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Did you know that around 50% of small business owners don’t use saccounting software to process their accounting information?  Many resort to the excel spreadsheet to keep track of money coming in and money going out.  These small business owners would rather get on with their core business than worry about the administration tasks associated with accounting, even with a software package, because it seems like such a waste of time.

On the surface they are right.  Administration does not contribute directly to earning cold hard cash, and takes the small business operator away from actually earning for the business.  However, if the movement of money in and out of the business is accounted for accurately and on a timely basis, there are many benefits that come from having a package.

Enter data once and update a number of modules
The first benefit of using accounting software is having your accounting information centralized and organized, and having a system of easy retrieval.  That is the beauty of a computerized database.  You enter information in once and a number of areas in the accounting system can be updated so you don’t have to enter the information repeatedly.

Saves time and cuts down on errors
This saves considerable time and also cuts down on administrative errors that can be time consuming to find and fix.  For example, when you make a payment for some capital equipment used by your business, the vendor file is updated, the cost account is updated, and if the accounting software has an integrated fixed asset register, that is also updated.  Three areas are updated with one entry.  If you maintained a manual accounting system on a spreadsheet or on paper, these three entries would have to be performed separately, wasting your valuable time, or costing you more for someone else to do the task.

Easy to find accounting information
Another benefit of the computerized database is that information is so easy to find in comparison to the manual system.  If a supplier rings up and asks why they haven’t been paid, you can easily access their account information and check all previous payments and invoices entered for payment, to find the answer.

Automatically generate documents and reports
When it comes to purchasing, your purchase orders can be generated by the software, so you have a record in the system to match against the supplier invoice when you receive it.  This system provides for an easy check to ensure you are being billed for, and also paying for, what was originally ordered.  Checks can be printed by the accounting software instead of being manually hand written.  Finally, reports can be generated at the push of a few buttons (or the click of a mouse!).  Manually preparing reports can be time consuming and the process is prone to errors.

For countries that have a VAT / GST tax, it also automatically calculates the tax and generates reports for the end of month or quarter, for payment purposes.

Payroll Processing Benefits
There are benefits when it comes to payroll processing using accounting software.  Most payroll processing is done on an exception basis.  That means that the payroll for many small businesses are similar from week to week.  Therefore, only exceptions or variations to the standard pay need to be entered into the payroll software.  If there are no variations, there is very little in the way of processing.

These are just a few of the benefits of using it in a small business.

Want to know which are the best small business accounting software packages on the market today? For a complete review, and for advice on  what to look out for, before buying any small business accounting software check out the website http://www.takingcareofsmallbusiness.com

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