LUTZ BUSINESS INSIGHTS
6 Benefits of Automating Your Accounting
SUSIE KRAUSE, LUTZ CONSULTING SHAREHOLDER
Still using paper or Excel for your company’s accounting tasks? There’s a better way.
Maybe a manual accounting system worked fine for your small business when you were just starting out. You wrote checks, sent paper invoices, and recorded payments.
But you grew. And with growth come more complex accounting chores, like advanced tax preparation and sophisticated report generation – maybe even payroll processing. Even if you’re doing some of your work in Excel, you don’t have one central location for all your customer and vendor, sales and expense information. Locating a critical detail quickly is nearly impossible.
That’s the first benefit of using a small business accounting application like QuickBooks or QuickBooks Online: All of your financial data is in one place. As you create records and transactions, they’re filed neatly in the appropriate areas. You can set up a search for anything you need and find it in seconds.
Other benefits include:
- Time and money savings. This is perhaps the most compelling reason to automate. Once you’ve created a record for your customers, vendors, and employees, you’ll never have to enter that information again. Rather, forms like invoices and checks contain drop-down menus containing lists of these records. You simply select the one you want for that transaction.
- Improved accuracy. Because you’re not constantly re-entering data you’ve already typed in, the incidence of errors will go down. Accounting software also does all your calculations for you, including subtotals and totals for every type of transaction (sales order, credit memo, statement, purchase order, etc.) sales tax, and payroll deductions.
- A better understanding of accounting. Financial management applications are based on the centuries-old double-entry accounting method, which is a complex system. But software is designed for the business owner, not for accountants. It uses words like “sales” and “purchases,” not “debits” and “credits.” As you explore the software’s features, you’ll learn about standard accounting workflow and be able to streamline your own.
- Thorough, customizable reports. Assembling reports manually that tell you, for example, who’s behind on sending payments for invoices, is time-consuming. It’s also easy to miss a past-due account here and there. Accounting applications come equipped with dozens of customizable report templates, pre-defined spreadsheet-like tables that display your data, like Transaction List by Customer, Unpaid Bills Detail, and Purchases by Vendor Summary.
- Faster customer payments. You may be using the internet to check account balances, exchange email with customers, etc. Accounting software and websites offer more focused uses that can help you get paid faster. For example, you can create and send invoices through email. Accept credit and debit cards. Download bank transactions, so you can follow up on delinquent payments.
Making the transition from a manual accounting system to an application like QuickBooks requires some knowledge of software and of accounting. We have both. We’d be happy to work with your small business to implement a new way of doing things that can eventually help you make better business decisions.
ABOUT THE AUTHOR
SUSIE KRAUSE + CONSULTING SHAREHOLDER
Susie Krause is a Consulting Shareholder at Lutz with over 30 years of accounting and taxation experience. She specializes in closely held business consulting and is the Partner-in-Charge of the Client Accounting Services Department.
AREAS OF FOCUS
- Client Accounting Services
- Small Business Consulting
- Outsourced Accounting
- Payroll & Compensation Planning
AFFILIATIONS AND CREDENTIALS
- American Institute of Certified Public Accountants, Member
- Nebraska Society of Certified Public Accountants, Member
- Certified Public Accountant
- BSBA in Accounting, University of Nebraska, Lincoln, NE
- The Bethlehem House, Past Board Member
- St. Stephen the Martyr, Parent Advisory Committee, Past Member
- P.E.O., Philanthropic Educational Organization, Member
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