5 Questions to Ask Before You Automate Your Accounting

Still doing your accounting using paper and Excel? You’re far from alone. Millions of small businesses are still using manual methods for their bookkeeping. It’s familiar, and may even seem safer than moving all of your company’s data—and that of your customers, vendors, and employees—into the cloud.

But as you may have already learned, paper documents and files can get lost or destroyed. You probably find yourself writing the same information numerous times and wasting time every day searching for an invoice or purchase order. And it’s difficult to create the reports you need in order to gauge your financial health.

Small business accounting websites solve those problems and many more. But you need to be committed to changing your ways since there may be times that you look longingly at your old Rolodex and filing cabinet. Here are some questions you should be able to answer first.

Can you dedicate the time it will take to make the transition?

Moving all of your records to a cloud-based application will be time-consuming, even if you’re a sole proprietor. You’ll need to:

  • Learn how to use it. You might start by entering dummy data until you’re comfortable enough to start entering live data.
  • Create records for all of your customers and vendors – and employees, if you’re going to automate payroll. You might want to hold off on processing staff compensation digitally until you’re up and running with the other elements of your bookkeeping.
  • Enter information about any inventory items you sell and know what your stock levels are.
  • Link your online bank accounts to your accounting application and learn how to track and process online transactions.
  • Customize the website to meet your company’s unique needs.

Are you and your staff familiar and comfortable enough with computers to take on this challenge?

Although many small businesses haven’t automated their accounting yet, most companies are using PCs or laptops or tablets for other functions, like email, word processing, and scheduling. If you have employees who are under the age of about 40, adjusting to new technology shouldn’t be a problem since they grew up with it. But have your older workers embraced their computer-based tasks as readily?

This doesn’t have to be a deal-breaker. Even if some of your staff aren’t enthusiastic about using an unfamiliar application, that reticence alone shouldn’t keep you from advancing. It’s just a good thing to keep in mind as you proceed.

Can you afford the additional costs?

You will have new budget items when you take on cloud-based accounting. These websites are subscription-based; depending on the service you choose, you’ll pay anywhere from roughly $25-75/month. Payroll will incur additional charges, as will the ability to accept credit card payments and e-checks from customers. You may want to upgrade your smartphone for mobile access and your PCs for daily use if they’re too ancient for fast, reliable internet access.

The thing is, though, once you get up and running, you’ll be saving time. Accounting websites minimize duplicate data entry and the time required to create and dispatch transactions. They help you search for the smallest details and generate the most complex reports in seconds. The time you save represents:

  • Money,
  • Reduced frustration and confusion, and,
  • Better management and planning, thanks to the extra hours in your week.

How confident are you in the security of cloud-based applications?

You know that major financial and government institutions get hacked. Digital intruders have begun stealing and holding data owned by small institutions for ransom. No one is absolutely immune from security breaches. It’s important that you monitor your own local systems, but at the same time, online accounting service providers employ state-of-the-art computer safety protocols, keeping your data backed up in multiple secure locations.

Are you willing to ask for help?

Financial professionals deal with more than numbers these days. The best keep up with advances in accounting technology and can help you select the right solution, get it set up, and provide training and ongoing support. Getting a pro involved from the start will make your transition faster and ensure that your online accounting gets done the right way.


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