Technology is evolving at an exponential pace. Modernized systems are starting to replace humans in all industries. Scientists have started growing organs in labs, limbs can be created from 3D printers (prosthetics, obviously) and Spotify can predict new songs based on your listening patterns.
Over the last few years, accounting has evolved from pens, papers, and registers to cloud computing and servers. If you are not evolving with the modern world, chances are that your competition might take over.
But fear not, in this article we have listed some of the best ways that you can use to modernize your small business bookkeeping.
Outdated Accounting And Its Problems
Outdated accounting is outright inefficient. As soon as newer products are up on the market, devs and software companies stop supporting the older versions and shift their focus towards newer products. These applications then become slow, buggy, and crash repeatedly. After they become obsolete, the world moves on to newer tools and applications.
Just like an infected organ affects the whole body, a slow bookkeeping practice can affect your whole business. This is why your company should think about how to modernize your small business bookkeeping.
Benefits Of Modernizing Your Bookkeeping Systems
As technology is evolving so fast, it is necessary to stay on top of industry trends so that your business can benefit in both the short term and long term. Here are a few benefits that you can keep in mind:
- More efficiency
- More productivity
- More savings
- Less paperwork
- Automated reports
- Easy financial tracking
- Digital access from anywhere
- Security for financial records
- Simplified payroll processing
These are only a few reasons why you should modernize your bookkeeping system. As you implement a system you will see countless other benefits that support your business goals.
How To Modernize Your Small Business Bookkeeping
Before we dive into the process of modernizing your accounting system, let’s consider a few things before we take the leap.
Consider Your Options
To modernize your small business bookkeeping does not mean that there is software out there that can fix all your problems. It is not a one-size-fits-all scenario. Determine exactly what you need, figure out your budget, and then explore your options.
Depending on the size of your business, your needs, and your industry, determine which solutions are the best for you. For example, if your cash flow is not making any sense, you cannot figure out your financial statements, or if you are a small business that is under a CRA audit then hiring the services of a consultation firm like Intrepidium can help.
Compatibility is Important
Just like an android charger won’t work on your iPhone. Incompatible software will not work for your business. Investing in software that cannot communicate is going to be very annoying, expensive, and a waste of your time.
Go for applications and tools that can connect with each other seamlessly so that your business has a smooth flow, your team is happy and you can save money.
Find the Best Solution
There are thousands of tools out there with beautiful interfaces, but what good is that tool if your team cannot use it? Do not fool yourself and go for an attractive product. Go for a tool that has the key components that your team can depend upon.
Most companies will offer a free trial, so do a test run of the most compatible software, consult your team, then buy that one.
How To Modernize Your Accounting And Record Keeping For Small Business
Now that you are acquainted with the process of finding the right tools, let us dive into a few strategies that will help your bookkeeping process to get modernized.
- Go Paperless
Eliminate all the paper from your office. The digital tools that you will deploy will switch all your records online. This will not only save time on filing but you won’t have to stress about shedding your documents once you are done with them.
Going digital will mean that all your records are on a cloud-based accounting program that you can access from any location. You have the freedom to manage them anywhere, anytime, and assign tasks to your team with ease.
- Simplify Your Invoicing
With a modern system, invoicing and tracking can be done swiftly. Without any delays in payments received and requests for payment. You can stay on track with a digital solution.
A digital tool can notify you when you are running late on payments, or when an incoming payment is due.
- Reduce Cash Payments
In order to go digital, you need to rely more on e-banking and less on cash. Using cash is outdated, and this practice is prone to errors. So instead of cash, deploy digital methods with a proper money trail so that your records are intact.
There are a lot of digital methods out there such as Paypal, ApplePay, Venmo, etc. Most vendors are already using these methods so take advantage as soon as possible.
- Invest In An Accounting Software
If your company is using outdated accounting software, then you might want to upgrade to a new tool. Your best option here is to get cloud-based software that will allow you to access it from anywhere.
One of the things that you need to consider before buying new software is security. Make sure that your software is ready to counter cyber threats so that your sensitive information is secure. The more you rely on old software, the more vulnerable your information is.
- Separate Business And Personal Accounts
In the business world, it is a major mistake to mix your personal account with your business account. You might be tempted to mix the two because of convenience. But as you scale up, things are going to get messy.
You need to establish boundaries between personal and business expenses. Mainly because of liability protection. If a judge or the CRA were to audit your business, you might be on the verge of losing your business. Keeping separate accounts will save you from such outcomes, and modernize your procedures.
- Boost Tax Write-Offs
A digital bookkeeping and accounting system is the best way to ensure that you do not miss out on the potential tax write-offs that are available for your company. Something that is easy to miss when you are still on pencil and paper.
- Integrate Your Systems
When modernizing your systems, you need to make sure all your tools can communicate with one another. For example, make sure that your point of sale system can sync with your payroll processing and website sales. These integrations may seem insignificant but they create a huge difference in your business processes.
Save yourself the stress and headaches, plan early and plan wisely so that all your systems are in a flow.
We know that change is not easy. Modernizing is not a small step, but it is necessary. The earlier you modernize the more edge you will have over the competition.
With the amount of softwares that are available on the market, modernizing your small bookkeeping company is going to be a relatively easy challenge. In case you found this article interesting, be sure to check out our other content.
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