According to a report by Small Business Advocate, of all the companies in the US, 99.7% are small businesses, and that number’s not at all surprising.
Small businesses — also known as small and medium-sized enterprises, or SMEs — are the backbone of any economy, but they also face some of the most difficult challenges in their day-to-day operations. Challenges such as targeting new customers while retaining current ones, raising brand awareness, finding competent and motivated employees and many more are a daily struggle. And they have to do all of this while keeping a finger on the pulse of the current trends and technologies in their industry.
Still, one of the biggest problems businesses face is cash flow issues. While sometimes that’s a result of economic downturn, more often it’s caused by poor planning within the company.
That’s why professional accounting software for small business is in such high demand. Many savvy small business owners are realizing that in order to ensure steady growth of a business, they must utilize professional accounting help.
50% of businesses fail within the first five years, and only 33% survive the first ten. So for those small business owners that want to maximize their chances, implementing the best practices for managing your funds is a key part of the process.
Luckily, with the advances in technology, accounting software has become much more accessible to small business owners, providing most of the same functions as professional accounting help.
How Your Business Can Benefit from Accounting Software
Being on top of your business’ financial information is one of the main factors of business growth. Businesses rely on the general ledger to capture and categorize all of the different transactions that happen daily, including the sales, expenses, assets, equity and much more.
With modern accounting systems, small businesses are able to simplify and streamline otherwise complex processes that go into managing accounts. The software solutions that are available today are very adaptive, as they can be customized and scaled to meet the individual requirements of any business.
To accommodate the needs of different types of businesses, accounting software solutions offer a diverse range of features, such as billing management, distributed order management, payment processing and supply chain and inventory management, just to name a few.
Here are a few of the benefits you can expect when using accounting software for SMEs:
- Avoid penalties and take advantage of discounts by having full control over your Accounts Payable, and make sure you get paid in time with enhanced control over Accounts Receivable
- Gain new levels of insight into your cash flows and payment processes
- Track all transactions with seamless scaling and implementation of new products or services, and find new ways to improve overall efficiency in the process
Cloud vs Local
While many companies still opt for local accounting software solutions, with new innovations in the cloud-based software industry, it’s become more apparent than ever that the cloud is the way of the future in the accounting software industry. Certainly, at the very least, as far as small business is concerned. But what makes cloud the better option for SMEs?
First off, it’s all about mobility and ease of access. You can easily access the software from anywhere using any device, tracking data and even making important changes on the go. This level of access has never before been available, and it’s made it very difficult for businesses to ignore the benefits that cloud-based solutions can bring to their business.
Of course, there is the problem of connectivity – without an internet connection, accounting software can’t function. So while there’s a very slim chance of your cloud-based software provider’s servers going down, there is still a chance. On the other hand, on-premise solutions have their own set of potential problems that can arise, including software malfunctions that are extremely rare with a cloud-based solution.
Another big benefit of cloud solutions is the fact that it doesn’t require a big commitment. Compared with local accounting software solutions, cloud-based software is usually based on a subscription model that’s relatively easy and affordable to install. Furthermore, you can oftentimes test out the software free of charge before choosing it, which will never be possible with local solutions that require an upfront commitment and investment.
Of course, you have to take into account that with a subscription model, you pay for the software for as long as you use it, whereas the costs for local software tend to get lower after the initial onboarding phase. But maintenance is required for local solutions as well, so both options produce expenses in the long run.
Finally, the reason why cloud-based accounting software is so popular among small to mid-sized enterprises is the fact that it’s very user-friendly. These systems are usually designed with small business owners in mind, so they use simple terms and very easy-to-use interfaces, which means that even people with limited knowledge in accounting can learn the intricacies of the software in a short time.
Both local and cloud-based have their own advantages and drawbacks, but because of the ease of use and core functionality, that’s more than enough to get the job done. All of this adds up to cloud-based solutions being probably the better choice for small businesses in most cases.
Here are a few cloud-based accounting software solutions that can work well for SMEs:
Acumatica provides a wide range of features in their top-class ERP solution, and its accounting application is no different. While Acumatica caters to businesses of all sizes, small businesses can still make use of their versatile and intuitive cloud-based software that’s jam-packed of terrific features, such as its advanced transaction management system that allows you to accurately monitor your financial operations while maintaining complete control of your financials.
The single shared database environment allows you to see all the information instantly, and numerous analysis and tracking tools help you stay on track of all your operations.
FreshBooks was designed with small businesses in mind, and it clearly shows. The intuitive and easy-to-use interface makes accounting tasks such as billing very easy to learn, so even business owners with little accounting experience can use it with ease.
You can automate various time-consuming tasks such as following up with clients or organizing expenses in just a few clicks, and since it’s cloud-based, you always have access to all your information and processes no matter the device you’re using at that moment.
QuickBooks is another intuitive and simple, yet very powerful accounting software for SMEs that provides easy online access, extensive tracking options and many other important features for small businesses.
With QuickBooks, invoicing, accepting and sending payments and even bookkeeping all become much simpler to manage. The software also seamlessly integrates with a lot of other software solutions, so you don’t have to worry about working on multiple systems for different parts of your business.