In today’s fast-paced business world, staying ahead of the game requires constant monitoring of your company’s financial health. This is where real-time bookkeeping comes into play.
Small businesses should use real-time bookkeeping to get accurate financial information, make smarter decisions, improve their cash flow, follow tax rules, save money and help their business grow.
Archimedia Accounts is here to shed light on the importance of implementing real-time bookkeeping for businesses. In this article, we will explore what real-time bookkeeping is, its difference from traditional accounting methods, the software options available, and the multitude of benefits it brings.
Archimedia Accounts is a family-run accounting firm serving small businesses in Nottinghamshire. To talk to one of our friendly team and arrange a free consultation, please get in touch.
What is real-time bookkeeping?
Real-time bookkeeping (or ‘cloud accounting’ or ‘online accounting’) is a modern approach to managing business accounts that involves capturing and updating financial transactions as they occur.
This is achieved by using cloud-based accounting software that allows for immediate input and access to financial data. Cloud software is accessible on any computer or mobile device, at any time, anywhere with an internet connection. This makes accounting tasks far more efficient and provides a constant and up-to-date view of your financial status.
What is the difference between real-time accounting and traditional accounting?
Real-time bookkeeping is a game-changer compared to traditional methods.
While traditional bookkeeping involves manual data entry and paperwork, real-time bookkeeping uses cloud-based accounting software that automates data input, offers instant access to financial information, and provides continuous updates.
With real-time bookkeeping, you can say goodbye to delays, errors, and limited visibility. Instead, you’ll have accurate and up-to-date financial insights at your fingertips, empowering your business with the information it needs to thrive.
What bookkeeping software can be used for real-time accounting?
There is a wide range of real-time accounting software options available.
One of the market leaders is Xero, a cloud-based platform that offers automatic bank feeds and data entry, customisable reporting, and real-time collaboration.
Other notable software includes QuickBooks and FreshBooks, both of which provide similar real-time features to streamline accounting processes.
What are the benefits of real-time bookkeeping?
Let’s take a look at the many benefits of real-time bookkeeping.
Peace of mind
There are so many ways that real-time accounting offers reassurance and peace of mind.
By adopting real-time bookkeeping, you can review your finances with clarity and make better decisions.
There will be no last-minute dash to meet HMRC deadlines, and you’ll be in a better position to plan for your tax liability.
Your bills will be paid effortlessly and on time. You will have real-time visibility of outstanding invoices to help make sure you are paid on time.
With multiple user capabilities and live information, there is no need for version control, and you can be sure that everyone, from your accountant to your finance team, is pulling in the right direction.
If all of this sounds too good to be true, then you definitely need to make the move to cloud computing software!
Real-time reporting
Real-time access to financial information allows you to gain a clear and comprehensive view of your financial status. There are no more lengthy waits for financial reports to arrive – the data is available there and then.
This clarity enables informed decision-making, as businesses can identify trends, spot opportunities and threats, and address financial challenges promptly.
Accurate budgeting
A budget creates a financial roadmap for your business, and real-time bookkeeping is an essential budgeting tool.
By having immediate visibility of income and expenses, you can make informed budgetary decisions, adjust spending, and allocate resources effectively.
Business Development
Poor financial records can hinder business growth. Without accurate numbers or data to analyse, it’s not easy to set financial goals. Real-time bookkeeping enables you to identify areas of growth and profitability.
With up-to-date financial reporting, you can evaluate the performance of different products, services, or departments and strategically plan for future development.
Trends become apparent, and you can gain a better understanding of your business cycles and compare figures over different periods of time.
Business planning and forecasting become much more straightforward. This is essential when it comes to obtaining finance, providing evidence of strong financial management to the bank/investor.
Improved cash-flow
Real-time bookkeeping helps you stay on top of your cash flow. By having real-time visibility of outstanding invoices, payment statuses, and expenses, you can effectively manage your cash flow, keep on top of outstanding invoices, and make timely payments.
Compliance with Making Tax Digital
Real-time bookkeeping aligns businesses with Making Tax Digital (MTD), the government initiative designed to streamline and digitise the tax system.
MTD’s purpose is to make it easier for businesses to submit accurate tax information in a timely manner using digital accounting software like Xero.
Get in touch with our bookkeeping experts today
Implementing real-time bookkeeping for your business is a significant step towards financial success.
At Archimedia Accounts, our team of bookkeeping experts is well-versed in Xero and other real-time accounting solutions and can guide you through the implementation process.
Contact us today for a free consultation, and let us help you leverage the power of real-time bookkeeping.
Conclusion
Real-time bookkeeping has become an indispensable tool for small businesses aiming to stay competitive and grow.
By using cloud-based accounting software like Xero and embracing real-time financial data, businesses can make informed decisions, achieve financial clarity, manage cash flow effectively, and ensure compliance with HMRC.
Don’t let outdated bookkeeping methods hold you back. Embrace the power of real-time bookkeeping and unlock the full potential of your business.
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