Here’s why small businesses need an accounting software

Tally Solutions | Updated on: January 17, 2023

• Why opt for accounting software?
• What are some of the key benefits of having accounting software?
• How can TallyPrime help?

An accounting software captures, organizes, and stores your daily business financial transactions. The stored data forms the basis of every report you generate and the decision you make. Today, accounting tools come with several options that let you manage every aspect of your business, such as invoicing, payroll, and inventory.

Why opt for accounting software?

Accounting software is essential for every type of business of every size.

Better business operations

Your business operations are streamlined with accounting software because it promotes organization across your business. When you are working with redundant and impractical solutions such as manual bookkeeping, you lose time and have to put in immense effort to get even the simplest tasks done. With an accounting solution, you improve how your business is operated as you can find the opportunities and weak points in your business.

Enhanced accuracy                     

Accounting solutions are highly accurate. Due to automation and error detection capabilities, they are best for storing and retrieving reliable business data as and when you need it. This accuracy spills over to generating reports that you can trust and act upon when required. Due to the accuracy factor, accounting tools give you a realistic view of your business finances.

Better decision-making

Accounting software promotes better decisions because you cannot rely on your instinct at all times. The software curates and collects business data to generate insightful reports that contain the level of depth you need. You can get a general overview of your business or you can drill down to get particular details of certain aspects such as the payroll, inventory, and credit. Decision-making is key to business success, so a software solution is more apt for making the right decisions.

Advanced monitoring

Accounting solutions provide advanced monitoring, as you can get information about every aspect of your business in a few simple clicks. An accounting tool allows you to slice and dice into the minutest business details so you can ensure any tiny problem is rectified before it becomes bigger. Constantly monitoring your cash flow, inventory, cash management, and more ensures you are on track. A software tool makes monitoring quick and simple.

What are some of the key benefits of having accounting software?

Enables better financial control

An accounting software solution makes financial control an attainable dream as it gives you valuable insights that you can use to improve business decisions. You can hire an accountant to make sense of the business data, but an accounting solution ensures you can take control into your hands by understanding your business thoroughly and evaluating it periodically before making decisions. Accounting solutions are capable of projections and forecasts based on historical data, so you can time your investments just right and reap the benefits of an intelligent software tool that ensures you are on the right path. With management tools a click away, an accounting solution lets you steer your finances properly and in a way that is best suitable according to your business goals.

Optimizes invoice management

Invoice management is a critical part of every business, and optimizing it has many benefits, such as better cash flow. It allows you to see the receivables and payables with ease, so you are aware of payments you owe and those owed to you.

Invoice management enables you to set multiple price levels for different types of customers, such as wholesalers and retailers. When you select the type of customer, the price levels are automatically selected, thereby saving time and effort in manually entering the details. This allows you to keep your profits up while catering to different customers. Invoice management also helps you personalize your invoices as you can add your logo and other important details to create professional invoices. This sends a positive message about your business.

Helps save time

Accounting software saves time through automation. Many mundane tasks, such as making entries in your books, are done automatically with an accounting solution when transactions occur, which saves you considerable time daily. While it may seem like a little time is saved every day, think about the accumulated time that you save by not having to put effort into making entries in your journals and ledgers. You don’t need to recheck the entries you entered because the automation is completely accurate in reliable software solutions like TallyPrime. Automation has another benefit. It frees up resources as you now have more time to tend to other business activities.

Automation can schedule tasks, make data retrieval simple, and boost processing times when compared to manually doing the same.

Improves data accuracy

The financial reports you generate depend on the data in your accounting software. With automation, there is no question of human error because all transactions are automatically stored in the right places. This ensures high data accuracy and better transparency, as you can easily retrieve and pull out details in minutes. Data accuracy is the basis of everything you do, and so by using an accounting tool, you can rest assured about completely correct data being stored at your premises. When data is accurate, it is reliable, and you can use it to generate reports and make tough decisions about your business that will improve it in some way.

Checking documents with accounting software becomes easy. For example, bank reconciliation is an important part of running your business, whereby your bank statements are checked against your books of accounts. For example, bank reconciliation also becomes faster with automation as the software performs checks on the two documents for you and shows you if any transactions are missing or wrongly captured. This enables you to make changes or check where the error may have occurred and rectify it accordingly. The ease of finding out errors is another major benefit of an accounting solution, as you can get to the root cause quickly.

Maintains stable cash flow

Accounting software enables you to maintain a healthy cash flow in your business. Cash flow is important because it ensures you can run your business smoothly and grow business. Cash flow management is an important part of running a business, and an accounting solution makes it easy to manage cash flow. An accounting solution provides visibility into your cash flow, lets you track those clients who are not paying on time and who are consistently sending in late payments, and much more. It also shows you all your recurring monthly expenses that are draining your cash reserves. An accounting tool helps you understand everything that is impacting your cash flow so you can make decisions to improve it before it is too late.

Improves inventory management and streamlines processes

An accounting software solution improves how you manage inventory and prevents understocking and overstocking. It provides insight into how much inventory you have, where you have it, and when it needs to be sold. This puts you in control of your inventory and prevents wastage.

An accounting tool makes inventory management easier for all businesses as you are aware of your inventory. You can set up alerts if a high-demand product is going out of stock to ensure there is always sufficient stock available. You can set up alerts to know when items are nearing their expiration dates so they can be sold before they are no longer usable. With inventory reports generated from an accounting solution, you can understand which items are your top-selling products and which ones need to be phased out. An accounting solution is also helpful in streamlining all processes that make it easier for you to run your business with maximum efficiency.

On-the-go access to business information

You will not be at your business premises at all times. You will attend meetings held elsewhere, or you may have to stay at home due to some reason. If you store all your business financial information in books, it doesn’t make sense to carry those books with you at all times because that is not a feasible option. An accounting software solution enables you to get access to business information from the comfort of your home or wherever you are. It makes data access easier than ever as you still have direct access to all the information you need, with security options to ensure the data is safely accessed and retrieved for you.

An accounting solution is highly accurate, devoid of human errors, and up to date. This means any time you are accessing the data, you are accessing the latest business data. This allows you to make decisions that matter to your business, and even the last-moment decisions can be informed as they are based on accurate data. Sometimes, you may need to pull out details such as a profit and loss statement or other reports of your business. With on-the-go access to all the business data, it becomes convenient to get the information you need instantly.

How can TallyPrime help?

TallyPrime is an ERP software that lets you perform accounting activities effortlessly with minimal training. It comes with a report generation feature that allows you to generate management control reports, inventory reports, accounting reports, and financial reports. These are used to understand your business’s shortcomings and opportunities that can make you a winner in your industry. TallyPrime has an in-built payroll processing system that enables you to set up employee payments, process payments, and track employee productivity through attendance and production types.

TallyPrime also has an inventory management module so you can set re-order levels and manage inventory at various warehouses. With its invoicing feature, you can generate e-invoices in seconds while customizing it for your business. You can set price levels for different customers which are reflected in the invoice after you select the customer type. It has receivables and payables management features to prevent cash flow blockage and has credit control techniques to manage credit better. TallyPrime’s highly secure features, such as data access control, let you control your business finances and build your business just as you always wanted.