Every small and medium enterprise (SMEs) have a different Financial Year (for example, Jan – Dec, Apr-Mar, July – Jun). In the last quarter of every year, most SMEs will be preparing to close their books for the current financial year as they start the new year. This is a good time to look back at the year that was, review the company’s performance, and set improvements for the next financial year.
Around this time, the business should be preparing its year-end reports that should show an accurate picture of its financial performance for the full year. Armed with such data, SMEs can make definitive plans for the next financial year and initiate changes to get ahead in the market.
To get the company ready to end the financial year, all expenses for the current year must be filed and payments must be collected. All accounts should be updated and the figures should tally. The company’s files, including the sale invoices and receipts, should be kept in order. Doing these would save SMEs a lot of time when they run their year-end reports.
Having reliable data on the year that was and financial reports that detail what the company is doing right and which aspects are lagging behind can help the business map out its goals for next year. It also allows the company to check its financial health so it can set itself to do better the following financial year. In addition, investors and banks would be interested to look at these reports for possible partnerships and when securing a loan.
But for SMEs that find it difficult and stressful to sort out their finances and business transactions every time they end their financial year, there is one crucial decision to be made before the new year begins – getting accounting software.
Timing is everything
To set the company for the new financial year, now is the best time to invest on an bookkeeping software. This would improve the bookkeeping, monitoring, record keeping and accounting processes of the company, giving it a good start for the next financial year.
Having such business tools in place just before the start of another financial year not only sets the tone for better operational efficiencies, but also enables SMEs to save time to focus more on growing the business, improve the accuracy of financial data and generate reports for more informed decision-making and strategic planning.
And for SMEs that are still filing their receipts and sales invoice in hard copies, storing them in boxes and filing cabinets so they can dig through the papers again by the time the accountant needs to work on the company’s books, it is high time to get automated.
Stacks of papers are a lot of information to go through. This manual and time-consuming method of storing documents must end now. The new financial year should welcome automation, allowing technology to help SMEs manage the business.
A fully automated bookkeeping software enables a company to capture the data and store it so the business can keep track of its expenses and receivables in a more orderly fashion. It is also easy to search data and check historical transactions since everything is stored in one place and is even accessible via the internet, through any device.
With all the data available and the tools provided for account preparation, the bookkeeping software removes the stress in generating the yearend reports and the panic to beat the
deadline at the close of the current financial year.
Start the year right
As SMEs begin a new financial year, they can improve their performance by keeping track of what’s going on in the business through real-time reporting. Bookkeeping software can do this. It can tell how the company is faring financially on a regular basis, either weekly, monthly or quarterly. It can pinpoint which business units are making money and those that are underperforming.
It can also help manage cash flow by tracking the slow payers and those with an outstanding balance. Moreover, aside from the profit and loss and the balance sheet, it can even automatically generate the quarterly GST return and the yearly tax return.
Using bookkeeping software at the start of a new financial year has its advantages. It can get the company ahead of the pack and even head off issues before they arise or cause problems to the business.
So during the fourth quarter, get an bookkeeping software in place to herald the start of a new financial year. You can consider Moneyworks Bookkeeping Software.
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