4 Reasons for Your Small Business to Use Online Accounting

Are you a typical small business owner that wants to be more efficient and save money then read on to learn how an online accounting system can help you save time, and make your employees more efficient, and may even streamline one of your businesses processes to save you money. These are just four common examples that may be indicative of your business. Many other examples exist, however this article will was written to solely address these four examples.

Do You Have These Business Problems ?

1. Your checkbook is out of balance and you or your bookkeeping have to contact the bank daily to get the checkbook balance.

2. Your bills are manually prepared in Word or Excel and then re-entered into your computer without any reconciliation.

3. Your estimates/proposals are manually prepared without the benefit of seamless electronic integration to your invoices.

4. You keep your receivables and payables in your head and its hard to get customer and vendor information in real time.

With an online based accounting system, such as QuickBooks, you are able to make changes and have real time access on your notebook computer, or access your accounting information from any web enabled computer, your customers office, your home, your vacation hotel room or virtually anywhere. You can access and read some of your accounting information on your I Phone or Blackberry. Imagine if you are at a customer’s office, and you or your employee has completed a project, then you can promptly prepare the bill and print it out and personally deliver it to the customer. This step in itself, will improve your cash flow for 2 reasons. First, the bill is delivered to your customer in real time, then you do not have to prepare the invoice the next day or next week. The second reason, you may be able to save time, by training employees who are working at clients or on the road, to bill in the field in real time, they can quickly email the bill to to you for your prior approval. Alternatively, you can review the bill as soon as its prepared by your employee in the field or at the customers office, because you have an online accounting system, with wireless internet/WI-FI.

Now it gets better, by using the estimate feature in QuickBooks or any other online accounting system, you can have consistency, accuracy and completeness between the estimate and the final invoice. Two more important benefits is (a) cash flow improvement resulting from quicker billing and (b) the potential to improve the process, you may be able to save considerable time for yourself or reduce the time required by your bookkeeper. Remember, you do not need a wired network when using an Online Accounting system, since youre getting the information from the Internet through WI-FI. And don’t forget the time savings and fuel savings by not having to go to your office to get your accounting information when you are now able to access the information online.

Many small business owners do not reconcile their checkbook balances and they often call the bank to obtain the daily cash balance. Running a business without a properly reconciled checkbook is not a good business practice. By not maintaining a balanced and reconciled checkbook, is a serious weakness in any system of internal control and may provide an opportunity for fraud.

Accounts receivable or accounts payable programs included with accounting software packages are not always used in real time by small business owners. This type of information is very important to successfully operate your business. Real time accounts receivable and accounts payable systems enable you to make business decisions and to properly predict your future cash balances. With an online accounting system you can view from anywhere the accounts receivable and accounts payable balances, in detail or with summary aging reports. Many small businesses to do not use the emailing feature to bill customers from the accounts receivable program.Using the email feature saves time, money(postage) and facilitates cash inflows.

From the accounts payable side, its equally important to know what you owe, in real time. Its important to have a procedure in place to detect duplicate, erroneous bills or fraudulent bills. With up to date accounts payable information, you can review the accounting payable reports to answer a vendor’s questions right over the phone as to why a bill remains unpaid or to inform the vendor when payment can be expected. QuickBooks or other comparable software provide this information in real time to you, eliminating the need for your bookkeeper to list what you owe in an Excel spreadsheet. If your bookkeeper enters the bills into an online accounting system, like QuickBooks Online Plus, then you can assess that same report from wherever you are and select the bills to be sent out. Again, with an online accounting system you can be anywhere and you will know how much is owed. I have only addressed three important areas i.e. cash, accounts receivable and accounts payable. Another important feature, with an online accounting system, is the ability to compare your actual monthly profit and loss statements to a budget. With a budget tool you can plan for next year and the budget is the prospective statement that helps you understand and see future financial problems before its too late. One last comment, QuickBooks Online Plus does not support inventory and purchase orders, thereby preventing manufacturers, retail and distribution companies from utilizing this software, unless you purchase a 3rd party add on module.

There is a significant limitations to QuickBooks Online Plus accounting when inventory is a major part of the balance sheet, the solution is using an accounting system that has remote access, such as QuickBooks Pro or Premier with remote access or a 3rd party inventory add on. This issue has been analyzed in another article that I wrote. Please contact me for a copy.

Another time savings is that your accountant or CPA, can review and make necessary corrections online from the accountant’s computer in real time. So if you have a problem, the accountant has easy access to your accounting information to quickly fix the information, thus avoiding the time for the accountant to schedule a visit to your office.

Just like the way electronic calendars such as Outlook or Google Calendar on our Blackberry’s and I phones have improved and changed our need for secretarial skills, online accounting software may very well change and make easier the way we use our accounting and bookkeeping systems to run a small business.