Your business shouldn’t rely too heavily on accounting software
Technology has evolved greatly in the past few decades, improving productivity and providing many useful tools to business owners. A good example is business accounting software which has drastically reduced the time and manpower it takes to document and track financial data. What a computer program can’t do is identify accounting mistakes like input errors, omissions, and fraudulent activity.
Whether you’re running a small business or large corporation, relying on accounting software for all of your financial transactions and reporting without human oversight can land you in hot water. Having a system in place to catch and correct errors or illegal activity is vital to the financial health of the business.
The guidelines should cover both short and long term tasks, including everything from day to day management of the books to annual accounting tasks, like producing the yearly balance sheet and profit and loss statement.
The earlier you catch an accounting error, the better chance you have of preventing a financial disaster down the line.
When was your last audit?
Even if you use an automated accounting system, you’ll need to perform manual audits on a regular basis. This could be daily or weekly, depending on the type of business and the volume of transactions you record. And, prior to issuing financial statements, your accountant should perform a reconciliation on all of the balance sheet accounts. And they should reconcile monthly bank statements against the cash account in the general ledger.
Putting these failsafe practices into place helps protect you from common problems with business accounting software, like the inability for a computer program to catch typos. And you may want to have a financial audit performed by a third party at certain intervals to ensure that your books are in order before major deadlines such as tax filings.
Be aware of your business’ financial well-being
Business owners have a lot of responsibilities and only so many hours in the day to fulfill them. While it may be tempting to rely heavily on accounting software in the short term, telling yourself you’ll get to the bookkeeping and accounting at some point in the future, it’s vital to the well-being of your business that you stay current on financial matters. Companies like GYL can help.
We provide accounting services for businesses that can be anything from day to day management of the books to preparing financial reporting to performing audits. Call today for a free consultation and let us help you keep your business running smoothly.