Managing finances can be challenging, especially if you're a small business owner. Keeping track of your bookkeeping can take precious time away from growing your business. Luckily, automated bookkeeping software can help streamline the process, making it easier to keep accurate records and make informed decisions.
There's bookkeeping software for every need, from cloud-based solutions that offer real-time updates to affordable options for small businesses. With the right tools, automating your bookkeeping can help you save time, reduce errors, and focus on what matters most—growing your business. In this article, we'll discuss the benefits of automated bookkeeping and explore some of the best software options available to help you get started. Let’s get into the details!
8 Benefits of Automated Bookkeeping
Are you planning to shift from manual bookkeeping to an automated system? Or are you just starting your business and looking into automation? Whether you’re a beginner or a seasoned bookkeeper, let us share the benefits of automated financial management to show you that you are making the right choice.
1. Skip Time-Consuming Manual Data Entry
Prime among the benefits you will get when you automate your bookkeeping is the freedom from manual entry. To begin the automation process, look for optical character recognition software that allows you to capture receipts and documents and convert the details into text. You can integrate the tool into your leading accounting software for categorization.
Then, you can also integrate your bank into your bookkeeping system, so the deposits and withdrawals are recorded on the books immediately. If there are other channels where you get data, like ecommerce sites and other tools and websites, you can connect them to your bookkeeping software to automate data collection.
2. Say Goodbye to Inaccuracies
The biggest downside of not automating your bookkeeping system is the inaccuracy of manual data entry. No matter how seasoned a bookkeeper is, a minor mistake in clicking the keyboard or the calculator can cause miscalculations. The tiny mistake creates a domino effect of errors which stops you from seeing your actual finances.
When submitting an income tax report, all the details in it should be accurate, as when an audit is made and there are inaccuracies, you may face repercussions from the tax bureau. But with automated bookkeeping, even tax calculations are done automatically.
3. Free From Data Corruption
A typical scene for bookkeepers using Excel sheets is data corruption. One day the Excel sheets are functioning well; the next, they won’t open. The causes of this situation vary from data being too big that the Excel sheet crashes. Sometimes file transfer from one computer to a hard disk may be incomplete or incorrect, and the file transferred cannot be accessed.
With software, all your data will not be stored on a hard disk or a single computer but on the cloud. This space has layers of protection, ensuring your business financial data is corruption-safe. You can stop using corruption-prone Excel sheets when you use automated bookkeeping.
4. Protection From Hackers
Hackers attack any website and database, and a financial record for your company is undoubtedly a great target. But because your books are saved on the cloud, you can relax as they are protected from hackers.
The cloud has a technology called data encryption which translates the information while it is moved from one storage to the cloud. As a result, even when data is being sent to the cloud, and hackers try to interfere, they won’t decipher the message. Only those with access to your account can access and understand the information.
5. Access to Key Players Only
Threat to the security of your financial data does not only come from outside but also from within. As a business owner, you should be wary about who you share your financial data with. As much as possible, keep the financial team small; these individuals should always keep financial information confidential. Create a confidentiality agreement and put it on paper, so those who will break the agreement can be held legally accountable.
Through automated bookkeeping software, you can limit access to only the most critical of people. Compared with traditional data that can be accessed by anyone who uses the computer where the data is saved, automated bookkeeping allows only those with login credentials to access financial data.
6. Access Anywhere
With traditional accounting, data can be accessed only on the devices where the document is saved. But when you use an automated bookkeeping system, you can access your books anytime as long as there is internet.
Many bookkeeping and accounting software are mobile device-compatible. When you download the app to your mobile device, you can log in and check your financial data wherever you are. The requirement to work in the office isn’t necessary anymore, and employees can work remotely. The best part is that when someone changes something on the books, the changes are updated automatically. Everybody who has access to the books can have the most updated numbers immediately.
7. Worry-Free During Tax Time
Because all your financial data is in one place, you won’t have a hard time preparing for tax time. An automated bookkeeping software tracks and categorizes all your business income and expenses and even computes the taxes you need to pay yourself. As a result, you can file tax documents and pay on time.
Regarding sales taxes, you can use other apps and software to compute, track, and remit your sales taxes automatically. If there are instances when you must remit sales taxes, the tax software and your accounting system will show you how much exactly you need to remit.
8. Automatic Reports Generation
Meanwhile, to understand the data in your books better, it is best to create reports from them. Some of the basic accounting reports you’ll want to see regularly are the following:
- Balance Sheet
- Income Statement
- Cash Flow Statement
- Statement of Owner’s Equity
These reports will allow you to see the health of your finances. These financial statements are also helpful during investors' presentations and when applying for loans.
With the help of accounting software, you can generate these reports immediately. Many software have report templates that can quickly be filled out in just a few clicks. And if you need to customize these templates, many software programs allow you to do so.
QuickBooks and Xero Accounting Software
If you are convinced that an automated bookkeeping system is just what you need for your business then you’ll need reliable bookkeeping and accounting software, and QuickBooks and Xero are the best choices. They are the primary tools that will transform your manual bookkeeping into an automated system.
Accounting Automation From QuickBooks
The answer to your question, “How to automate bookkeeping?” could be answered by simply having Quickbooks. QuickBooks is one of the top choices of bookkeepers and accountants because of the following features:
- Importation and sending of bulk invoices
- Scheduled invoices for recurring transactions
- Time and project tracking
- Live bookkeeping
- Mileage tracking
- Payroll management
- Cloud-based accounting
- Inventory management
- An option for software training
- Generation of reports
- Wide integration compatibility
All these features work together to provide business owners like you the convenience of tracking your income and expenses and transforming them into easy-to-understand reports.
QuickBooks is an excellent choice for business owners because you can access all these great features for affordable prices. For beginners, the QuickBooks Priority Circle that provides training is extremely helpful.
Wide Array Integrations With Xero
Xero is another option you can look into when picking bookkeeping and accounting software. This tool can assist you in your various financial management needs because of the following features it offers:
- Pay your bills on time through scheduled payments
- Manage expense claims
- Bank connections and reconciliation
- Invoicing
- Payment acceptance from different channels
- Time and project tracking
- Payroll management and integrations
- Contact list management
- Generation of financial reports
- In-depth analysis of numbers through Xero Analytics
- Sales tax calculation
- Inventory management
Some software don’t have a sales tax feature, but not Xero. You can also make better data-based decisions because of the tool’s data analytics capabilities.
Automated Bookkeeping Solutions by Unloop
The benefits of automating your bookkeeping are numerous and can significantly benefit your business. From saving time on manual data entry to reducing errors and accessing your financial data from anywhere, automated bookkeeping can help take the hassle out of managing your finances.
QuickBooks and Xero are two great options for reliable bookkeeping and accounting software, and we highly recommend seeking assistance from us here at Unloop to help you get started. We use both software and other tools to automate your business bookkeeping.
Don't let bookkeeping take up all your time; automate it today so you can focus on growing your business!