There’s nothing more rewarding and exhilarating than launching your own business. Even if it’s a small venture with a one-person team, growing your business can be an exciting journey. Nevertheless, being a solopreneur comes with its sets of challenges and limitations.
Running a one-man business operation means you’ll have to simultaneously don multiple hats. From product development and marketing to sales and customer support – you’re responsible for everything. You even have to build your personal brand as an entrepreneur and develop a growth hacking strategy for your business.
Tracking your revenue, expenses, and cash flow often takes a backseat amidst this rigmarole. If you’re just starting your entrepreneurial journey, it’s only natural to think that you don’t need specialized accounting software. After all, there’s nothing that a simple spreadsheet and calculator can’t accomplish, right?
Nevertheless, organizing your financial records is a crucial part of building a successful business. Things can quickly get out of hand as your business grows and you witness a spike in sales. Simple spreadsheets won’t make the cut in such scenarios.
While accounting software can’t replace an actual accountant, it often helps with efficient financial recordkeeping. This is particularly important if number crunching isn’t your area of expertise.
Are you still wondering whether your business needs reliable and high-performing accounting software? In this blog post, we’ll explore some of the key benefits of accounting software for solopreneurs to help you make the right decision. Let’s get started.
Improved Accuracy & Speed
Data entry and calculation are some of the most essential aspects of accounting. From profit and loss to expenses and tax summaries – you need to perform lengthy calculations. Manual paperwork and recordkeeping leave plenty of room for human error. Not to mention, it can be time-consuming and laborious.
This is where accounting software, such as FreshBooks, QuickBooks, Sage 50cloud, etc. step into the picture. They drastically simplify and speed up the data entry process. Also, they’re programmed to carry out complicated calculations and deliver accurate results in seconds.
As long as you provide the correct inputs, you can be assured that the extrapolated data will also be correct. It eliminates the risk of human error and helps you better utilize your time. Instead of breaking a sweat over expense sheets, you can focus on more important things, such as your marketing and PR outreach strategy.
Even if you’re remotely running a small online business from your home, it’s important to have a clear idea of its financial health. The good news is that most industry-standard accounting software generate a plethora of detailed and easy-to-understand reports.
Profit, loss, expenses, taxes – you can track various metrics and KPIs using these reports to get a realistic glimpse of where your business stands. You can even monitor your cash flow and plan your overall budget for the upcoming months.
Also, these reports come in handy when you start approaching investors and look for financing options. Instead of manual number crunching, you can provide investors/financiers with accurate and professional reports on sales and revenue figures.
It’s one thing to issue a handful of invoices to your first few clients. However, as your business grows, manually sending out and managing multiple invoices will become extremely challenging.
Instead, you can use accounting software to quickly generate professional-looking invoices. You can even track unpaid invoices and send timely reminders to clients.
Your financial records include plenty of sensitive and private information about your business transactions. You wouldn’t want to jeopardize their security, would you? Unfortunately, storing these details in a spreadsheet on your computer means any outsider could access them.
Worse still, if your computer gets hacked, this information could be misused in various ways. That’s why you need to use a trusted and reliable accounting software to restrict access to your private financial data.
Room for Scalability
If you’re only processing a handful of transactions every month, a simple Microsoft Excel spreadsheet can be enough for recording your revenue and expenses. But as your business grows and starts generating more sales, you’ll need specialized software that can handle such high volumes of data.
Here’s the thing – your business isn’t going to be a one-person operation forever. At some point, you’ll want to recruit new employees (possibly even an accountant) and expand your business. Would you want your employees to spend their time organizing your financial records or focusing on your company’s growth?
Using accounting software ensures that all departments have access to relevant, consistent, and accurate financial information in a jiffy. Also, they can access this information from any device of their choice, irrespective of their location.
Are you a freelancer or solopreneur who’s tried their hands on various accounting software? Share your experience in the comments section below.