Is Accounting Software Essential for Your Small Business?

One of the most important parts of running a successful business is knowing how much you make and how much you spend. In simple terms, you must know what your income and expenses are. When you do, it’s easier for you to stay organized and understand the financial health of your business at all times.

With that in mind, you’re probably wondering how you should go about tracking your income and expenses. Fortunately, you have a lot of options. You could, for example, use a simple spreadsheet or even do it with pen and paper. But wait, times have moved on and we’re way past using spreadsheets or paper. Besides, these can get complicated as you enter more and more information over time.

Another option is by using specifically designed accounting software. These software packages have everything you could ever wish for and offer far more than just the ability to track your income and expenses. But is all this functionality really necessary, considering the needs of a typical small business owner?

Looking for the best accounting software for your small business? Let’s dive deeper into this query in the following discussion.

Why It’s Important To Track Income and Expenses as a Small Business Owner?

Before looking at this question, though, let’s see why it’s important to track your income and expenses as a small business owner.

For one, it allows you to see how your business is doing financially at a glance. This means you don’t need to trawl through heaps of documents and complicated spreadsheets just to see how your business is performing.

It’s simple, when you’re able to see how your business is performing, you’ll also have access to a wealth of other information. For example, you’ll be able to see what products or services perform the best and those that are lagging behind. This will, in turn, enable you to make improvements where necessary.

You’ll also be able to see how your business is growing over time. So, when your business is not growing as you expect it to, you could introduce further products or services that ensure further growth. You could also, for example, rethink your marketing strategies to make them more effective.

Likewise, tracking your expenses can show where you spend your money and what expenses are necessary to keep your business running smoothly. With this information, you’ll be able to cut unnecessary expenses which, in turn, increases your profitability.

Here, you could, for example, see exactly what you’re spending on a specific marketing channel and what income it creates. So, when it’s not effective at all, you can then stop spending on it or consider another strategy or channel where your return on investment will be greater.

Finally, when you track your income and expenses, it helps you make better decisions. This is, partly, because you know exactly what you earn and what you spend but also because you’ll be basing your business decisions on concrete figures and not on hunches or emotions.

To sum up, tracking your income and expenses gives you all the information you need to run your business smoothly and efficiently and gives you an effective approach to managing your business’s finances.

Why Accounting Software?

With that in mind, let’s look at some of the reasons many small business owners turn to accounting software to track their income and expenses. Here, some of the typical reasons are:

• Easy access. Traditionally, when you bought an accounting software package, you would install it on your office PC and use it there. Nowadays, with the implementation of cloud computing, you have access to all your business’s financial information instantly, no matter where you are. Also, most, if not all accounting software platforms offer mobile apps that you can use to conveniently send invoices, receive payments, or track your expenses on the go.
• Secure. With all your business’s accounting data stored in the cloud, you don’t run the risk of losing data because of hardware failures, fire, or theft. Besides, most accounting platforms implement highly secure technologies so you can be sure your data is safe.
• Saves time. By replacing manual accounting practices with accounting software, you’ll save a lot of time that you can then rather spend on running and growing your business. So, for example, with manual accounting, you would need to make several entries for every transaction. In contrast, accounting software allows you to enter the transaction once and the rest is done automatically.
• Automation. Another feature of accounting software that saves you a lot of time is its ability to automate many mundane and repetitive tasks. For example, with accounting software, you’re typically able to automate your salary calculations,  tax calculations, preparing and calculating paychecks, and others. Likewise, accounting software can also create financial reports and statements like income statements, balance sheets, and profit and loss reports automatically.
• Fewer errors. When you track your income and expenses manually, you will inevitably make mistakes at one stage or another. Accounting software eliminates mistakes by reducing the number of entries you have to make and by automating most of the calculations you need to do. Many accounting software platforms will also identify mistakes when you enter the wrong data which, in turn, makes them easier to fix.
• Integration. Most of the accounting software packages available today integrate seamlessly with a variety of other platforms and systems. They, for example, integrate with your online banking and can automatically allocate transactions to your books. This, ultimately, makes it easier to record transactions and saves you time.
• Tax. Let’s face it, when the time comes to file your tax returns, it can be stressful. Accounting software eliminates this stress and helps you get your tax affairs in order without any hassles. As a result, you don’t have to worry about it, and you can focus on running your business instead.

The Problem With Accounting Software for Small Businesses

When you consider all the benefits mentioned above, accounting software sounds great. Why would you need to look any further, right? Well, not so fast. You see, like many other tools you use in your business, accounting software doesn’t only have benefits, but there are some serious drawbacks too.

Let’s look at some of these drawbacks in more detail.

Too Many Features

Remember, you basically want the ability to track your income and expenses. Accounting software, in contrast, offers far more than this functionality and typically offers many advanced features. This results in, mainly, two major drawbacks.

Firstly, because of the wealth of features they offer, accounting software packages can be challenging to use, especially if you don’t have the necessary accounting skills or knowledge. Also, many of the features you need to use are often overly complicated and require a steep learning curve to master.

Another drawback as a result of all these features is that these software packages will often cost you a lot of money. And remember, you’ll have to pay for the package whether you use all the features or not.

Most Small Businesses Have an Accountant

Most small businesses already have an accountant that prepares their financial reports and helps them to file their taxes. Those that don’t definitely need one. In fact, 89% of small businesses say that they are more successful when using an accountant compared to not using one.

These accountants typically have their own accounting software packages they use, and they understand all the ins and outs of the software. In simple terms, they’re the experts at using their specific platform. So, it makes little sense to invest heavily in a software package if your accountant has already done so, especially considering that you’re only looking for a solution to track your income and expenses.

Takes Time to Implement

We’ve already mentioned above that it could take some time for you to master the features accounting software offers, especially if you don’t have any accounting skills or knowledge of important accounting terms and concepts.

But it goes further than this. Accounting software is typically also more complicated to set up and get to the point where it fits perfectly with your needs and requirements. This, in turn, could take a lot of time and effort and, more often than not, requires the assistance of an accountant of the platform’s support team.

Price

Finally, another drawback of accounting software packages is they’re often expensive. Sure, some are reasonably priced, but, generally, the more features they have the more expensive they are.

In addition, while many include it in the price, many other accounting software packages also require that you purchase support for your package or pay for support on an ad-hoc basis. Ultimately, this all adds up to a hefty sum and is definitely something you should consider, especially when you want to limit your expenses.

So, do you need accounting software? Well, it all depends. You’ll have to consider whether the investment of time and effort you’ll need to make outweighs the benefits you’ll gain by tracking your income and expenses with an accounting software package. If it doesn’t, we have an alternative, and what we believe to be a better solution.

A Better Alternative to Accounting Software for Small Businesses

So, you want the ease and convenience of tracking your income and expenses that accounting software offers, but you’re not too excited about the time and effort you’ll have to invest to get the most from the platform?

Well, Billdu is a great alternative to overly complicated accounting software packages for small businesses that simply need an easy and convenient way to issue invoices and track their expenses. In simple terms, it has all the features any small business owner could ever wish for.

With that in mind, let’s look at Billdu’s features in more detail.

Invoicing

Simply put, creating invoices has never been easier. With Billdu’s invoice maker you’ll be able to invoice your customers quickly and easily. To do this, you’ll start off by creating your own customized invoices or using one of the provided invoice templates, upload a logo and a signature. Once done, you’ll be able to send new invoices to your customers.

An added bonus is that you don’t even have to be in the office to send invoices. While Billdu’s cloud-based platform makes it easy to create and send invoices on your PC, the platform also offers iOS and Android apps that allow you to send invoices while on the go or outside your regular business hours.

It doesn’t stop there, though. Billdu also makes it easy for you to track your invoices. So, once you’ve invoiced a customer, you can see when the customer receives the invoice, when they open it, and who opens it. You’ll also get a notification when a customer pays an invoice. That’s mobile invoicing all in one app.

In this way, you’ll exactly know what you’ve earned, how much you’re still owed, and who still owes you. This, in turn, makes it easier for you to manage your cashflow and identify and follow up on late payments which ensures that your accounts are always in better order.

And speaking of payments, Billdu offers various features that make it easier for your customers to pay you. For example, the platform gives a wide range of currency options, so you can invoice your customers in the currency of their choice and you’re even able to invoice customers in their own language.

Lastly, you’re able to accept payments from customers directly from the invoice when they’re paying by debit card, credit card, or PayPal. Ultimately, by giving customers a convenient way to pay you, you ensure that you get paid faster. In fact, you’ll get paid up to two times faster compared to traditional payment methods.

Expense Tracking

Apart from its extensive invoicing functionality, Billdu also gives you everything you need to track your receipts and business expenses effortlessly. In this way, you know exactly how much you’re spending and what you’re spending your money on.

In addition, it also allows you to attach photos of your receipts to your expense records and you’re able to sort your expenses into categories. As a result, you’ll know that you’re always on top and in control of your expenses which makes them easier to manage.

Other Noteworthy Features

In addition to the extensive invoicing and expense tracking features mentioned above, Billdu also offers various other features that make running your small business easier. These features include:

• Estimates. Billdu makes it easy to create professional quotes and estimates. And when a customer accepts your quote, you’ll be able to turn it into an invoice in one click. Being able to do this means you’ll win more work and generate more revenue.
• Charts and reports. With its extensive range of charts and reports, it’s easy for you to see how your business is performing. By having this information available instantly, you’ll always know if you’re ahead of the curve or if you should rethink your strategy to generate more profit.
• Collaboration. With Billdu, you’re able to add more users with different access rights and roles to your profile. As a result, you’ll be able to create a professional team that can take your business to the next level. Also, you’re able to invite your accountant and share your invoices and expenses in real-time which saves both you and your accountant a lot of time and money while, at the same time, cutting down on paperwork and errors.
• Sales. Billdu comes with an impressive array of sales tools that allow you to sell your products to your customers quickly and easily no matter what the platform. You can, for example, choose Instant page to set up your online store in a matter of minutes and you can also sell through a website widget, custom link on your site, or, in the near future, social media.
• Communication. With Billdu’s rich communication tools, your business emails and chats are always all in one place. This means you’ll always be sure that you’re up to date with your emails, documents, and products. Not only is Billdu’s Business Inbox easy to manage, but it’s also easy to scale, meaning that it grows as your business grows.

The Bottom Line

As a small business owner, it’s vital that you properly keep track of your income and expenses to be successful. Not only does it allow you to see how your business grows, but it also helps you manage your finances and make improvements to your business processes to make more profit.

So, now the question is whether you need accounting software for your small business. And here to need to consider whether you’re willing to take the time and effort to learn and implement software that could be complicated, impersonal, and more suited to large companies.

Another option is to consider Billdu. This platform has been specifically designed for small businesses and offers the tools you, as a small business owner, could ever wish for and more. To find out more about our platform and how it can help you, why not register for a free trial or visit our website for more details.