Whether as individuals, families or businesses, how we manage our finances is one of the most important parts of our livelihood.
When we think of finances, we often relate it back to our personal experiences, such as managing our private savings, or evaluating whether our budget can accommodate the financial commitment of periodic mortgage payments when purchasing a home. However, when it comes to managing the financial side of a business, things become significantly more complicated.
As a business owner, your primary goal is to ensure that your income is greater than your expenses and that you have adequate cashflow to pay your liabilities. You are also constantly making decisions to ensure that your business is heading in the right direction. Having confidence in your business decisions is reliant on accurate financial data and proactive financial advice, having both of theses working together is rare for a large portion of SME’s.
This is where traditional methods of bookkeeping fall short of modern business requirements and automated tools pick up the slack. While automated financial technology, such as cloud accounting, has existed for some time; a clear understanding of how to match these various technologies to the needs of individual businesses is where skilled accountants prove their worth.
So, what are you really missing out on by not utilising modern technology based accounting methods for your business’ finances? That’s what we’re here to find out.
Anyone who has had to deal with the manual data input and time consuming process of conventional bookkeeping knows, it can be an arduous task, especially once it begins eating into time that could be spent with your family or on higher value tasks in your business needing of your attention. One solution to this comes in the form of cloud accounting and financial management services.
When discussing the benefits of these systems such as real-time connecting tools, Next Level Accountants, an established team of digital accountants in Geelong, emphasised the benefits of an always up-to-date financial system. This not only gives you a snapshot of business performance in real time, but also provides meaningful insights to assist in decision making such as:
- Monthly Profit and Loss actual vs budget
- Gross Profit margin performance
- Recommendations on cashflow improvement
- Clear visibility on liabilities and other commitments
This, coupled with the time saved through manual data entry and human error, makes the automation a fantastic platform for boosting the efficiency and effectiveness of your business’ financial strategies.
Human error is universal.
Regardless of how proficient we are at a specific task, eventually mistakes are likely to happen, especially when you are also obligated to maintain the smooth operation and growth of a company. While this may be excusable in most circumstances, having inconsistencies within your bookkeeping can have a highly detrimental trickledown effect when allowed to stay unobserved.
Automated real-time financial services are inherently free from the majority of problematic factors associated with manual management, which means that there is a significantly lower likelihood of errors occurring or being overlooked. Given the advancements in financial technology that are now being utilised by businesses across the accountancy spectrum, issues are easily picked up and dealt with in ways that are highly impractical through traditional means.
For a business that necessitates a considerable amount of travel, or one that has multiple subsidiaries that require access to financial information, the archaic paper-based systems that are synonymous with traditional bookkeeping don’t offer sufficient ease of access. Having your consistently updated financial information stored in one, easily navigated digital space makes for simple transactions of information regardless of location.
In any field or industry, there are always going to be benefits from utilising more robust financial management systems. It can appear daunting to transition from tried and true methods into newer technological advancements, but with an abundance of digital services at your disposal, the perceived difficulty is far outweighed by the ease and efficiency offered.