunication.
When data is stored on a local machine all it takes is the failure of that machine, either through age, electrical fault or something as simple as a spilled coffee to potentially lose all that information. When data is stored on the cloud information is automatically backed up on secured servers with multiple fail-safes. Data can of course be backed-up locally but cloud storage is typically more secure in the long term.
For smaller businesses, cost saving measures are always welcome. With smaller budgets large expenses can easily put the stability of a business at risk. Because resources are shared amongst many clients in a cloud based operation the savings made as a result can be passed on to customers.
Big Red Cloud’s online book keeping software brings together the benefits of accounting software with cloud functionality. This provides customers with a dynamic, accessible, reliable and cost effective book keeping program.
Related: Sole Trader Accounting Software