Don’t Fall Behind: How To Simplify The Accounting Process

using an online software helps you manage your funds
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How To Simplify the P&L Process And Manage Your Money

Small business owners don’t often get excited about spending hours on accounting. Having the right tools to simplify profit and loss reporting for your business is essential to spending time on more important tasks.

If you’re doing a lot of this work on your own, we’re here to break down the steps so you can streamline this process and never get behind again.

A quick Google search will reveal numerous apps and software packages available. To make your accounting processes easier, we need to understand which features are important.

Then, you’ll be able to select the option that works best for you and your business.

What A Good Software Can Do

The primary reason for using a software package to manage your finances is the ability to maintain records from all your accounts in a single application.  

Some of the most commonly used features include:

  • Automatic transactions import or data downloads from

your financial institutions

  • A built-in workflow to help keep your financials properly categorized
  • A dashboard showing important information

on one screen

  • Storage for supporting documents
  • Search capabilities

Keeping everything in one place and all your data organized makes a huge difference to your P&L. You won’t have to hunt for data to get started on your accounting process.

Linking Accounts

The first step to setting up any new application is linking all of your accounts.  The most popular applications allow you to link your checking and saving accounts, credit cards, loans and more.

The available financial institution with which you can link directly will depend on both the software package you choose and the options for linking allowed by your financial institution.

Most large banks, investment firms, and lenders have some method to link your account with the more prominent software vendors in this arena.

If you use a local or smaller financial institution, their online banking tools may allow you to download transactions and import them into the software.

This process may result in a few extra steps, but the ability to import tens or even hundreds of transactions will save you hours of manual entry.

Data Automation

Well designed applications will help guide you toward what needs to be done.  Automating as much of your data entry and transaction classification is the key to staying up to date with your P&L.

Automating the data entry through direct links or importing data from your account providers will save time and reduce entry errors. The right software will also remind you when an account’s transactions have not been updated prompting you to initiate a transaction import.

Other applications will remind you when uncategorized transactions need to be reviewed so you can add the appropriate category for accurate reporting on your financials.  

Good software packages will learn how to categorize common or repeating income and expense transactions, reducing the need for your manual input (see: Machine Learning).  Not all software packages are alike, so automation features and reminder options will be dependent on the software you choose.

Maintaining Records

Maintaining additional records for tax purposes as well as general business purposes can also be simplified with the right application. Rather than keeping a shoebox full of disorganized receipts, the right software application makes it easy to store files.

Maintaining electronic records does take some extra work, but many applications allow you to import documents.

More advanced apps include OCR technology (Optical Character Recognition) where the software converts parts of the image to text. This works by extracting transaction descriptions, dates, and amounts to automatically fill in details without any manual entry.

Come audit or tax time, all of your supporting documentation is digitized and easily accessible.

Search Capability

Even small businesses today have numerous bank and credit accounts with hundreds of transactions processed, so a robust search capability will save many hours of time and headaches.  

Validating if an invoice has been paid or if a payment has been received is not always easy when records are stored in multiple locations. Having the ability to do a quick search across many accounts at one time is a requirement in today’s electronically transacted business environment.

And if you ever find yourself in the middle of an audit, you will thank your lucky stars you implemented this amazing technology!

If you’re ready to stop falling behind on your income and expense tracking, Arrow Cloud Bookkeeping can help you simplify your process.  

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