To keep a business up and running the most important thing is managing the money. If you cannot handle the finances well your business will struggle to survive. To keep the financial health of your business in check you need to monitor and manage the day-to-day cash flow and efficient bookkeeping is mandatory. This is called accounting and is a vital part of the business. Here are some accounting problems that most businesses face and you need to be aware of them.
- Payroll problems
As a business owner, you do not want to pay your employees more than the hours they worked, but you also do not wish to get in their bad books and face embarrassing confrontations by ‘accidentally’ withholding more money than you should have. Calculating wages are not even just adding up the number of hours worked for most companies. You also have to add up allowances, bonuses, and commissions and subtract the loan deductions along with taxes. Computing exact wages every month and ensuring timely delivery of payments to employees, outsourced companies, and government can be an exhausting and time taking job if done manually. Adding tax codes and deducting deductibles can be a complicated job. This is the reason the Accounting Department and HR department work closely with each other in larger firms.
Most business owners do not wish to conduct the payroll process manually, as it lacks efficiency and can be time taking. It can also lead to several mistakes which can sometimes cause serious damage if you are a small business and you are already operating on a small capital. A small business owner once accidentally paid 10 times more to his employees just because an extra zero was added in his manual calculations accidentally. Although he was able to make his employee return the extra amount it cost him his peace of mind and a good time. Therefore it is wise to invest in Easy Payroll Software which can take the burden off your shoulders. This software can calculate monthly, weekly and hourly wages, taking into account bonuses, commissions, and advance payments. It can also take into account loans and other deductions. It allows you to generate a user-defined pay-slip format. You can also generate reports in various formats.
- Timely Invoicing
Timely pitching your sale and delivering your product and services is very important for any business. However to maintain smooth operations and healthy cash flow you must generate your invoices timely and send them to your clients. The Sooner you will send them your invoice, the sooner you will be able to collect your money, and therefore invoicing is important and deserves separate attention. It is also essential to keep a perfect record of all invoices so you can track their status and run a background check for any client whenever you wish so. Good invoicing software will not only let you generate invoices and invoice reports with taxes included in a matter of minutes it will also facilitate you by enabling you to send out invoices through email with just a few quick clicks.
- Book Keeping and managing the cash flow
Not everyone is as efficient in clearing payments as you would wish. If you are not getting paid quickly enough, your poor cash flow can bleed your business to death. This happens when your debits are not recovered for a long time and they eventually turn into bad debt. It is important to know how much credit you can give to your clients based on their paying capacity and previous records so you are not dumping your money in the form of bad debt. Keeping your ledger efficiently up-to-date with correct credit and debit details can help you keep an eye on the money going in and out of your business. It is vital to be able to thoroughly analyze your invoices. To have your day to day expenses summarized in a monthly report is also crucial for monitoring the cash flow. You can only make the right business decisions if you have this information available to you.
Paying taxes responsibly is important for all big and small businesses alike. You need to be efficient and accountable for it so you do not overpay and miss opportunities or pay less tax and get penalized. You can only do this if you have your numbers straight and all the records available to you readily. Digging up invoices and compiling the list of all your expenses at the end of the year can be a real pain sometimes.
- Annual Audit Report
Businesses may require audit reports for several different reasons. The statutory audit report is generated to inform the shareholders about the current status of the business. Similarly, sometimes audit reports are needed for finding investors or for getting a business loan from a bank. Third parties can charge you a hefty amount for an audit report, which is just a letter about the financial status of your business. It is easier to generate audit reports when you have all your data and numbers available.
Some people outsource the accounting services and other hire experts for accounting and auditing of the business. This could get expensive and frustrating if you cannot find the right people for this job. The good news is if you are a small business you do not need to hire qualified staff to handle all these problems for you. You can invest in accounting software which you can use yourself to manage all you’re accounting needs without any technical knowledge. The interface of accounting software is user-friendly and simple enough that you can navigate through it and make entries and generate reports without any technical knowledge at all.
Even if you are a huge business, your HR and accounting departments will thank you if you facilitate them with the accounting and invoicing software. This highly efficient yet simple to use software will help your teams perform and make the best use of their time. Now the complicated accounting operations can be performed by giving simple commands in a matter of minutes.
- Bookkeeping is a lot easier with the general ledger of accounting software. You can easily sum up the transactions at the end of the day, week, month or year and generate reports.
- This software keeps a clear record of your debits and credits, giving you easy access to the most crucial information.
- Managing your transaction efficiently this software is capable of recording advance payment and postdated cheques.
- Audit trail records help you better monitor your financial operations and keep track of the progress and changes. This makes generating reports and making financial decisions significantly easier.
- Minimizing any effort and work needed this accounting software makes sure your reports are Sales and Service Tax (SST) Ready.
- The software is equipped with real-time integration thus allowing you to make quick assessments and manage you’re your data better. Even if you have a huge business with franchises in different cities, real-time integration will give you quick and easy access to the most up-to-date information about the financial status of your business. This is a competitive advantage that can help you beat the competition easily.
- This software is also capable of handling multiple company transactions making financial operation more smooth and efficient for you. The additional feature of accommodating multiple currencies allows you to take your business to the international level without any extra hassle.