What Are The Benefits Of Computerized Record Keeping?

Bookkeeping is vital for several reasons. Regular bookkeeping can help manage the financial aspects of your business as well as your finances. To begin with, you can keep track of all your financial transactions such as income, expenses, assets, and liabilities.

Furthermore, you can use this to ensure compliance with tax laws to help avoid penalties.

Moreover, thanks to computerized bookkeeping, this task is easier than ever. If you’re already a regular at bookkeeping, you might want to computerize the process. It offers an infinitude of benefits that you’ll never want to go back to.

However, it means a big change and your worries are understandable. With that in mind, we bring you some of the major benefits of computerized bookkeeping.

User-Friendly Software

Modern accounting software, cloud-based or otherwise, has a fantastic user interface. They are designed so that you can input relevant data without prior accounting experience.

You can easily add every transaction your business incurs. Moreover, every expense will be categorized appropriately, making it easy for you to understand the areas where expense management is necessary.

Not to mention, you can access complex reports at your fingertips. You view the income statement from the current quarter and compare it with that of any other quarter.

With this, your company’s financial position will be clear at all times. Such software is also capable of showing trend movements making it easy for you to understand your business’s progress. Thus simplifying the process behind every decision you make.

In addition to this, the software makes things easier by working on the dual nature of each transaction recorded. In a manual system, you can be forgetful and have to rely on your judgment. For example, raising an invoice will not only record your revenue but also record your receivable ensuring your balances are up to date.

Access to Historical Data

One of the major benefits of computerized record keeping is that all the past data is available to you. Moreover, you can access it at any time with only an internet connection. In the past, you would do the filing manually and spend hours searching for data. The software will save all the information relating to your business that is easy to search for. You can also look for specific information or transactions.

Furthermore, having all your data in one place means:

●       Easy to analyze the trend movements of specific expense accounts

●       Variable cost increase comparison

●       Revenue comparisons

●       Gross profit margin

●       Net profit margin

Simply put, having all of this data stored in the software enables you to forecast your cash flows. Thus, never put you at risk of liquidity issues.

Reporting Done Right

Undoubtedly contemporary computerized bookkeeping software is intelligent. They provide all types of financial reporting.

●       The income statement and balance sheet will tell you all about your assets, and short-term or long-term liabilities.

●       You can be notified about your payables and receivables at the right time. Thus giving you a comprehensive report on the position of your company.

●       With the forecast, you can tax plan more efficiently. You will know beforehand the taxes for the year when it comes to corporation tax.

You will be up-to-date on all payments. Additionally, the payments will automatically be recorded and you can retrieve the details anytime. We all know how essential it is to maintain a healthy relationship with suppliers and overdue payment holds the potential to put it at risk.

Using computerized record keeping, you will have better finance and performance visibility. As stated above, this also covers trends and forecasts. Further, it also makes performance reporting easier, where you can:

●       Use the data to see and compare the performances of your branches in different geographical locations.

●       Furthermore, you can analyze performance by-products as well. For instance, which product is selling the most and generating the most net profit? Likewise, you can break down your revenue into products for a clearer analysis.

 In short, accessibility defines computerized bookkeeping.

Automate Key Areas and Real-Time Bank Records

You can automate key areas such as bank reconciliation, and categorization of transactions. Connecting your business bank account to the software allows you to observe the business expenses and income in real time. Other than this, you can also process payroll through the software and produce the statutory payslips through it. It will further auto-update the payroll records, deducting the payouts from the bank transactions. No more updating manually.

You can send automatic reminders to customers to clear their dues on time.

 

When it comes to the categorization of your transactions, the smart software will not only suggest but allow you to set permanent rules to automatically categorize certain transactions in your required account heads. Computerized bookkeeping software will also keep track of your categorizations and signal to you when you might be making an error.

 

Easy Tax Filing

Accounting software is now integrated with tax authorities. As a result, your sales tax filing, and corporation tax filing, are in one place. The software will calculate all of these tax liabilities for you. Moreover, it will be highly accurate and there’s no room for human error. Your liabilities of sales and corporation tax will be taken care of. Or even VAT depending on your location, sales tax to federal tax all is covered.

Individual Tax Returns

These accounting software also come with an option to maintain your and your employees’ tax returns. Thus enabling the employer to issue tax certificates for their employees. The software is smart enough to distinguish between tax-allowable expenses and otherwise. This makes your self-assessment tax return easy, not only legally but also mathematically.

Conclusion

No doubt bookkeeping is the base and building block of successful accounts and effective financial management. Wherein, it ensures that you stay away from liquidity issues while having visibility on each transaction and not missing the right categorizations.

To computerize your transactions with the help of highly qualified professionals, get in touch with O’Malley & O’Malley LLP. We provide yearly, quarterly, and monthly reporting along with tax returns. Furthermore, we also provide advisory services for businesses and individuals alike.

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