The objective of every business is to convert available time and resources into profit. Unfortunately, a business owner must spend time on tasks that don’t directly lead to profit.
Bookkeeping is one of those tasks you can’t avoid. You can’t let it slide, no matter how tedious it is. When you do, bad things happen. You may find that a major client hasn’t paid you. Perhaps you missed that an important check has not cleared. Maybe you can’t find receipts for expenses you planned to deduct on your income taxes. All of these things can be identified early and fixed if you don’t postpone bookkeeping to handle tasks that are more directly related to profit.
Now imagine you could just say a word or tap a screen and a task will be done correctly. Suppose further that you could automate your bookkeeping by avoiding the need to organize receipts, fill in spreadsheets, and reconcile your checking account balance against your expenditures.
Luckily for you, a recent finance benchmarking report says that time spent on financial processes can be reduced by 30% to 40% through automation and behavior change.
Signs that you’re ready for automated bookkeeping
Those running a growing business are often overwhelmed with the tasks ancillary to key business activities. The paradox is that these very tasks can keep you from focusing on activities that will help grow your business. Should you seek new customers first or take care of your accounts receivable (existing customers that owe you) first? Should you prioritize a sales call or meet with a banker about an expansion loan? Yes, your business is growing, but unfortunately you may already be taking on more risk than your sales would indicate.
Signs that what you’re doing now may need revision:
- Your accounts and financial documents are a disorganized mess. If records are sloppily maintained, they’re hard to find when you need them. You might need them to help negotiate a price with a vendor. They might be a reference for building a proposal. Lost records might even keep you from knowing whether you’re making a profit.
- You keep putting off bookkeeping tasks. Procrastination can cause unnecessary stress and cost you money. For example, missing a deadline could incur penalties or fines.
- You’re making mistakes more frequently. The financial cost of disorganized files or haphazard data entry is as high as 25% of a business’s revenue.
- You never have the data you need on hand. Without seeing real-time data, business decisions may be made on a hunch and errors are harder to catch.
The benefits of automated bookkeeping for small businesses
Bookkeepers and accounting professionals are already embracing the advantages of automated bookkeeping. Their expertise is tracking money in and money out. Here’s why many companies are planning to implement cloud-based accounting solutions in the near future:
- Greater productivity. Automating repetitive tasks would save six or more hours a week according to nearly 60% of surveyed information workers. In the same survey, 40% said at least a quarter of their time was spent on such tasks. Tracking, compiling, and verifying invoices or receipts automatically in a cloud-based financial management system does exactly that.
- Fewer errors. Small errors can grow if you don’t catch them, affecting tax estimates and financial projections. More than two-thirds of business owners said in the above survey that automation was instrumental in reducing errors.
- Real-time data access means faster and more reliable decisions. With bookkeeping data available in real-time, decisions can be made quicker with up-to-date information. A recent Deloitte report found one-third of business executives agree that automation improves decision-making and reduced time spent on mundane tasks. Others found it led to enhanced products or services and stimulated creativity.
- Stronger security. You get greater data safety because automated bookkeeping takes place in the cloud. There are no paper files to be stolen. Nor is losing your laptop a business-extinction-level event. Using bank-level 256-bit Advanced Encryption Standard (AES-256) protocols make the data unusable even if a hacker can somehow get hold of it. That’s why it’s the standard used by the U.S. government, banks, and credit agencies. Internal fraud is nearly impossible when you have complete visibility and the ability to quickly trace every change made to your books.
How to get started
You might be one of the many entrepreneurs who dislike bookkeeping. That’s why automating bookkeeping for your business should be your next step. An all-in-one financial management platform like Neat will organize your books. It would eliminate manual entry by scanning data, then classifying it based on standard bookkeeping categories or your own customized preferences. It will store your data in the cloud for easy access both from your office or via your mobile device wherever your business takes you. It would end the need to pore through physical files in search of the reason for a discrepancy in your physical records or spreadsheets. It will digitize your invoices and payments to move cash to you faster.
Best of all, automation would provide an accurate view of your business and enhance your control over it. And you’ll find yourself focusing on growing your business. Automatically.
Garrett Baird, President & CEO of The Neat Company
Bookkeeping stock image by KimSongsak/Shutterstock