You might think bookkeeping is boring — you’re probably right.
As monotonous as it may be, bookkeeping is critical for businesses of all sizes. Bookkeeping is the process of regularly recording and organizing financial data for an individual, a business, or any other type of organization. It ensures financial information is comprehensive, up to date, and accessible. As Lita Epstein, author of Bookkeeping Kit for Dummies says, “no matter what business you’re in, the ability to understand your books is essential.”
Luckily, for today’s business owners, the influx of emerging technologies and digital tools has made it simpler to track your financial activities. Whether you’re just getting started, falling behind, or somewhere in between, there are a number of systems and tools you can implement to make maintaining your books more manageable.
Keep reading to learn more about how technology simplifies bookkeeping.
Bookkeeping vs. Accounting
Many people use the terms “bookkeeping” and “accounting” interchangeably. There’s good reason for this, as the two are similar. Bookkeepers and accountants typically work together very closely in order to fully serve their clients. Both are tasked with the financial reporting for the business and both don’t get much time off between the months of January and April.
However, accountants require specific certifications, which means they have titles like Certified Public Accountant (CPA) or Chartered Accountant (CA). On the other hand, if you’re a small business owner, chances are you’ll be doing the bookkeeping yourself. Bookkeeping includes activities like recording sales invoices, monitoring accounts receivable, billing, and more.
How Technology Has Changed Bookkeeping
Bookkeepers have been doing away with the traditional pen, ledger, and desk calculator. Emerging technologies have made it much simpler for bookkeepers to perform their many tasks, while also ensuring financial information is consistently up to date and accurate.
The cloud is a great example of recent technology that’s significantly impacted bookkeeping. Using the cloud for financial activities allows any member of your organization to immediately access current data, no matter the time of day or their location. Having records in a digital format and on one comprehensive system means you can easily manage and retrieve files when needed. Distributing financial information to different departments within your organization will also be a breeze. Some software solutions can even plan, budget, predict, and report on an organization’s financial results.
Tools for Bookkeepers
As a small business owner, it’s likely you’re also your organization’s defacto bookkeeper. It’s no secret managing your business’ finances can be overwhelming — so much so that it can often feel like a second full-time job. Using the many digital tools available today can make bookkeeping much less time consuming. If you need a little help along the way, a virtual bookkeeper can offer their expertise and ensure your financial information is correct, updated, and easy to understand.
Here are a couple of other tools that can help the bookkeeping process:
Innovative tax software: Today’s tax software has helped improve accuracy while reducing margins of error — something businesses want to embrace in order to avoid tax penalties and prevent issues with stakeholders. Better tax software also makes audits more efficient and effective.
Mobile banking: These days, we do everything from the convenience of our smartphones. Banking is no exception. With a mobile bank account, you have complete control over your business’ finances. You can monitor your balances and move money between accounts to avoid overdraft fees. In addition, you can avoid late fees by getting alerts when it’s time to pay bills or set up recurring bill payments and not have to think about it at all.
As a bookkeeper in today’s digitally-connected world, it’s necessary to stay informed on advances in technology. Take the initiative to look further into the ever-evolving ways digital tools can make bookkeeping simpler. Embracing these changes will prove to be greatly beneficial to you and your organization.