The United States of America is alone rising with 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 in your platter 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 acting as an agent to complexify the outlook of small business owners towards the global market.
To uphold the business throughout the testing times, here we have collaborated a list of 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. But researches prove that location unbound employees, on average, were more productive throughout the day.
Saved energy and time from commuting till 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 since very birth to sustain. When a business owner makes any investment, he also aims at generating 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 expenditure. It is an absolute measure to assess business success over time and forecasting measures.
Well, the question now arises, how to 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 in the market come with automation, expense management, expense tracking, and more 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 making a swift shift towards small business accounting software. The interactivity of the software, powered by AI, acts as an employee who is virtually tabbing every bit of accounting without you emphasizing on every detail, 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 the utmost crucial aspect in 2020 and years ahead. Long-term commitments for the business will be a one-time expense, giving value for longer durations. Such investments reduce your monthly expenses helping your business sustain with higher cash at the end of the months later on.
For example, almost all subscription-based accounting software for small businesses offer 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 at the times when your business is not making similar amounts of profit to carry out equal amounts of expenditures in a period.
Paper Invoices are Obsolete Now
Whether or not you’ve considered before, but 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 the paper trail, and 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. Simply add numbers to the already saved invoices and files of expenses, returns, and more to accurately manage the balance sheet.
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 it also slows down your cash flow. It has been pretty evident always, the more time a company invests in chasing clients for payments, the less it can spend that time on building business. To avoid such wastage 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 the digital payment method is taking the entire world by storm. Digital Payment is the modern way of the monetary transaction to get rid of paper-based currency usages. It has changed the patterns of consumerism of both online and offline buyers, impacting enterprises, and small businesses together. 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 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. Your business is earning sound profits today does not mean the situations 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.
The best way for accurate inventory management is its record keeping. 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 in the lists of successful business owners, you need to understand things that may change in the future. There are ups and downs affecting 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 your forecast and predict some of your activities for the longer term. Armed with acute information, you can make wiser decisions on investments, expenditure, and anticipate finances.
Forecasting the business future can be tricky. The score for accuracy might not be exact at each given time, given all of the relevant factors in modeling future performance. But, with tried and tested methods of powerful use of accounting software can help you predict accurately and supercharge your business performance.
Accounting software for a small business understands the varied needs of small businesses such as workflow, approval process, invoice process, and communications. Therefore, a 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 upcoming days. But, it is also important to understand the core need for efficient management of accounting in small business 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 the basic needs of accounting.
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 for an hour, depending upon the complexity of tasks, size of the firm, and 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 order, and more with the 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.
A small business accounting software helps you automate the majority of your tasks like 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 a lot of options, you can try the top accounting software such as Banana Accounting, Invoice Meister, Jewellery365cloud, Vyapar, etc.
And, if you have tried an accounting software, do post a review here!
