Why Digital Accounting is the Way Forward
With the business world moving increasingly online, it’s no surprise that bookkeeping is steadily shifting into the virtual sphere as well. Digital or software accounting is helping businesses all around the world to manage their finances. If your small business hasn’t taken the leap yet, you may be wondering why so many others have invested in this new form of money management.
What is software accounting?
Software accounting means that instead of using spreadsheets to track your income and spending, a computer programme will do it all for you. This means no more manual calculations and scrambling for invoices when tax time rolls around. Many types of accounting software are now available online as well, meaning you’ll pay a subscription fee each month to use the service.
Why is software accounting better?
Software accounting has many benefits to offer your business and it’s likely going to become the norm moving forward. Here are some reasons why:
Security
Cybercrime is more widespread than ever, with hackers targeting individuals and businesses alike. Using spreadsheets leaves your business’ financial records at risk, as they can easily be accessed by criminals or destroyed by viruses. Accounting software is well equipped to fend off digital attacks and uses cutting-edge technology to protect your sensitive information.
While it might seem riskier to have all your information on the internet, you’re better off using a service that has a sophisticated defence system than keeping your files stored locally. If your computer is connected to the internet, hackers can still access your hard drive, so it doesn’t make files any safer.
Updates
The digital world is constantly changing and updating, meaning your current accounting solutions are likely to become out-of-date quickly. Online accounting software will update regularly and take into consideration any changing regulations. Installing software such as using an esignature API onto your computer is still better than using just spreadsheets, but you won’t benefit from the constant improvements that online software offers.
Should anything change with regards to VAT or tax, your online software will intuitively know how to make those changes. If you’re working with spreadsheets, you’ll have to stay on top of this yourself.
Tax Compliances
Digital accounting offers numerous benefits when it comes to tax-related matters. By leveraging digital accounting tools and software, businesses can streamline their tax processes, enhance accuracy, and ensure compliance with the specific requirements of different state sales tax regulations. Digital platforms provide automated features for tracking sales, recording transactions, and calculating sales tax owed. They can integrate with e-commerce systems, point-of-sale solutions, and other business software, allowing for seamless data synchronization and reducing the chances of human error. Moreover, digital accounting systems provide robust reporting capabilities, generating detailed sales tax reports and facilitating the preparation of accurate tax returns. Therefore outsourcing accounting services with Accounting Prose can be highly beneficial when it comes to handling taxes, ensuring accurate financial records and expert guidance for tax compliance.
Online Transactions
The world of eCommerce shows no signs of slowing down and it’s likely your business is already at least partially online. It makes sense to move the way you track your finances into the digital world as well if this is how your money is coming in. With the right accounting software, you’ll be able to automatically track invoices as they’re paid. This means you won’t have to manually input data, as the software can do all this for you. It will also keep all your tax calculations in the same place, which is perfect when most tax returns are now done online as well.
Is software accounting right for my small business?
All businesses can reap the benefits of accounting software. Even if you’re a freelancer and work alone, the right software can take a weight off your shoulders, allowing you to focus on providing products and services to your customers.
