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17/01/2018
If you’re using accounting software, every financial transaction a business makes is recorded and tracked. This information can be quite powerful to identify trends and make decisions you’d not otherwise consider. You will also be able to;
One of the most common uses of accounting information is to create budgets and forecasts for business planning. By incorporating accounting data from prior years, you have a figure to start from when projecting sales and expense amounts for the upcoming year. You will be able to:
Accounting software also gives you the chance to keep tabs on your cash. For example:
Understanding the cash trends of your business means you’re in a better position to take action to improve your profits. Accounting software is the new tool to help you get this data daily.
Some small business owners review their accounting information on a monthly basis by comparing actual sales, expense and profit performance to projected performance. If there are substantial variances in projected versus actual, business owners can implement changes to deal with these differences. That's why it's important to review your accounting data on a frequent, regular basis, because you'll become more adept at spotting small issues before they become large problems.
If you find you have a cash surplus, your accounting data can determine when to invest these funds. By examining the business's cash projections, you can determine how much cash is needed in the short term and how much will be needed in the long term.
Investing in good accounting software can provide you with up-to-date information about your financial data. Even if you use an accountant, you should have access to your business’s accounting records so that you can see at a glance what your financial position is and how best to use that data to improve it. If you do have an accountant, make sure you sit down with them on a regular basis and discuss how best to use it. The more informed you are about your business’s financial position, the better placed you’ll be to make decisions and predictions about its future.
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