As a small business owner, you know how important it is to keep track of your finances and manage your data, and you may have invested in accounting software to help you with tasks like bookkeeping, payroll, invoicing, and reporting. Accounting software can be a great tool for data management, but it cannot replace the human insight and expertise that a local small business accountant can provide.
Accounting Software Strengths: Data Management
Accounting software can help you with various aspects of data management, such as:
Bookkeeping and transaction recording:
Accounting software can automatically record your income and expenses, categorize them, and reconcile them with your bank statements.
Accounting software can generate financial statements like income statements, balance sheets, and cash flow statements, as well as other reports like budgets, forecasts, and tax returns.
Accounting software can calculate wages, taxes, deductions, and benefits for your employees, and generate pay stubs and tax forms.
Accounting software can track your business expenses, such as travel, meals, supplies, and utilities, and help you claim deductions and reimbursements.
Invoicing and accounts receivable:
Accounting software can create and send invoices to your customers, track payments and overdue balances, and send reminders and receipts.
Accounting software can monitor your inventory levels, costs, and sales, and alert you when you need to reorder or restock.
Accounting Software Limitations
While accounting software can handle many data management tasks efficiently and accurately, it also has some limitations that you should be aware of, such as:
Requires user expertise:
Accounting software is not a magic solution that does everything for you. You still need to have some accounting knowledge and skills to set up the software correctly, enter the data accurately, choose the right reports and settings, and troubleshoot any issues that may arise.
Inability to help users understand problems and requirements:
Accounting software cannot tell you what your specific accounting problems and requirements are. For example, it cannot advise you on what accounting method to use, what tax laws to follow, what financial goals to set, or what accounting standards to comply with.
Inability to interpret data:
Accounting software can generate reports and graphs based on the data you enter, but it cannot explain what they mean or how they relate to your business performance. For example, it cannot tell you why your profit margin is low, why your cash flow is negative, or why your inventory turnover is high.
Limited ability to adapt data to specific business questions and challenges:
Accounting software can provide you with general information and insights based on the data you enter, but it cannot tailor them to your specific business questions and challenges. For example, it cannot help you analyze the profitability of a new product line, the feasibility of a new market expansion, or the impact of a new competitor.
Working with a Local Small Business Accountant
If you want to get more out of your accounting data than what accounting software can offer, you should consider working with a local small business accountant. A small business accountant can provide you with services that accounting software cannot, such as:
A small business accountant can help you understand what your data means and how it affects your business performance. They can explain the financial statements and reports generated by the accounting software in plain language, highlight the key indicators and trends, and provide recommendations for improvement.
A small business accountant can help you comply with the relevant accounting laws and regulations that apply to your business. They can advise you on the best accounting practices and methods for your industry and situation, prepare and file your tax returns correctly and on time, and represent you in case of an audit or dispute.
Financial & Business Planning:
A small business accountant can help you plan for the future of your business based on your data. They can help you set realistic financial goals and budgets, forecast your cash flow and profitability scenarios, evaluate your financing options and opportunities, and develop strategies to grow your business.
Working with Haworth & Company, Ltd.
If you are looking for a local small business accountant who can provide you with all these benefits and more, look no further than Haworth & Company Ltd. We are a certified public accounting firm that specializes in serving small businesses in various industries. We have over 30 years of experience in providing accounting services that go beyond data management. We offer personalized attention, customized solutions, proactive advice, and affordable rates. Contact us today to schedule a free consultation and find out how we can help you take your business to the next level.