By Magnus Nmonwu, Regional Director for Sage in West Africa
If you are like most business builders, you probably do not enjoy doing bookkeeping or working on your taxation administrative tasks. You would rather focus on what you do best – growing the company, bringing out new services and interacting with customers and employees. Even if you run a one-man business, an accounting solution can help you streamline all the paperwork and other number crunching or time-consuming activities, so you can focus on the important stuff.
There are many other benefits – from generating financial reports to complying with Federal and State internal services’ requirements. It is no longer expensive to acquire these tools or solutions, thanks to cloud-based accounting packages that offer a small monthly subscription fee to get you going.
Here are five questions to ask yourself if you have not yet invested in these accounting solutions:
1. Are you struggling to track your cash flow, income and expenses?
Many entrepreneurs use paper records and their bank statements to keep track of the flow of money into and out of their businesses. This makes it hard to keep track of payments expected, outstanding bills and the company’s precise, up-to-the-minute position with income, expenses, assets and liabilities. It also becomes time-consuming, and time should be spent doing revenue-generating activities or creating new business development relationships and opportunities.
With the right accounting package, you can generate a range of financial reports with a swipe on your mobile device or a click of the mouse. You can track sales performance, see which of your product lines are profitable or not, generate forecasts and budgets, and easily call up profit and loss statements, while tracking your debtors and creditors.
2. Are you spending a lot of time filing financial records and doing your books?
Business owners without accounting solutions know the tax year-end ritual of printing out bank statements, digging paper bills and invoices out from boxes, and spending hours adding everything up.
This amounts to wasting valuable days of your time each year that you could be out selling to customers or doing billable work. Or you could be spending money you might invest elsewhere in your business to pay someone else to do all your tedious and time-consuming paperwork. An accounting package gives you one place to keep your accounting records – and they will be accurate and up to date. It also affords you the opportunity to call-up historic information and make projections into the future.
3. Is your accountant asking you to invest in accounting solutions?
If your accountant tells you that you need an accounting solution, take heed. The accountant is probably billing you heavily for doing a lot of manual work on your behalf. He or she may also be concerned about your ability to produce accurate financial records in a timely fashion.
With an online accounting solution, you and your accountant can work on the same set of books at the same time from anywhere in the world. You can be processing your invoices, while your accountant is busy running reports, for instance. There’s no more need for the accountant to come to your office for some simple paperwork.
“The benefits of cloud solutions are huge for us in terms of scaling our business nationally, supporting our clients virtually, with no loss of data, no installations and no backup efforts,” says Chioma Ifeanyi-Eze, the founder of Nigeria’s first online accounting shop and Sage One partner, Accountinghub.
4. Are you struggling to stay on top of issuing and paying invoices?
Do you spend a lot of time each month generating invoices for your customers and keeping track of your purchases from, and payments to, suppliers and service providers? With the right accounting package in place, you can quote from the accounting solution and then generate a customised, professional-looking invoice when it’s time to bill. You should be able to easily create recurring invoices quickly and simply for each customer that needs to pay you the same amount each month. You will also benefit from features that make it easier to track your own creditors.
5. Do you find reconciliations to be a pain?
Manual reconciliations are slow, inefficient, and prone to human error. With the right accounting solution, you can link your online banking account to your financial solution and each day your accounting records will be updated automatically.
Business builders and entrepreneurs don’t go into business to wrestle with red-tape and manage admin. New technologies like artificial intelligence will make life even easier, allowing us to interact with accounting software in more natural ways. Our vision is to make those administrative tasks invisible by 2020 by automating the back-office functions so we can free business builders up to follow their dreams.