Accounting systems need to be updated so businesses can stay competitive and keep growing. Learn why a modernized system is important and the key benefits.
Accounting and bookkeeping are often overlooked business functions, especially for entrepreneurs or small businesses. But, having a bare minimum understanding of where the business stands just isn’t enough.
An efficient, accurate accounting process is needed to obtain the kind of knowledge required to keep growing your business. Even if you think things are moving along smoothly, you have no way of knowing the most important financial metrics without the right system in place.
This article will discuss why an accounting system is important, the benefits of updating your system, and how to do it.
Why is an accounting system important?
One of the most important reasons to have an accounting system is visibility. All your business decisions should consider factors like month-to-month profit, surprise expenses, and how income may ebb and flow. If you’re just counting on things working out and haven’t hit any hiccups yet, rest assured that things can go wrong fast without this knowledge.
If you are just guessing about how you’re growing, the cost of customer acquisition and churn, vendor costs, tax implications, and other bookkeeping information, it’s nearly impossible to make the right call when forecasting and planning for the business’s future.
An accounting system gives you the necessary visibility to understand where you’ve been and where you’re headed. Once you have a system in place, whether strategically using spreadsheets or implementing accounting software, your next step is keeping the system up to date.
Benefits of keeping your accounting system updated
Let’s walk through the advantages of maintaining an accounting system that uses all the latest advances and updates.
1. Assess return on investment
When you can see what’s going in and out of the business accurately and clearly, you can quickly deduce how much return on investment your business is getting from each expense category. Which customers are most worth your time? Where should you be focusing more energy? This is a quick way to invest in the most fruitful revenue streams for your business.
2. Eliminate unnecessary costs
When monthly payments are automatic, it’s easy to forget about them. Perhaps you’re paying for an office space your business doesn’t use, or you don’t need a vendor’s services every single month anymore. An accounting system gives you insight into each and every cost so you can eliminate anything extra that you simply don’t need.
An accounting process also helps you determine if you’re paying too much for a third-party service and can find a more affordable option that is just as high quality. Some competitive research may come into play here as well.
3. Tax planning
You never want to have to scramble each spring when it’s tax time. Updated accounting systems help you keep track of everything on a month-to-month basis, ensuring that your books are always updated. If you have to pay quarterly estimated tax, this is even more beneficial, but no matter when you pay, having everything organized throughout the year will save you lots of time and headaches. Spending time on accounting can also help you minimize your tax burden, as you can take the time to understand the deductions and credits that apply to you.
4. Better workflows
An accounting system will help you stay organized, which will then seep over into other aspects of your business. Using an accounting platform provides additional advantages, including automation tools, reporting, and analytics that help you ensure accuracy and view all your numbers instantly. The latest technologies have only improved accounting, and taking advantage of these solutions helps you align your process to business needs and save time on everyday tasks along the way.
How to update your accounting system
Staying on top of your financial processes is an ongoing task. Remember that you won’t implement a successful system and then forget about it. Even with automation, it is still a must to ensure the software you’re using is always meeting your needs. Pay attention to tasks that are taking much longer than they should, as there is probably a better way to get them done.
One of the best ways to use a better accounting system is to use software that takes on several tedious tasks to manage your finances. The right platform ensures accounting reliability, delivering accurate and accessible reports and records.
Remember that you and your team may need a bit of guidance when incorporating new tools into your existing systems. Be patient and encourage questions. Make sure they have everything they need to use new platforms successfully.
Accounting is a regular, monthly business function. Give it the attention it deserves by implementing the right accounting system and making sure you’re using the latest tools to your advantage.
Work with Franco Blueprint
Working with an accounting professional can help you create more efficient, successful bookkeeping and accounting processes.
The Franco Blueprint team is ready to help you create, launch, and update your accounting system. We know the importance of organization, accurate record-keeping, and streamlined processes for the success of your business, and we’re ready to guide you through the process. We help you manage your taxes, get paid faster, and automate accounting so that you have peace of mind. We help you focus on risk mitigation and cash flow so your business only continues to improve.
Contact Franco Blueprint for a free consultation.