If you own or manage a small business, it’s crucial to track your finances carefully and make sure you keep your business in the black. When this starts to become too challenging or time consuming, it might be time to look at online accounting solutions.
The Importance of Good Accounting Structure
Every efficient business needs a solid accounting structure. Very simple Canadian businesses can probably get away with a DIY model or rely on simple Excel tricks to manage their accounting. However, for everyone else, DIY accounting is a major drain on time, mental energy, and can even be a security risk.
One reason cloud accounting works so well is because it integrates nicely with your workforce, client relationships, and security needs.
With a good cloud-based accounting system, it is easier for you to:
- Create and send automated invoices
- Receive payments faster
- Set up recurring sales receipts
- Instantly calculate income, cost of goods sold, sales tax collected, and more
- Create a budget and track expenses
What You Should Look For
When online accounting got its start in the 1990s, the first generation of software products were difficult to use. They tended to offer more features than most small businesses needed, and often relied on intense jargon familiar only to professional accountants.
Instead, Intuit one of the first pioneers of the industry went the other way. It offered a smaller, focused selection of simple items accounts payable, chart of accounts, invoicing, receivables, and other basic features. Ideally, companies could just pick up and implement the program on the run. Your software should minimize any headaches and avoid wasted time.
Globally, the top-selling online accounting software, QuickBooks, has more than 1.5 million online subscribers. This is a pretty good sign that its programs can fit lots of different business models.
Depending on your own small business needs, it’s important for your online accounting program to have the right kind of functionality.
It can be easy to overlook the importance of point of sale systems for small businesses, especially when online vendors keep growing. The reality is that a lot of businesses still heavily rely on in-store purchases, warehouse inventory, and managing on-site staff.
Such companies need an accounting software that can:
- Manage vendors and inventory
- Sync the register with banking
- Automate back office management tasks
- Process credit cards seamlessly, even when the internet is down
Not all small businesses need to manage employees. However, those that do should ensure they have complementary functions in their accounting software, including the ability to:
- Pay employees more efficiently (ideally in minutes)
- Integrate with other accounting features
- Automatically calculate and process tax obligations
Tax time can be particularly stressful for small business owners. This is partially because there is a lot of information to process and steps to follow, and also because many small business owners aren’t experts in accounting or tax law.
A good online accounting software should:
- Automatically break down sales tax collection figures
- Quickly prepare returns
- Run tax reports
- Maintain real-time tax balances