Bookkeeping is integral to every business. Bookkeepers prepare and keep essential financial records that accountants use to develop advanced financial reports. Business owners and top managers then use these advanced reports to make informed decisions regarding the business. Without the bookkeeping system, your company's financial information would be a huge mess that would take time and effort to sort out. Already have an existing bookkeeping system? Probably yes. But is your business keeping up with the improvements in the bookkeeping industry? Are you using the latest financial solutions? If you are still stuck in the past, it's time to shift to modern bookkeeping. While transitioning to an advanced bookkeeping system can be stressful, it's worth the effort in the long run.
Let's dive deeper into modern bookkeeping and why you need it for your business.
What is Modern Bookkeeping?
A few decades ago, before the introduction of computers and the internet, business owners recorded financial transactions on ledgers, and most clients paid in cash. With advanced technology, business processes have improved tremendously in the current business world, from digital payments to automated systems. To remain competitive in your industry, you have to invest in technology and use business tools that are a perfect fit for your business.
Modern bookkeeping involves using technology and bookkeeping software to track, record, and maintain financial transactions. It eliminates the need to record these transactions manually on paper; instead, business owners use automated bookkeeping software systems.
Today bookkeepers need to have a deep understanding of accounting and bookkeeping software. Simply put, software that is a perfect fit for your company can eliminate the need for an in-house bookkeeping department or work together with your existing bookkeeping team.
Benefits of Modern Accounting
Advances in technology have made it possible for bookkeepers to handle their tasks accurately within the shortest time possible. With modern bookkeeping, the priority lies in leveraging the benefits of artificial intelligence to automate the bookkeeping process entirely.
Check out some of the benefits of updating your systems.
Modern technology allows you to keep digital records and eliminate paperwork. Besides reducing clutter in your offices, going paperless saves time on filing. You also don't have to worry about shredding the papers now and then.
Eliminating paperwork means adopting cloud-based bookkeeping systems that manage all your transactions. You can access your records anytime from any location, making it easy to track money flowing in and out of your business daily.
Simplifies Invoicing and Tracking
Delaying payments received from customers is one of the major problems that your business might face if you don't have a reliable invoicing and tracking system. However, implementing modern bookkeeping systems ensures that you distribute invoices and receive payments on time.
Streamlines Tax Preparation and Calculation Process
The tax period can be the worst season for your accountants if you don't have a well-established tax preparation and filing system. And failure to file taxes accurately and on time can cost your business a significant amount of money in terms of penalties or excess payment. The last thing your business needs is a collision with the IRS.
An automated bookkeeping and accounting system helps with tax documents preparation, tax calculations, and tax filing. Your in-house or virtual bookkeeper will have an easy time throughout the financial year and more so during tax time.
Improves Cash Flow
Cash flow is the backbone of your business. But, do you always have access to funds when you need to clear debt or cover overhead expenses? If not, then you have a cash flow problem, and if not handled now, your business will eventually fail. However, establishing the right financial system that can track cash movement in and out of your business will save your finances big time. Ultimately, you will achieve the level of financial freedom desired.
Easy Bank Reconciliation
Recording and maintaining your business's daily and weekly financial transactions is crucial, but your efforts will be more valuable if you perform regular bank reconciliation. You will find processing errors and identify patterns that show possible theft or fraud in your company through this process. Sometimes mistakes are inevitable, but they will be easy to fix with an efficient bookkeeping system.
Minimizes Cash Transactions
Although cash transactions are convenient in some instances, especially when handling small expenses, keeping money in your pocket can result in numerous financial errors and wastage. It's hard to tell the amount you are spending or receiving if you complete all your business transactions with cash. A modern system comes in handy when you want to keep a paper trail of all your spending plus the categories of your business spending.
There is no doubt that modern bookkeeping is a great way to track your finances, but have you thought of the benefits your business would reap from integrated systems? Well, the benefits are unlimited. When choosing a modern bookkeeping software, ensure that it can integrate with all other systems in your company, including sales and payroll, to streamline processes.
Cloud-Based Bookkeeping Solutions
With cloud-based solutions, you can access your financial data online from any location, anytime, and on any device. Your hard drive will no longer be the central hub, meaning you can track your finances on the go. In addition, these systems update records in real-time and allow multiple users to view the financial information. Other benefits of cloud-based bookkeeping and accounting systems include:
World-class security: With traditional bookkeeping systems, anyone can access your financial information as long as they have access to your computer. However, only those with your account's login details can access your data with cloud-based software.
Real-time updates: Offers a complete real-time view of your company's financial situation, reasonably necessary when making crucial business decisions.
Paperless: Eliminates the need to record transactions manually, saves time, and minimizes the risk of errors.
Customizable: Unlike traditional bookkeeping systems, the modern solution allows you to integrate all solutions and access information from different departments in one place.
Organization: Cloud-based bookkeeping systems keep organized financial records that are easy to retrieve when necessary
A modern bookkeeping system will streamline all your bookkeeping processes. It also offers you an opportunity to work with an outsourced bookkeeping team reducing the costs of maintaining an in-house bookkeeping department. So whether you are looking to enhance your tax strategy, improve the payment collection process or manage cash flow, modern bookkeeping tools fit the bill. Investing in the right bookkeeping software like Quickbooks Online is the path to financial freedom.
If you're ready to incorporate modern bookkeeping into your business, contact Two Arrows Admin Today.