Like it or not, the condition of your financial records may determine whether your business lives or suffers a tragic death.
Well, that’s one way to start an article. Seriously, we only just met.
Joking aside, proper bookkeeping is vital to your business’s survival. Forget to make a payment on time, and your credit takes a hit. Neglect to remind a customer about an overdue bill, and now you don’t have the cash to stock up on inventory. Lose track of your receipts, and then you miss out during tax season.
Almost half of small business owners agree that accounting is the worst part about owning a business. We get it. Bookkeeping is no fun. But you know what is fun? Starting and growing a profitable business—and that’s nearly impossible without disciplined bookkeeping.
To keep your business profitable, we’ve identified 4 simple bookkeeping software features. These features mitigate your bookkeeping pain and help you control your business’s profitability. Read on if no pain and lots of gain sound at least marginally appealing.
1. Detailed Reports and Expense Tracking
Financial reports like profit and loss, balance sheet, tax summary, customer statements, and accounts receivable give you a quick and easy x-ray of your business. Not only does this give you both a high-level and microscopic overview of your financial health, but it also makes tax season a breeze.
Rarely do impulsive business decisions lead to profitability. By having on-demand insights into your finances, you’ll know when the business is on the right track or if you’re headed in the wrong direction. Reports empower data-backed decision making, and this transforms business strategy from impulsive to deliberate.
With real-time expense tracking, you’ll know exactly where your money is going. And with software like Sunrise, you can even automatically import your expenses from your bank account and categorize them. Data like this could inform you that employee travel is getting out of hand, you’re underbudgeting for office parties, or the cost of goods sold is steadily rising—empowering you to take immediate action to keep the business profitable.
You can’t accurately budget if you don’t know what you have and what you’re spending. With reports and expense tracking, you’ll have a complete picture of your financial resources and expected expenses. This information will help you create reliable budgets and potentially enable you to invest more in specific areas of your business. A profitable business without a budget is just a happy accident—and accidents aren’t maintainable in the long run. With data to create trusted budgets, you’ll have the financial roadmap you need to lead your business to profit.
2. Smart Invoicing
Most bookkeeping software, at a minimum, allows you to create and send invoices. However, some of the more superior invoicing features are the ones that dramatically help when it comes to saving money and maintaining profitability.
First, the ability for customers to pay your invoices online with credit cards accelerates the payment cycle. Faster money in your account means more wiggle room for reinvesting revenue. Plus, smart invoicing software lets you see all your overdue invoices so you can send your customers friendly reminders. With Sunrise, you can even tack on late payment fees to encourage clients to pay on time.
Another feature is recurring invoices. By setting up automatic invoices, you guarantee clients always pay for your hard work or products. With more advanced solutions, you can add discounts right into the invoice, so your customer sees they’re getting a great deal.
These may seem like minor elements, but combined, they can make a significant impact on your bottom line—not to mention all the hours they’ll save you.
3. Affordable to Use
Bookkeeping software won’t help keep your business profitable if it requires sky-high costs. It defeats the purpose to pay exorbitant amounts of cash for a tool intended to save you money.
Find bookkeeping software that’s affordable and easy to use. It’ll likely come on a tiered pricing plan, so make sure you pay for a tier that comes with the features you need. Don’t get suckered into a prime deal only to find out your cheap solution doesn’t come with the essential functions—this is more common than you’d think!
A profitable business starts with understanding your financial health, and nothing short of hiring an accountant will give you the insights you need like simple bookkeeping software. Yes, bookkeeping is a tedious chore for most entrepreneurs (and likely always will be), but it’s certainly less tedious when you have easy-to-use software. If you’re a small business owner, give cloud-based bookkeeping a try and see for yourself how it can guide your business to profitability.