Benefits of Digital Bookkeeping for Small Businesses

Tuesday, 12 Apr 2022

The world has been making a transition toward the digital medium. From shopping for groceries to buying aeroplane tickets, everything is happening online. Consequently, both big and small businesses are moving towards digitalisation to keep pace with the changing buying behaviour and industry trends.

Besides automating operations, most businesses are now relying on digital bookkeeping with the help of their professional bookkeepers Melbourne. These professionals use cloud-based accounting software that has reduced the age-old process of manual data entry.

Digitisation has proven to be a boon for bookkeeping companies as they do not have to waste hours and streams of paper doing calculations. It aids in streamlining accounting and helps in effective financial management. So, here is a list of benefits that small businesses can leverage through a digital bookkeeping system.

1. Improved Productivity

Entrepreneurs in Melbourne don’t have to worry about recording daily transactions, generating reports, complying with tax regulations and understanding tax deductions. All these tasks are efficiently performed by the bookkeeper with the help of accounting software.

There is no manual labour involved in these tasks and they are automated through the recordkeeping system. Also, there is no scope of error in the calculations and the tabulations because it is done by the computer.

The work that took hours earlier can now be performed within minutes and without any effort. The digital format allows the business owner in Melbourne to retrieve any financial information from the past and present financial years for analysis. It helps them to make informed business decisions and invest wisely. It frees up their time that can be utilised in various other significant tasks.       

2. Better Organisation

The best part about digital bookkeeping is that everything is organised in one place in chronological order. Whether it is invoicing, importing transaction data from the bank or evaluating expenses, the business owner can get all the information in one place.

It helps in controlling the finances and managing them without any hassles of going through scores of unidentified files and data. It gives the business owner in Melbourne an insightful peek into the financial health of the business with comprehensive and detailed reports.

You can plan your expenses and pay your taxes without incurring any penalties. With all the receipts and expense records in one place, you can claim tax deductions and conducting an audit becomes easier than ever.

3. Quick Access to Data

Another advantage of digital bookkeeping is having the financial data at your fingertips. The software extends the benefit of accessing real-time financial data anywhere and at any time.

The business owner and the authorised employees can use a computer, laptop, or smartphone to check the latest reports and transaction summary. The software can be integrated with the business bank account in Melbourne so that expenses, stock and incomings can be tracked by the management in real-time.

They can use the dashboard to have a quick look at the parameters they want to follow regularly. Thus, there is no need to wait for bank reconciliation as it can be done instantly online.      

4. Reduced Expenses

Digitisation has helped in making businesses in Melbourne cost-effective because of the reduced time consumption and increased efficiency. Accounting software brings automation and decreases wastage of time and money by doing away with accounting errors and tax penalties.

The usage of paper in the accounting department is negligible as all the data is stored and managed online. Since every financial document is created and shared online, the business becomes sustainable with minimal paperwork.

It also helps in quick collaboration and offers the chance of working from home or remote working as all the data can be accessed online.

 5. Faster and Easier Process

Working on bookkeeping software is easier than expected. The senior management can quickly understand the dashboard and the features that allow them to generate reports and look at other relevant information.

The speed of processing data is reduced considerably as the results are available in seconds on the digital medium. All the repetitive tasks such as invoicing and recording transactions can be automated.

The software can even aid in automating payments to the suppliers in Melbourne, which reduces the massive workload on the shoulders of the bookkeepers and makes them available for financial advice and analysis.   

6. Secure Information

Using cloud-based software is the easiest way to secure the financial data of the business. The classified information is highly sensitive and cannot be leaked in the public domain. The software uses encryption algorithms that safeguard the data from hackers and breaches.

With real-time updates, the data is always synced and protected from external threats. Cybercrime has been growing at a fast pace and this has been a cause of concern for Melbourne-based small businesses.

Any breach can cause destruction and loss of data and cost the business a lot of money and lose the trust of customers. The accounting software helps in this regard by offering data backup and complete security.  

7. Customisation and Flexibility

Technology has made it possible for bookkeepers to customise the accounting software as per the needs of small businesses. Personalisation is necessary because every small business in Melbourne is unique and has its own accounting requirements, depending on its size, number of employees, type of business, type of products, market size etc.

Thus, customising the software aids in transforming it according to the accounting needs of the business. It is easy to scale up when you are using digital bookkeeping instead of a manual data entry system.

You do not need to hire more bookkeepers and accountants or gather more supplies when your business grows. The software is scalable and can accommodate growth without any problems. Thus, growing businesses prefer a digital recordkeeping system.      

Conclusion

Digital bookkeeping is becoming a preferred way of financial management because of the comfort, cost-effectiveness, and improved efficiency. Most bookkeepers in Melbourne suggest using accounting software to make the system robust, fast and result driven.   

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