The greatest lesson that 2020 has taught us is to be prepared for the unexpected. 2020 has its dint in almost every industry all around the globe. It was a wild ride for all businesses, and small businesses, in particular, had to roll with the punches. The lockdown has gripped us all and kept all the doors shut.
It is of course a hard time to power through, but you are not alone. Millions of small business owners like you are facing what you have been through. Even after the virus is gone, it takes some time to recover from this downturn.
And that is why it is important to get grips on the current trends in accounting to keep your business afloat and taxes straight. Here are five curated accounting trends to get your books straight after the pandemic.
Set the Stage for Remote Work
With the global pandemic gripping us, most small and midsize businesses have switched to remote accounting. Work from home culture is on the rise and accounting is not an exception. We see a significant hike in the number of remote accounting from coast to coast, induced by the new practices of conducting business remotely.
So, if you are a small business owner, it is your onus to facilitate your bookkeeper or accountant with proper records and necessary aids for the accounting-from-home landscape. You should aid them with whatever they need for them to work from home to keep your records straight and audit-ready. Or the other way around, if you have an in-house bookkeeper, outfit him with proper tools and construct optimizing workflow strategies to keep your books fresh and clean, all the time. Remote accounting is not temporary, it is going to stay. So, get your gears ready to run your accounting amid the work from the home landscape.
Migration to Cloud Accounting
Adding on to the aforementioned point, there is another technology that is not only on the rise but also on the stay. Cloud software is creeping into almost all industries and accounting is no exception. The cloud gives you the ease of network and shared access, that has been power steering our work in this pandemic time. So, if you haven’t migrated your books and accounting processes to the cloud, it is high time you should switch to cloud accounting.
To get you into some basics, cloud-based accounting is the accounting software that is hosted on a remote server. Simply put, you can access, update and share your books from any corner of the globe anytime. By sharing the access to your books with your accountant, he will have a clear overview and live status of your financial flow and provide you with insights where he apparently sees a financial gap.
This greatly tools you to prevent your business from financial leaks and inadequacy in the month ends, before they occur. Or if you are a DIY accountant for your small business, you can easily keep tabs on all your cash flow then and there. You need not be waiting for your employee to run over files in your office. You can even access your records from your smartphone these days with the help of cloud accounting. There are other features like uptime, security, and scalability to consider while you make a purchase.
Embrace Accounting Automation
The word automation usually rings like a more sophisticated term to most businesses. People generally think of giant machines and human-like robots when asked about automation. But getting down to reality, automation has got into our day-to-day lives, right from the autofill option in our smartphones.
Coming to small businesses, more than half of the small businesses have already adopted an automated workflow culture. It takes out the manual elements in the process and makes tasks easier and thus steers productivity.
As a small business owner, you always have tasks on the table. Rather than investing your time in grunt work, you can leave rote-based repetitive tasks to automation and turn back to things that need more attention and detailing. Automations do not cost you fortunes. Nowadays, you get automation tools at a reasonable and affordable cost. When you compare the cost of labor and resources you spend on repetitive accounting tasks like manual keying and bookkeeping, automation would be the smart deal. Also, it is a one-time investment, unlike hiring employees.
Consideration Of Accounting Automation
So, if you are planning to automate your accounting chores, you must consider prioritizing the one that eats up the most time and resources. In light of that, the most time-consuming, labor-intensive, and inefficient task is manual bookkeeping. Fidgeting with a tray full of paper receipts or tangling the numbers in a spreadsheet’s endless rows might not sound smart in this technology-driven business climate. Instead, you can automate the numbers, let them flow into your accounting software automatically.
There are hundreds of third-party applications on the web if you are planning to pick one. Make sure you pick the right one that is reliable and authentic. For instance, if you are using QuickBooks for your accounting, you can try using PayTraQer to sync your online transactions into QuickBooks automatically. These applications work 24/7, unlike humans, and so you will get your books updated even while you are away.
Tighten the Cyber Security Walls
Switching to the cloud is a good turn, but you must fortify your cloud security walls. It is common for small businesses to assume that cyber threats happen only in larger enterprises. But think for a second, if hackers can breach walls of larger perimeters in bigger enterprises, how long is it going to take them to get into your leak hole? So, never take hackers for granted. They often label small businesses as soft targets as you easily fall prey to them.
Always remember, your lethargy in cybersecurity may cost you big scoops of penalty if your records go missing at the time of tax filing. So, leave no room for complacency and educate your team about cyber hygiene measures. Make them understand that they are just one click away from the cyberattack. Implement strong password policies and limited access to buildings and networks. And do not forget to have a sound backup of your accounts and books in multiple locations.
Seize the Advantage of Forecasting Tools
In this digital era, technology has got your back. Add more tools to your accounting squad. In present-day accounting, small businesses are mastering the use of forecasting and analytic applications. You even have intuitive applications that can do your budgets. With these applications by your side, you can have better insights into the cash flow and make clearer decisions.
Having said everything, now you will have some clear ideas on how to drive your accounting process in line with the prevailing trends. Following primitive practices in this rapidly changing business environment is not a smart choice. Whatever is done and said, accounting is one of the prime tasks of any small business and you must run along with these new trends and tools to stay alive in the market and to improve margins.
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