Because of the rising pressure being put on businesses to become more competitive and lean in the market, it has become more necessary for them to judge how they are doing. Here comes the role of accounting in real time. The task of keeping approximate records of stock value, profit & loss and overall finances is now a crucial element of your daily workflow of the business.
Almost on daily basis, you must be able to keep track of every single transaction regarding your business. This helps you to locate areas where there are good functioning and those areas in which you need to bring about changes. Doing this enables you to make decisions, when and where they are needed. For this, you require accurate and up-to-date financial information. Thus it will be good to buy accounting software.
Time is money in the world of business today. The question is- how often information about accounts will be used by you for managing your business on a daily basis? Do you face the problem that the information is not being relayed to you fast enough to make an impact? Or else, is there a lack of accuracy of the data? This is where accounting in real time can provide you a competitive edge.
Accounting in real time provides you the required information when needed and as soon as there is a completion of your transaction. Be it a purchase or sale, you gain access to profit& loss, sales report, balance sheet and more. Using these details, there is much more scope to be proactive than reactive regarding needs of your business.
The State Of Profit& Loss
The Profit & loss or Income statement is the critical area where you will experience the benefits of accounting in real time. Just by clicking a button (whatever time of day), you will be capable of judging how you are doing and the quantum and nature of your total profitability. You can do a comparison of preceding periods, check various channels and compare how one is performing compared to another. Using this information, you can take decisions that will guide your business in the best direction.
You need not wait until month end or year end because accounting in real time is ready for all data, 24 hours a day, ready to be accessed at whatever time. Whether you need to have a meeting with a manager or you want information for a new investor, you will always have access to up to date information.
A balance sheet is another area where you gain advantages with accounting in real time. You will have accurate valuations of stock, avoiding the need to deal with closing and open stock journals. Every time you purchase new goods, there is the automatic accounting of stock and inventory levels. By just a glance at your ready balance sheet, you will have a good idea of sales and inventory levels.
When you use a system which accounts for all your channels and integrates it into one system, you can quickly judge which channels are working and which are not. When you filter and compare information within one system, by making use of real-time data of accounting for each separate sales channel, you can monitor your margins to identify areas for improvement and the channels which are doing well.
This is how accounting in real time can benefit your business. The utility of online accounting software for small business, cannot be over-estimated.