Small Business Bookkeeping Today
“History … has no present, only the past rushing into the future. To try to hold fast is to be swept aside.” – John F. Kennedy
Very little has changed over the centuries in terms of using double-entry bookkeeping as a means of tracking your company’s possessions. Thanks to the equation that started it all, an unexplained loss or imbalance in your accounts is still a sign that something’s gone missing – or at least was inaccurately recorded.
What has changed in small business bookkeeping today however, is that the rise of technology is making it easier than ever for accounting professionals to do what they do. Advanced accounting platforms have ramped up performance, streamlined entries and analysis, and reduced the errors, omissions, and tampering that often go hand-in-hand with penalties, interest charges.
Specialized software programs like QuickBooks and Xero have automated data entry to the point where bookkeeping tasks can be performed faster and more accurately than our entrepreneurial predecessors could have imagined.
Today’s bookkeeping software makes it easy for your professional bookkeeper to enter, track, report, and analyze your financial transactions almost instantaneously, giving you the detailed information you need – when you need it – to make better decisions for your organization.
But sophisticated double-entry software does more than just process your company’s payroll and inventory, accounts receivable and payable. In the right hands, it can serve as a fully functioning account information system, making it possible to:
- measure, classify, verify, calculate, and interpret your organization’s financial data,
- perform financial analyses for both internal and external audit purposes, and
- produce reports designed to support your managerial, tax, and legal obligations
It can be difficult to imagine how labor-intensive and time-consuming the manual consolidation of transactions into useful reports must have been at one time. Fully customizable from the most basic of bookkeeping tasks, to solutions that effortlessly integrate data across multiple departments, accounting software has become an invaluable resource for today’s small business owner.
While many software programs are still desktop-based, more and more businesses are discovering the advantages of working with a cloud-based accountant. Cloud technology allows your company’s financial data and reports to be securely retrieved at any time, and from any device or location with internet access.
Cloud-based programs process, store, and access your business account information using remote internet servers. Because there’s no software to be installed, maintained, upgraded, secured, or backed up, there’s less cost, time, and risk of lost or damaged data involved.
Some of the biggest reported benefits of cloud-based accounting for the small business include:
- access to accurate, real-time data whenever you need it, via smartphone, tablet, or laptop,
- financial data that’s synced automatically, with maintenance-free usage and minimal downtime,
- convenient collaboration potential among authorized team members or across branches, and
- full scalability, with more complex applications and reports available as your business grows
Cloud accounting technology cuts costs and improves efficiency, and software-as-a-service (SaaS) providers are intrinsically motivated to combine great service with regular product innovations.
We can’t discuss small business bookkeeping today without broaching the subject of cyber security. As safe as our technology is purported to be, where there’s online data, there’s online risk. Keeping your company’s financial information safe from damage or attack by an outside party should always be priority one.
Cyber security includes any technology or practice that prevents unauthorized access to private or sensitive data – whether that data is being stored, processed, transmitted across networks, or transferred from one device to another. Since scenarios like these are virtually unavoidable in the course of doing business today, every organization must take steps to protect itself from the risk of a cyber-attack.
With online threats evolving regularly, it’s best to safeguard your financial records with security that centers around continuous monitoring and real-time assessments. Proactivity and adaptivity are key, according to many advisory organisations.
- Prevent: Identify the solutions, policies, and procedures needed to reduce the risk of an attack
- Resolve: Put plans and procedures in place that make it possible for your business to determine which resources will resolve a threat in the event of a security breach
- Restore: Prepare your business to address consequences with both employees and customers, to ensure the fallout from an attack is as minimal and short-lived as possible
With the proper groundwork in place, your business will be better prepared to respond to a cyber incident with a plan that protects its assets, sales, and reputation, and that gets it back up and running as quickly as possible.
As a small business owner, cyber security starts with you. Take the time to educate yourself and your personnel on risk management, and make sure your bookkeeping firm has appropriate security measures in place.
What Does the Future of Bookkeeping Look like?
“The future belongs to those who prepare for it today.” – Malcolm X
Double-entry accounting has come a long way since ancient kings and wealthy landowners used it to keep track of property and taxes. Clay tablets and parchment have given way to iPads and laptops, and smart software programs that learn and adapt are showing up in everything.
If you would like to find out more about cloud accounting solutions please contact me.
Paddy Gahan Gahan.ie firstname.lastname@example.org