Manual accounting spreadsheets (like Microsoft’s Excel) are not enough if you plan to expand past startup stage. Here’s how online accounting software can save time and money and play a central role in growing your business.
Are you self employed or a small business owner with a growing business? Are you still using an Excel spreadsheet to manage your finances?
Scaling your business
While an Excel spreadsheet can let you track your income and expenses, it doesn’t give you a holistic real-time view of how your business is tracking. Knowing what shape your business is in will give you insight into how and where you should grow it.
In order to plan for business growth, you need to know how your company’s value has changed over time while also outlining your company’s expenses, wages and taxation information – which just isn’t possible with a regular spreadsheet. Similarly, if you plan on hiring more staff, you’ll need a system that can manage and automate necessary tasks like payroll.
Moving away from spreadsheets – a case for accounting software
In the early days of a startup, spreadsheets are often enough to get the job done. But if you want to expand your business, there will come a time when they’re no longer enough – they require far too much manual effort and offer limited financial management capabilities.
Reasons to consider making the shift include:
- You need confidence that your system can handle your business expansion;
- You want to hire more staff;
- You need financial information at your fingertips;
- You’re using workarounds because your current system doesn’t do what you need it to do; and
Inventory at a glance
An Excel spreadsheet can be set up with almost any type of data but once you have more than one employee working with you, a paper system will not be able to provide you with a good audit trail. An automated system can help you keep inventory records with descriptions of what you are selling and also remind you when you are running low. It can also track orders, works in progress and jobs to help you avoid costly mistakes.
A good system should provide multiple permissions for staff and back up your data everyday. It should also automatically download and reconcile bank and credit card transactions.
Keeping customers happy
Customers are the lifeblood of any small business. Switching from a manual financial management system to online accounting software is just one way to maintain good relationships with current customers while staying on the hunt for new ones.
Some features that will help grow your business include:
- Tracking customer records so you can see what they buy, how often they buy and when they make buying decisions.
- Simplifying payments by accepting online and mobile payments from credit cards and debit cards, allowing customers to pay their invoices on the spot.
- Syncing to data from apps like PayPal.
- Tracking customer purchases, so you don’t need to rifle through the paper trail.
Hiring more staff
Not only will moving to a more sophisticated financial management system keep your customers happy, it will also help you manage a growing number of employees.
Online accounting software can help you manage staffing by:
- Allowing you to configure pay schedules and employee details like pension contributions, pay rates and holiday leave accrual to match your payroll.
- Automating pay slip notifications and leave calculations.
- Adding timesheets directly into your pay run.
- Handling multiple bank accounts.
- Managing taxation responsibilities.
- Submitting real-time PAYE (RTI) data to HMRC.
- Generating P45s and P60s for staff.
It’s common to turn to Excel when starting a small business. But as you grow, online accounting software will streamline processes and give you insight into your business that can ensure mistakes are minimised and profits increased. A good system should be able to grow with your business and support your needs through every phase of expansion.
For more information on switching from Excel spreadsheets, check out the Street Style Surgery case study.
To see how online accounting software can help you manage the finances of your growing business, sign up for a free trial with QuickBooks.