The United States of America alone has 30 million businesses with revenue of over $12 billion. Because the market is booming at an all-time high and giving rise to even tougher competition, it is important to understand the latest trends and tips for accounting that will help you sustain.
As a small business owner, you’ve got a lot on your plate already: working hard to get new clients, training employees to perform better, and always strategizing to operate better.
Budgets, receipts, and maintaining trails of revenue over sales, at times, are the last things you invest your time into. But, on the contrary, these are the most important things that one should pay the most attention to, as success is directly proportional to the amount of profit your business makes.
In 2020, the economies are booming, but fears of global recessions, increased tariffs, and political turbulence are complicating the outlook of small business owners toward the global market.
To uphold the business throughout the testing times, we have collaborated on a list of the latest trends and tips that you should bookmark and include in your future business strategy.
Accounting for Small Business - Trends & Tips
Location Unbound Employees are More Productive
Earlier, business owners and managers strongly believed and practiced that employees are only productive in the office location. However, researches prove that location-unbound employees, on average, were more productive throughout the day.
Saved energy and time from commuting to the office, and fewer distractions helped them put more effort into work. It is acting as a wise man’s trend to let your employees work from home. Also, it saves your extra expenses on electricity, water, and other operational costs.
Concentrate on Every Return
We’re not saying this is just a trend. It is the “trend” that businesses have been following to sustain themselves since their very birth. When a business owner makes any investment, he also aims to generate the best possible revenue to cover his costs.
ROI is the most important metric for businesses at every stage. It is the key profit indicator often used by businesses to determine earned profits over expenditures. It is an absolute measure of business success over time and a forecasting measure.
Well, the question now arises: How do you track business expenses and mark profits you have made? This accounting is simple. To manage accounts, you can always opt for online bookkeeping. It is simpler, convenient, and hassle-free.
Also, most small business accounting software on the market offers automation, expense management, expense tracking, and other features empowered by Artificial Intelligence.
Organize and Record Payments
Well, the secret is out and open now. The only effective way for efficient small business accounting is its organization. The amount of money a business makes or saves is directly proportional to how efficiently it is able to keep track of the flow of cash and funds.
That is why most businessmen are swiftly shifting towards small business accounting software. The software's interactivity, powered by AI, acts as an employee who is virtually tabulating every bit of accounting without you emphasizing every detail and investing hours.
The top accounting software influences everything starting from payments to budgeting and strategizing. Therefore, impacting the core of your business. And there are free and open-source accounting software options available for those who want to explore software solutions without spending much.
As a businessman, you should be spending time increasing productivity; for everything else, there is software available with complete intelligence to make your jobs easier. Make a wise choice!
Reconsider Fixed Cost Commitments
Flexibility will be crucial in 2020 and the years ahead. Long-term commitments for the business will be a one-time expense, giving value for longer durations. Such investments reduce monthly expenses, helping your business sustain with higher cash at the end of the month.
For example, almost all subscription-based accounting software for small businesses offers discounts when you take long-term deals. Therefore, instead of opting for a monthly subscription deal, one can easily consider taking long term packages to avoid frequent payments and outflow of cash.
It even ensures you can utilize services even when your business is not making similar profits to carry out equal expenditures in a period.
Paper Invoices are Obsolete Now
Whether or not you’ve considered it before, customers tend to support companies that are concerned about going green. Not just for the sake of the environment, paperless billing has a lot more benefits associated with it for your business too.
So, here are the benefits of digital billing.
- You almost save 2-3 hours a day. No more manual data entries, no more piles of paper trail, and no hassle of maintaining filed records manually.
- Accounting software is safer, convenient, and smart. These cloud-based invoicing software for small businesses are 99% secure from any theft and losses as they let you save your data on the cloud. It also makes access convenient and processes user-friendly.
- Such small business accounting software is automated and accurate. To manage the balance sheet accurately, simply add numbers to the already saved invoices and files of expenses, returns, and more.
Automate Payment Reminders
Some recent reports of 2019 suggested that almost one-third of small businesses still owe $20000 or more on deliverables to their clients.
Tracking down clients constantly for invoices is not only annoying but also slows down your cash flow. It has been pretty evident that the more time a company invests in chasing clients for payments, the less it can spend on building business. To avoid such a waste of precious working hours, you can set up an automated call or message reminder to follow up with clients and remind them of their dues.
Such automated payment reminders can be customized to give a more personal yet professional reminder to clients for payments. It is more professional and appreciated than business executives calling again and again for payments.
Online Payments
Consumer behavior studies conducted in 2019 have suggested that digital payment methods are taking the entire world by storm. Digital Payment is the modern way of monetary transactions to get rid of paper-based currency usage. It has changed the patterns of consumerism of both online and offline buyers, impacting enterprises and small businesses. Therefore, moving towards accepting online payments is a win-win situation for all clients and businesses.
Holding key advantages, you save time and get paid faster by not dealing with transactional worries and waiting for payments. Also, it gives your business an even more professional business outlook when you accept payments online. Technologically smart customers expect businesses to accept online payments as a basic rule.
Create Budget Projections
Good financial health is the key to a business’s long-term success. Just because your business is earning sound profits today does not mean the situation will stay the same throughout. Each business faces its own ups and downs.
Financial projections, thus, can help you estimate and project where your company will be in the following years. It also helps you figure out where to invest earned revenues or take primitive measures to keep your business stable.
Automate with Small Business Accounting Software
Even if you are managing your business accounting yourself for long and have become super quick and expert, accounting software is still helpful for your small business.
They make the job pretty much easier by automating the entire process and tools to help you track, send, and invoice. They can also generate financial reports to help you track the overall activities of your business.
Keep a Close Eye on Your Inventory
A closer eye and precise detail about inventory will help you have better control over your business. It will help you optimize expenses and keep processes running smoothly.
Record keeping is the best way to ensure accurate inventory management. Make sure that your accounting software also gives you access to inventory management with other features like expense management, time tracking, and more.
Not only this, but expense management can even help you to identify your useful and unused assets and give you a clear picture to strategize your next move.
Forecasting the Trends
To be a successful business owner, you need to understand that things may change in the future. Ups and downs affect the stability of cash flow. But the only thing that has to stay constant is your will to grow.
Therefore, financial statements, projections, and estimates can help you forecast and predict some of your activities for the longer term. Armed with acute information, you can make wiser decisions on investments and expenditures and anticipate finances.
Forecasting the future of a business can be tricky. Given all the relevant factors in modeling future performance, the score for accuracy might not be exact at each given time. But with tried-and-tested methods, powerful use of accounting software can help you predict accurately and supercharge your business performance.
Accounting software for small businesses understands the varied needs of small businesses, such as workflow, approval process, invoice process, and communications. Therefore, completely customized invoice software for small businesses with automated invoice generation, payment reminders, time tracking, invoice approval processes, and more will make accounts management easy.
Small Business Accounting FAQs
By now, you’re in absolute coordination and aware of how swiftly small business accounting is going to change in the upcoming days. But, it is also important to understand the core need for efficient management of accounting in small businesses so as to help your business sustain and grow.
We have answered some of the most commonly asked crucial questions about small business accounting. Continue reading to find out the solutions to accounting's basic needs.
Do you need an accountant for a small business?
Small business accounting is not very complicated if you are aware of generic business laws, management of cash flow, and analysis. A small business invoicing software, on the other hand, can be brought into use to simplify the complexity of accounting.
Here is how small business invoicing software acts as an accountant for small businesses.
- Create invoices with pre-designed templates
- Separate sheets to record expenses and revenue
- A streamlined invoice approval process
- Online time-tracking
- Online expense management
How much does it cost for an accountant for a small business?
A typical accountant for a small business costs around $150-$400 an hour, depending on the complexity of the tasks, the size of the firm, and the location.
Whereas you can find a cost-friendly alternative to it in the form of accounting software for small businesses. A small business accounting software acts as a virtual employee for the company by taking care of all the duties of an accountant. It helps you generate invoices, track payments, manage sheets of the balance sheet, keep track of purchase orders, and more with intelligence and automation too.
Why is automation important in business?
Automation in small business accounting is nothing less than a boon to the business cash flow. Automation, as the name suggests, is making complex tasks easy and streamlining the entire workflow with intelligence.
Small business accounting software helps you automate most of your tasks, such as invoicing, approval processes, and workflow, to save time and boost productivity.
Wrapping Up!
You have read the tips, trends, and FAQs of small business accounting. So, you are now in a position to select the best accounting software that matches your needs.
If you don’t have much time to explore many options, you can try the top accounting software, such as Banana Accounting, Invoice Meister, Jewellery365cloud, Vyapar, etc.
And, if you have tried accounting software, do post a review here!
