Partnering with the right accounting system can help your small business navigate the challenges of the pandemic
Tough times call for greater vigilance in small business record keeping.
If you are a small business owner struggling to manage the economic downturn caused by COVID-19, technology could be your best ally. While it may seem counterintuitive to invest in a new system during a crisis, the long-term advantages are worth considering.
Having a full-time accountant on payroll can ensure all your ducks are in a row in terms of budget, cash flow and tax management, reporting expenses, and complying with government regulations. Another option is to train a more junior member of your staff on a robust accounting system that simplifies all these duties.
The right accounting system, used correctly, can enable you to manage the day-to-day financial concerns of your business. For more challenging financial management questions, long-term strategic planning and compliance issues draw on the expertise of an accountant or accounting consultant.
Tips for finding tools that fit your needs
If you have been relying on simple spreadsheets to manage your company’s books, it’s time to get acquainted with the wealth of accounting systems on the market.
These tools range from enhanced spreadsheet-based apps to sophisticated one-shop bookkeeping and accounting systems that help manage payroll, tax filings, and compliance. Many are cloud-based (with strict security controls, of course) to enable remote access for team members working off-site.
Before making a purchase or investing your time and efforts into a new program, do your homework. Focus on what functionality you require from a system, and how user-friendly the system needs to be. Be sure to cover:
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How is your current system causing you problems or underperforming?
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What information do you need and want daily to help manage your business?
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Which of your daily financial management processes could be better automated?
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What record-keeping duties are most time-consuming?
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Are you currently generating the reports you need to micro-manage your business?
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Who will use the new system? Is the end user’s comfort level with technology an issue?
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What other accounting support will you have?
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How much can you afford to spend on initial setup and ongoing fees?
The right accounting system is one that:
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covers your accounting requirements
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is a good technological fit for the end-users
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is accessible to occasional users
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is within your budget
Technology to the rescue
During “normal times,” leading accounting systems such as QuickBooks or other industry-leading software are used by millions of small business owners to automate bookkeeping and business management processes. Inadequate management of cash flow, a major reason for small business failures, can be mitigated by the correct usage of a trusted accounting system.
In the case of an economic downturn or catastrophic event, having a reliable accounting system can make staying solvent easier.
Having the appropriate accounting system in place can offer some safeguards in times of crisis. Consider the usefulness of this functionality:
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Accounts receivable tracking: Most accounting systems facilitate invoice creation and management, centrally located and accessible, to allow for easy payment tracking, either due or overdue. Accurate, timely billing can minimize disputes and improve customer retention rates.
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Accounts payable tracking: Automating makes staying on top of due dates easier and will help your business avoid late fees or penalties from vendors.
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Expense tracking: Especially crucial for very small businesses, a business accounting system connected to your business bank account only will help keep business and personal expenses separate.
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Report generation: Most accounting systems offer robust, user-friendly means of reporting almost anything business-related. By using one system to contain all of your business’s relevant accounting data, you can easily reconcile your accounts and generate reports that will help with daily and longer-term cash flow management, payroll, and tax preparation.
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Strategic planning: Having all your pertinent data in one system will make it easier to monitor the key performance indicators (KPIs) that will indicate the financial health of your business. This information will help you refine your short and long-term goals. It will also make it easier for you to work with accounting consultants to plan your business strategy.
You don’t have to do it alone
Being well prepared can make a crisis – even one as devastating as the pandemic – easier to handle. Part of that preparation is having the proper tools. If you had been planning to adopt a new accounting system before the pandemic, now is the time to revisit that idea.
At Franco Blueprint, we can provide help in setting you up with the right accounting system and training for your business. We provide guidance to assess all your business’s accounting needs and recommend practical next steps. It is our business to assist small business owners and help them secure their livelihoods during times of crisis and beyond.