The Easiest Way To Monitor Your Business Finances
We’re a big advocate of using accounting software in your business. This especially applies to bigger business or businesses that are starting to grow or those that manage multiple projects.
If you are a small business and have a small volume of transactions throughout the year (and we know your budget can be quite tight at the beginning), a simple spreadsheet can be enough for you at this stage. However, we recommend that you build it not only for simply recording your transactions but also for generating necessary reports within seconds without wasting your time on producing them from scratch every single time.
If you’re an aspiring business owner who wants to scale your business, looking for time savings should be one of your main tasks. This way you can have more time for income generating tasks.
If you don’t feel very confident with Excel, drop us an email and we’ll be happy to help you build spreadsheet templates tailored to your needs.
Ok, back to accounting software.
As we’ve said, if you have a business with a bigger volume of transactions, bigger needs or more projects, having accounting software shouldn’t be a matter of whether you should have it, it should be a matter of which one you should have.
There are lots of reasons why accounting software should be present in your business, but we’re not going to focus on all of them today. Instead we will focus on one which is
monitoring your business finances.
How will you know if your business is earning?
If you don’t keep and organise your business records, like invoices, receipts etc. on a regular basis you are risking a lot. You are basically risking losing your business.
But let’s go one step further, because keeping your business records isn’t everything.
This is what you need. Business transactions on its own aren’t sufficient to tell you what the financial state of your business is.
It’s the reports that tell you the whole story.
The story that can inspire you to grow bigger and wiser or the story to help you go through temporary business difficulties without too many scratches.
But it’s not enough to run a report once a year when you have to do your tax return. This is to tell the taxman how much you’ve earned or lost. What you need is useful insights into your business produced on a regular basis.
It could be once a month or less frequently or more depending on your business size, your needs, a type of business and projects you run.
But who wants to create these reports all the time? Who has time to do this?
You need the information relatively quickly.
So what is The Easiest Way To Monitor Your Business Finances?
Accounting software and its reporting features is your answer. This will tell you if you’re company is doing well financially within seconds.
If your business records are up-to-date, all you have to do is a few clicks and all the necessary information is right there in front of your eyes. Waiting for you to be analysed and used to grow your business.
What useful information the reports in accounting software show you:
➡️ How much you’ve spent in total
➡️ How much you’ve spent in each expense category
➡️ Which expenses you should cut down on
➡️ Whether you can invest more in marketing or not
➡️ How much you’ve earned in total
➡️ How much money each income stream has generated for you and which one you should focus on more
➡️ How you can plan your budget wisely for the future
➡️ Whether your decisions so far are bringing financial benefits to your business or whether you should change your approach
This is not an exhaustive list.
The bonus of using accounting software is also that very often you can categorise your transactions by different projects, so later you can run your reports and analyse individual projects in details.
This feature is included in Xero accounting software which we and our clients love using.
Below we’re taking you on a quick tour to see Xero and the various reports that it offers.
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