Still Doing Manual Accounting? It’s Costing You Money
Erin Baas, Client Advisory Services Director
April 2, 2018
If you manage your company’s financial books, maintaining a positive cash flow is undoubtedly a top priority. You’re constantly working to minimize expenses and maximize income. There’s one item that may not show up prominently in your expense records, but you are spending unnecessary money on it: manual accounting. Here are some ways you’re missing time- and cost-saving opportunities by not computerizing your financial management tasks:
Entering the same data multiple times.
There’s a lot of repetition in accounting. You’re probably writing or typing things like customer and vendor addresses, item descriptions, and payment terms every time you create a transaction or other interaction. Enter that information once in accounting software, and you can simply call it up when you need it.
Jeopardizing your customer and vendor relationships.
Instant access to your financial files and records is essential when you’re dealing with a business contact who has a question or complaint. So is the accuracy of your forms. When you’re using paper and file folders for your accounting work, you risk unpleasant interaction and dissatisfaction when documents get lost, numbers get transposed on invoices, etc. Accounting software excels at organizing and storing data. It also simplifies the process of finding the smallest details quickly.
Not as capable as you could be at tracking inventory.
What do you currently have in stock? What’s selling well and what isn’t? If you can’t answer those questions without a lot of digging and manual counting, you may be losing money because you’re either carrying excess stock or you don’t have items available when customers want them. Here again, the organizational and reporting capabilities of accounting software can help you maintain control of what you sell.
Risking frequent unpaid invoices and bills.
Paying bills and tracking the progress of unpaid invoices manually requires exceptional filing and scheduling systems. And you’re well aware of how late payments from customers and vendors adversely affect your company’s cash flow. Not only can you easily create and customize the sales and purchase forms you need using accounting software, but you can get an instant, real-time view of what’s due and when.
Spending way too much time on payroll processing.
You may also be making manual errors on your payroll taxes, which can cost you money in penalties from taxing agencies. Automate your payroll, and you’ll both save time and avoid mistakes.
Missing out on automated reporting.
Are you able to even compile reports manually? Maybe you’re using Excel or a paper ledger. Whatever your current method is, it can’t compete with the pre-designed, customizable report templates that are standard in accounting software. Instant reporting equals better business decisions. When you’re not spending time unnecessarily on your company’s money management, you have more hours in the week to spend on what you’re really good at, what you had in mind when you launched your business: making it grow. Let us help you get started with an accounting solution so you get that valuable time back.
Erin Baas is a Client Advisory Services Director at Lutz. She began her career in 2002. She provides business accounting and advisory services to a wide variety of industries with a special focus on private physician medical practices and family office administration.
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