5 Key Benefits of Accounting Software when Self Employed

As a self-employed person or small business owner, sing a spreadsheet to manage your accounting may once have sufficed in the initial stages of running your business.

But as your company grows, the following occurs: your financial data becomes increasingly complex, you're adding on new accounts and you may be bringing on additional staff. You now require a scalable solution-and you're wondering if it's time to transition from spreadsheets to accounting software.

If you're still on the fence, and unclear about the value that an accounting software brings to your business, here are five key benefits you'll reap if you make the switch:

When you’re working with spreadsheets, the tedium of accounting data entry means that you may find it all too easy to stow away your receipts and invoices, and put off dealing with these until the end of the month or a financial quarter. 

Yet, this can also result in unnecessary slip-ups such as lost receipts and invoices. You may also fall behind on being paid, or face other problems that can result in a cash flow gap for your business. 

Here’s where accounting software comes into the picture.

The ease of use that a software provides means that keeping track of your expenses and paperwork can be done in a few quick steps—you’ll only have to snap a picture of your receipt, and the software will record the data in your accounts. Data entry for other transactions, such as payments or bank withdrawals are also automatically recorded. 

When your data entry is kept up-to-date, you’ll get an accurate overview of your business finances at any time—which leaves you better placed to make informed business decisions. 

Given that nine out of 10 spreadsheets (88%) contain errors, it’s unsurprising that the number of errors can easily add up if you’re mostly working with spreadsheets.

The problem is further compounded by human errors that inevitably occur with manual data entry or calculations. With accounting software, these errors are minimised as the software performs the calculations, leading to greater accuracy.

Remote work arrangements are fast becoming the new norm across many sectors and countries.

A 2019 survey by social media management software Buffer reported that 99% of respondents said they would like to work remotely at least some of the time for the rest of their careers. And within the UK, the Office of National Statistics estimates that in 2020, half the workforce are working remotely.  

Increasingly, mobility and portability are features that businesses seek out in the tools that they use—and these are benefits that an accounting software offers. The software will enable small business owners and distributed teams to perform a variety of functions—such as approving payments, recording expenses and importing customer details—across multiple devices and locations.

Analysing your data is a crucial part of running your business. You need to have a clear idea of how your company is doing, understand what’s working or not working, and analyse the financial and growth patterns of your company. 

Your accounting reports provide a snapshot of how your business is performing.

Yet, creating these reports on spreadsheets is often a time-consuming process; you’ll need to consolidate the data, and input the formulas in order to generate a report. Accounting software comes with built-in reporting and analysis tools, thereby saving you time and effort as you’ll be able to generate reports automatically.

Fretting over missing business receipts or invoices will become a thing of the past when you use accounting software.

Your data will be stored and organised within a single system, so you can easily search up past invoices or payments using the invoice number, date or client name. 

The software also centralises your business processes; you’ll be able to manage your payroll, inventory, customer relationship management and more within a single system. It’s a more cost-effective and convenient option, as you won’t need to purchase multiple tools to handle different aspects of your business.