Tag Archives: Accounting Software

Accounting is a fundamental part of businesses. Even though accounting mistakes can happen occasionally, but wouldn’t it be better if you could avoid some common mistakes? Here’s a list of some accounting mistakes that you can avoid with proper planning and preparation.

#1. Lack of Organization

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Do I really need to mention how accounting requires excellent organization skills?

As an accountant, you will have to record every single transaction, store (or now digitize) receipts for future use, calculate taxes and so on. However, if these pieces of information are not stored properly, it is obvious then that you might miss a crucial transaction or lose an important receipt. And, what happens when the tax season comes? You could get in deep trouble, obviously!

#2.Not Following Bookkeeping Procedures

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Nowadays, it is recommended that even small enterprises, self-employed persons and freelancers should make use of formal, detailed and documented methods to manage accounting procedures and also to perform other routine tasks.

One effective procedure is to set up standardized forms and checklists to complete so as to ensure consistency and accuracy.

Let me give you a simple example: You can put up a process for setting up new vendors and for that you will need the vendor’s name, address, telephone number and Employee Identification Number (EIN) and other crucial documents such as insurance certificates, letters of recommendation and signed contracts might be required. And, after entering these pieces of information into your accounting system, payments can be processed.

Remember that it will cost you a significant amount of time to develop such a standardized form or checklist as you will have to gather information from your vendors and then have a sort of written policy for your employees to follow.

#3. Failing To Be Accounting Software Shrewd

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Did you know that in the rush of setting up a business, many business owners do not get enough time to correctly learn the accounting software that they have chosen to use?

And, of course, when you don’t know what an accounting software is capable of doing, it is evident that you would make some mistakes or miss out on some vital functionality. Additionally, some incomplete or wrong information can lead to bad business choices.

#4. Mixing Professional and Personal Finances

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By mixing your business and personal finances, you are making one of the most common accounting mistakes that most business owners make. Therefore, it is essential to keep them separate and to keep a detailed track record of what really happened in your business and what is specifically related to your personal use only.

#5. Throwing Away Receipts

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Receipts still count today and even though they have become digitalized, there are some specific cases where they need to be recollected as they can provide solutions to mistakes or fill the gaps in bookkeeping records. Besides, during tax time, receipts can provide additional deduction opportunities.

#6. Making Maths Mistakes

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I often wonder who are those weird people who love mathematics (apart from mathematicians, of course).

Let me tell you that despite using automated accounting solutions, many people often tend to make maths mistakes (especially when they are in haste to get the job done after a long tiring day). But, remember that these mistakes (even if they arose from typos) can prove to be very costly.

#7. Failing To Reconcile Accounts

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Reconciling is a critical process that involves checking an account balance as recorded on your books is correct and accurate and ensuring that it matches the actual bank account balance. And, if there is a gap between the two accounts, this means that there is an error and if you want to prevent this small issue from worsening, you need to give immediate attention to this problem. Moreover, if you review and reconcile your business bank accounts on a regular basis, it will help you to catch any fraudulent transactions that may have occurred within the organization.

#8. Not Backing up Data

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How would you feel if the device on which you stored all your business’s financial information was hacked or stolen? And, worse: what if you didn’t have it backed up at all?

Well, this issue often happens with many accountants who feel as if their lives have been turned upside down. However, good news is that there are some pretty good backup options available nowadays that can save you from this crisis.

Will you follow these tips? Please share your comments!

Currently, there are many tools that technology offers to simplify the work of both accountants and companies, but few are as useful and have as many functions as accounting software. It is indisputable that accounting is essential to keep a business afloat if it is organised and provides the necessary information at a certain time. Still, sometimes it can seem tedious and be synonymous with a lot of paperwork.

Fortunately, some mechanisms allow you to digitise and maintain all the information collected in a single system, avoiding the clutter of papers and minimising human error. These new systems help the accountant organise everything related to their clients’ accounting and allow companies to obtain important information without having to have 24 hours of the accounting profession, as long as every detail, transaction and operation carried out by the entity is entered. If you want to discover more about accounting software and how they will change the course of your company for the better, do not stop reading this article!

 

What’s Accounting Software?

It is a computerised program that enables the compilation of all the financial information of a company in an integrated system that, generally, handles the basic accounting principles to operate under a valid source and within the legal frameworks.

The accounting software stores organise and simplify each historical transaction carried out by an entity, which can include important information such as sales, purchases, inventory, accounts receivable, among others. Likewise, it is capable of issuing reports, balance sheets, financial statements, statistics and any other accounting data that is useful for the company.

In summary, it can be said that the main objectives of this software are:

  • Monitoring of the daily operations of the company;
  • Process improvement, time reduction and maintenance of centralised information management;
  • Timely data in real-time;
  • Simplification of financial information.

It is also necessary to highlight that in Chile, specific laws regulate the obligation to issue documents electronically, such as billing and dispatch guides, gradually including other elements. By this, entering the world of these programs will be indispensable in a few more years.

 

Importance of An Accounting Software

Automation is increasingly important in the business world, not only because of technological modernity but also because of the significant time savings generated by this advance. Previously, keeping accounts for a company or person was exhausting, mainly due to the amount of paperwork and time involved in the operation. How many times have you missed an invoice or an expense report? How many times have you been faced with cluttered piles of information? This scenario has happened to all accountants at some point, and it’s not pretty. Fortunately, systematisation has greatly diminished this problem.

The possibility of entering data periodically in the same database means a gigantic advance in the world of accounting. Likewise, along with saving time, this advance means reducing the margins of error, since an accounting system increases the precision of results, the fulfilment of objectives and the analysis of accounting information for any decision making that may be crucial for the growth of the company.

Having everything organised and grouped in a single system increases your ability to react to certain situations that could determine the future of the business, allowing you to know in time about a problem or complication that represents the line between its development or its involution.

In this way, accounting software makes it possible to improve the management of any operation, department or process that at first glance seems to be going well, but which is not the case. These solutions are even capable of tracing a whole set of actions to determine the cost of a product or service, including the invoices related to its production or purchase, the agents involved and any other calculation required to know the result.

Another of the great advantages of these platforms is that there is no limit to the number of companies you enter regardless of whether there are 10, 20 or how many customers you want. All the information is segmented into accounts for each of them. Additionally, thanks to its multi-user function, you can assign roles to third parties to enter without accessing your private information. Making your work lighter and more efficient is as simple as relying on an online accounting system. If you already do, we invite you to tell us your experience so that many other accountants know first-hand how good it is to have a specialised platform.

Finally, if you want to know more about how accounting software works and which one is ideal for your job, either as an independent accountant when running a small business, keeping a tight grip on your finances is critical to success. Contact SJB Bookkeeping in Hampton Park to get started!

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