It's no secret I love Quickbooks. As a financial professional, it's absolutely essential. But did you know that every business owner - whether or not you outsource your bookkeeping or taxes - should learn to use their accounting software.
Here are my top five reasons every business owner needs an accounting software.
Why You Need Accounting Software
1. To compare your present numbers to last month's, last quarter's, or last year's.
It's easy to lose track of how far you've come since the early days of your business. That's where your accounting software comes in!
If you stay consistent with tracking your numbers, you can easily use an accounting software like Quickbooks to compare your current numbers (revenue, profit, etc.) to your past numbers. Look at the numbers, and then ask yourself:
How much more money is your business making? Chances are, you're making a few more bucks now than you did in your first month. (If you're still in your first month, you've got a lot to look forward to!) Comparing these numbers keeps everything in perspective.
How much more money are you making? If your business is making way more than it used to but you haven't given yourself a raise since Day 1, you're missing out! You should get to grow your income alongside your business.
How much more efficient are you with your time? If you're making the same amount of money you did last month but working way less, you've probably gotten way more efficient. You can use that time to take on more clients, do more admin work, or just take a dang break. Up to you!
Personally, I love looking back on where I started. It reminds me how hard I've worked, how much I've grown, and how far I have left to go.
2. To track your goals and stay on target.
How will you know when you've reached that next money goal if you're not keeping track of your money?!
You can use your numbers to set, stick to, and reach your money goals. I like to consult my accounting system at the beginning of each quarter to determine how much I made in the previous quarter and set a slightly higher income goal for the next. Then, during my weekly money date, I check to see how close I am to my goal. That helps me determine what I need to do to reach it, like signing another client, launching another product, or increasing my prices.
3. To make smart business decisions based on hard data.
While there's definitely a "gut feeling" aspect to making business decisions, you should make your money moves based on the numbers. Whether you're raising your prices, increasing the number of clients you'll take on at a time, or outsourcing some of your work, you should consult your accounting software before taking action.
Here are a few examples of how you can use data from your accounting software to make business decisions:
If you're booked out but not making much revenue, it's time to raise your prices! A fully-booked business should afford you the time, income, and freedom you want. If you're working your booty off, making less-than-amazing income, and still turning potential clients away, you're doing yourself a disservice. Raise those prices!
If you make plenty of revenue but little profit, take a look at your expenses. Remember, REVENUE-EXPENSES=PROFIT. If your profit is hurting, chances are you're spending too much in expenses. What unnecessary software, equipment, or marketing could you cut out of your budget? Get rid of 'em!
If you have a super high customer acquisition cost, your marketing may need some streamlining. Where are you spending money in order to get leads? Are those outlets working for you? If you don't feel like you can cut down on marketing, consider your average customer value. Is there a way you can increase the amount customers usually spend with you to offset the acquisition cost?
If you get tons of leads but have a low conversion rate, it's time to work on your sales systems! Find where your leads tend to drop off (your email sequences, your sales calls, your after-call check-ins) and rethink that part of the buyer's journey. Maybe you need a new sales script, a stronger email sequence, or just a quicker check-in. You might be surprised how much a few tweaks can improve your conversion rate.
All these decisions rely heavily on your numbers, and if you're not tracking them with an accounting software, you'll have to make these decisions blindly. Set yourself up for success by tracking everything from the get-go.
4. To maximize organization and minimize stress.
Look, money is stressful. And when you start your own business, managing your finances gets a whole lot more stressful.
I can't promise that an accounting software will magically poof your money stress away, but it will minimize it. When you keep a close eye on your money, you're more likely to catch those little mistakes, overcharges, and sneaky expenses, meaning you'll keep more of your hard-earned money.
Plus, you'll get to go to bed each night knowing exactly how much you're making. That's a stress reliever in itself!
5. To save time (and major headache) during tax season.
Sure, people filed their taxes long before accounting software's came to be. These days, though, you're going to encounter a lot of trouble if you try to DIY it without one. Take it from your accounting bestie: Get yourself an accounting software. Just trust me.
"But Ashley, I outsource my taxes!" Hear me out!
Just because you outsource your taxes doesn't mean you should ignore your finances for the rest of the year. If you do, you'll wind up chasing down receipts, pulling your numbers, and sending countless emails back and forth to your stressed-out accountant.
On the other hand, if you do track your finances using an accounting program, your tax professional can pop in, gather all the info they need themselves, and file for you with ease. You won't have to take time away from running your business, and your accountant won't have to hound you for all your paperwork. It's a win-win!
Whether or not you outsource your financial management, you deserve to feel in control of your money.
Money is a huge part of your business, so don't lose track of it! If you're looking to outsource your bookkeeping, let's chat! If you want to go the DIY route, check out my course Be Your Own Bookkeeper, your guide for managing and maximizing your business finances.
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