Accounting and payroll software have revolutionized the way a business approaches these operations. Traditionally, a business utilized basic methods of recording financial transactions and carrying out accounting operations. With time, they started using computers and software to speed up these operations and increase accuracy.
However, financial technology has advanced rapidly in the last few decades and has become more available to small and mid-sized businesses. Today, approximately 64.4% of small businesses use accounting and payroll software. Using software to carry out accounting and payroll operations isn’t only recommended for a business; it has become necessary to have a competitive edge.
Let us discuss the benefits of accounting and payroll software for small and mid-sized businesses.
Why Should You Use an Accounting and Payroll Software?
Accounting and payroll software is crucial not only for financial operations but also for the employees, and management. You might have a basic idea of how the accounting and payroll software can speed up record keeping, generate instant reports, and create powerful insights.
These reports, business analyses, and insights help businesses understand the cash flow and find the scope to reduce expenses and increase profit. Moreover, the cash flow metrics and KPIs, rich tax research, and business analysis play a considerable role in decision-making.
Another way the accounting payroll software influences businesses is through its effect on employees. For most of the employees in your company or small business, their greatest motivation to work is the regular paychecks and employee benefits.
However, if the paychecks are not deposited in a timely manner, or there are regular mistakes in calculating the wages or compensation, it influences their enthusiasm. This can inhibit them from working with high motivation and giving their all to the company.
Inaccurate, inefficient, and troublesome accounting and payroll operations also create more work for the employees and management to look after. This not only wastes their crucial time but also wastes company resources and ends up in significant losses.
To fix these issues, it is compulsory that a business, regardless of its size, should shift to accounting and payroll software.
Benefits of Using Accounting and Payroll Software
Accounting and payroll software come with multiple advantages. Let us look at these benefits one by one and understand how they enhance your business performance and profitability.
1. Simplify Record-Keeping and Paperwork
A business needs to keep accurate records for tracking business expenses, optimizing business deductions, generating accurate financial reports, calculating tax returns, etc.
However, invoices, receipts, paperwork, and financial documents can clutter your cupboards and prove to be too hard and time-consuming to organize.
Another thing to note here is the inaccuracy that comes with the humane task of organizing paperwork and inputting this data. You can easily miss a transaction or input the wrong amount.
This is just an example of many ways traditional record-keeping affects the financial health of the business. To aid that, businesses now use accounting and payroll software that comes with a revolutionized way of entering and maintaining your records.
You can keep track of the tax-deductible business expenses and benefit from them when it’s tax season.
Moreover, it has multiple advantages like keeping digital records and sorting them automatically, tracking expenses accurately, and reducing time spent on record keeping. These software makes invoicing, account receivable payment, and account reconciliation effortless.
2. Update Employee Information on the Go
There are many instances when you need to change the information. For example, you hire or relieve an employee, or an employee changes their address, gets married, or has a child whose dependency on the employee changes. In such cases, you will need to update the employee information.
However, updating employee information using traditional accounting methods can be tedious. Through modern accounting and payroll software, you can update employee information on the go and even invite employees to contribute to these updates.
3. Accessible and Convenient
Paperwork and physical reports are not easily accessible, and you cannot carry everything around. However, the accounting and payroll software lets you access your company data from anywhere. This is because of the advent of cloud accounting and other financial technologies.
Thus, you can log in to your company account from anywhere on any device and carry out the accounting and payroll operations. This is more convenient, fast, and highly secure.
4. Regular Healthcare and Retirement Contributions
With the advent of accounting and payroll software, making regular contributions to employees’ healthcare and retirement funds is easier. The software makes it easier to calculate tax exemption, deduction, gross taxable income after the contribution, and wages, to name a few.
Moreover, the employee can explore many options and change as per preference without any lengthy procedure for updates.
5. Fast Process of Benefits and Compensation
Thanks to the payroll accounting software, it is no longer tedious to calculate the company expenses that an employee paid for and provide them with compensation for the same.
Similarly, these software helps the bookkeeper or accountant calculate the amount for different reimbursements and benefits the employees are eligible for and include them in the paychecks without fail.
Thus, accounting and payroll software contribute greatly to increasing employee satisfaction in the workplace.
6. Automated Direct Deposits
Accounting and payroll software simplifies payroll operations by automating direct deposits. Therefore, there is no need for businesses to spend time sending paychecks to an employee.
Instead, when the data is fed, it is calculated and scheduled to be sent automatically to the employees. Moreover, these accounting and payroll software offer alternative ways to send payments.
7. Accurate Tax Calculation and Filing
Payroll operations entail more than just calculating and sending employees’ wages on time. The company needs to calculate taxes and file them to the IRS.
Moreover, the situation gets complicated when the companies file taxes to the IRS on behalf of the employees as well, which is the case in most of the companies in the USA.
Most companies offer medical insurance and other benefits to employees, which makes calculating payroll taxes difficult. However, the accounting and payroll software help the employers calculate these taxes accurately. They allow the business to benefit from available concessions and tax deduction optimization.
8. Data Security
Accounting and payroll software comes with high-grade security. Moreover, they use advanced financial technology like cloud accounting, which helps in preventing malware attacks, corruption, and other cyber threats. However, it all depends on the accounting and payroll software you use.
Top Accounting and Payroll Software for Small Businesses
Choosing your accounting and payroll software is a crucial step. This is why we have listed some of the best accounting and payroll software for small businesses. Check these out and then choose the right one as per your business requirements and budget.
1. Intuit QuickBooks
Intuit QuickBooks is the most widely used and one of the best accounting and payroll software for small businesses. It suits overall accounting and helps you carry out payroll operations smoothly.
QuickBooks simplifies record keeping, invoicing, bank reconciliation, account management, etc. It helps employers to file W-2 forms and provides updated tax tables and rates.
It has multiple plans to choose from depending on your business requirements. QuickBooks offer both online and desktop version. It also comes at a discounted price of 50 percent in the promotional periods.
2. Zoho Books
Zoho Books comes with a 14-day free trial, meaning you can experience its services without risking much. It offers GST compliance, a mobile app, automation, and connected banking features. Moreover, with the help of Zoho Books, you can collaborate on the go and customize the application as per your requirements.
Moreover, Zoho Book makes managing foreign transactions in different currencies simpler.
Xero is beneficial for the accounting and bookkeeping of a startup. It helps you enter bills, send invoices, and reconcile transactions and gives you a cash flow snapshot in the short term.
Xero offers a 30-day free trial. Thus, you can experience its services for free and only continue if you like it.
Sage is a popular accounting software for businesses in the USA and abroad. It helps you access your data from anywhere and anytime with the cloud technology.
Sage allows you to manage the accounting and bookkeeping operations like a pro and handle the cash flow, income, expenses, and payments. There is a lot you can do with Sage, such as controlling job costs, tracking inventory, streamlining your banking, connecting to the cloud, and analyzing real-time reporting.
Sage also offers payroll services that help you automate paychecks, calculate wages and taxes effortlessly, and track employee benefits.
If the 30-day free trial is what you need to test out the accounting software before you settle for it, add FreshBooks to your list besides Xero. Moreover, when you decide to go for it, look for promotional offers of 50 or 75 percent off for three months.
Up to 50 of your clients can receive infinite invoices from FreshBooks, among other features.
Some of these features are:
- Automatically track expenses
- Automatically obtain receipt information
- Email invoices directly to your account
- Forward an infinite number of bids and estimates
- Accept payments via bank transfers and credit cards.
- Establish client retainers and recurring invoices
- Generate reports on the health of your business.
- Execute accounting and financial statements.
You can access it from your personal computer, iOS and Android.
Outsource Accounting and Payroll Operations
You might ask what the most salient benefit of outsourcing accounting and payroll operations is. It is the peace of mind the businesses experience after outsourcing these operations to a professional.
True, you can carry out these operations using accounting and payroll software. However, it will require you or your employee to spend hours on the software, which becomes quite expensive, including the cost of the accounting software.
Outsourced accounting services offer numerous features that a small or mid-sized business must use to grow and flourish.
Some of these are high-quality accounting operations, accurate and timely payroll operations, tax preparation and filing, in-depth tax research, increased profitability, and enhanced performance.
A free trial of our outsourced accounting, payroll, and business taxation services will help you understand the difference. Dial +1(800) 580-5375 now and connect with our advisor.