7 Reasons Why Your Business Needs Online Accounting

While it is hard to imagine any organization not having an electronic accounting system, some businesses do not have that system online. In some cases, that might be appropriate or even mandatory, but in most, not having a functioning online accounting system is like shooting oneself in the foot.

Here are seven reasons why your business needs online accounting for business.

1.Streamlined Processes

An online accounting system allows for remote work and input from employees. Tallying expenses, for example, is no longer a process of organizing paper receipts and inputting spending information into a database. Online accounting lets employees receive digital receipts and transfer them instantly to a report. 

Generating reports and databases is also more straightforward. An online system allows anyone with permission to access data, create a database, and build and print a report. Once created, the system can share both via several methods:

• On a shared drive 
• Via email
• Transferred to another app
• Shared through text
• Printed for hard copy
• Saved into a.pdf for printing and distribution

In addition, anyone with an account and password can input payroll, financial, and accounting data directly into the system. It can then be shared, edited (per security protocols), and published or stored in the online system for review and approval. What used to take several steps and multiple people can now be done quickly and securely.

2. Reduction of Required Manual Work

Manual accounting systems require a lot of data input by employees in and out of the accounting department. Verifying that data and fixing errors is often a process of tracking down the employee that entered it and physically reviewing their input data to ensure it was accurate. 

With an online system, getting to the bottom of a data error is a matter of accessing the account of the person who input the data and looking at the data or documents backing up the entry. Examining source documents is particularly helpful when verifying expense or financial report data.

The online system also aids in the reconciliation of accounts, preparing invoices, working with customers to resolve late payments, and resolving invoicing questions. Getting direct access to the correct data is a matter of knowing where to look online rather than having to track down hard copies and compare them to what has been input.

Moreover, the advent of specialized construction management software simplifies estimating and invoicing, streamlining administrative tasks considerably for general contractors. This integration not only enhances efficiency but also scales down manual work significantly

3. Real-Time Financial Figures

With accounting systems that are not online, the data in any report has aged. It is at least as old as it took someone to print out a hard copy and deliver it to the person requesting the information. 

With an online system, a report can be created and delivered to the person making the request almost immediately. Real-time data capture means that the information in the report is as current as possible. 

Financial data that is current is also helpful in making business decisions. An online accounting system allows decision-making using the most up-to-date data possible. That can be vital when making financial decisions based on cash flow or the financial health of a business.

4. Better Cash Flow Management

Real-time data can be invaluable when managing cash flow. Business leaders can see what is on hand, what is coming into the business, and what is looming in expenses. Business leaders can make financial decisions with confidence. It also helps with capital purchases. If you know you have the revenue, an outlay for equipment or resources is not so much of a gamble.

5. Automated Invoicing

The old invoicing method of assembling an invoice on a spreadsheet or CMS and downloading it into an accounting system could take days and frequently lags. Worse than that is having to re-input the financial data into the system. 

With an online accounting system, an invoice can be sent immediately to a client electronically.

Invoicing can also be automated. Recurring invoices can be automatically issued at a set date and sent directly to a customer. Payment of an invoice can also be automatically logged into the system. The invoice and account are instantly updated. What used to require at least two employees and take days can now be accomplished by one process and a single employee.

6. Easier Analytics

Online data can be easily selected and analyzed. Quick, easy analysis using applicant tracking systems means reports, projections, cash flow forecasting, and modelling are available whenever needed. 

Distribution is also easier as online data can be sent to several parties at once, negating the need to print out multiple copies of the same reports and hand-deliver them to interested parties. 

7. Legal Compliance Is Simpler 

An offline system can take days to hand-select data, run multiple reports, and print them all off or store them as stand-alone files. Plus, if data is input after a report runs or a dataset is sent to an auditor or government agency, a correction, update, or edit must be issued. The organization receiving the data must be alerted of the update.

At best, this makes a business look disorganized. At worst, it raises suspicions that a company is disjointed, and its data might not be as accurate as it needs to be. If the business has a history of auditing issues, it can mean further scrutiny and having to produce more background evidence to prove the data is accurate.

Legal compliance with audits and mandatory reporting, as well as producing up-to-date tax forms and other required financial, payroll, and benefits documents in an online system, is almost immediate. 

The data included is as up-to-date as the business accounting system data. All parties can rest assured that the data is accurate and that it is as simple as accessing the system.

Payroll: Online Accounting for Businesses

If you’re looking for an easy-to-use tool for your business’ online accounting, payroll is a fully integrated solution for your payroll needs. It automates all your calculations, makes sure you’re compliant, and generates real-time reports ready to download. 

Additionally, it’s a simple solution for your employees when they need to manage their payslips, benefits information, vacation requests, and more.

Conclusion

An online accounting system can help a business manage its finances, track invoices, analyze its financial status quickly, and maintain legal compliance with peace of mind. Companies without an online system are working at a disadvantage. 

If your business is looking to get a better handle on vital internal processes, an online system for HR, benefits, accounting, financial, payroll, and compliance management is an easy decision.