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How Online Accounting Software Can Help Your Small Business
Let's start by reviewing some of the ways invoice management can help your small business stay healthy and prosper.
The advent of online accounting software for small businesses has revolutionized how small businesses handle their financial accounts. Entrepreneurs may no longer need bookkeepers and accountants to handle essential functions.
And online accounting software for small businesses goes well beyond what traditional bookkeeping software set out to do. A good, comprehensive platform allows small business owners to manage their financial accounts, transactions and records efficiently. With online accounting software, small businesses can easily create and send professional invoices, track expenses, reconcile bank transactions, process sales taxes and generate essential financial reports such as balance sheets and profit and loss statements.
The primary goal of online accounting software for small businesses is to simplify accounting tasks—especially for users without extensive accounting knowledge. By automating processes like data entry and calculation, even the easiest accounting software solutions minimize the risk of errors and save valuable time for business owners. This allows them to focus on other critical aspects of running their businesses. Additionally, online accounting software provides real-time access to financial data. Small business owners can gain valuable insights into their business's financial health and make quick, data-driven decisions to achieve growth and success.
These online platforms differ from previous accounting software by existing in the cloud, rather than being downloaded into your office computer. You don't own the software, it's stored on servers. Also, you pay a monthly fee, in most cases, for using the software and accessing your data.
In this article, we'll explore the benefits of online accounting software to help small business owners choose the best accounting solution for their specific needs.
Benefits of online accounting software
Running a small business means juggling multiple responsibilities. Between managing operations, serving customers and marketing your products or services, it can be easy to overlook the importance of efficient accounting practices. And yet, lax accounting processes can lead to serious consequences, including financial mismanagement, tax errors and missed growth opportunities. Here are some of the key advantages of using online accounting software:
Securely send and receive invoices
Generating and managing invoices is a fundamental aspect of any business. With online small business accounting software, you can create professional invoices, customize them with your logo and brand information and easily send them to your clients. These platforms also often come with automated reminders for overdue payments, helping you maintain a steady cash flow and keep tabs on any outstanding items.
Accept debit and credit card payments
Consumers want the convenience of using a multitude of payment options these days, so it's important to offer that capability. Online accounting software can integrate with a payment processor, allowing you to accept debit and credit card payments directly from your invoices. This keeps customers happy and helps you collect on your invoices sooner.
Connects to your business checking account
Linking your business checking account to the accounting software gives you access to real-time updates of your bank transactions. It simplifies the process of categorizing income and expenses, streamlining your income and expense tracking. This feature is particularly valuable for very small business owners who handle multiple transactions daily.
Streamlined cash flow
Online accounting software offers tools to monitor and forecast cash flow, helping you identify potential cash shortages and plan accordingly. By having a clear view of your cash flow, you can make informed decisions about investments and expenditures.
Reduces errors and saves time
Automated accounting processes significantly reduce the risk of costly manual errors. The software simplifies and minimizes the need for data entry and handles calculations and reconciliation. This saves you time and minimizes the likelihood of inaccuracies.
Easy tracking and reporting
Online accounting software keeps all your business data in one place and uses sophisticated tools to analyze it. It's easy to generate financial reports and forms, such as required reports and forms at tax season, monthly updates to share with employees or potential investors, inventory tracking to review with suppliers, reports on key performance indicators and more. The software turns data that used to sit in filing cabinets into a valuable tool that you can tap with ease.
Access to accounting tools
Most online accounting software offers a wide range of accounting tools and features. They also may be offered as part of a suite of products that might include project tracking, inventory management and the ability to process payroll. These online tools can scale with your business as it grows and updates automatically. There's no need for you to download updates.
What to consider when choosing online accounting software
Selecting the right software for small business is a critical decision. When searching for the best accounting software, consider the following factors:
Essential functions: Invoicing, payment processing, and reporting
You want software that has excellent core strength. Evaluate the software's capabilities in terms of invoicing, payment processing and reporting. Make sure the platform allows you to create and send professional invoices, process payments securely and generate detailed financial reports. These functions are the heart of any accounting software, so find the software that works best for you in these three areas.
Price and features
Compare pricing plans to find one that suits your budget. Assess the accounting features included in each plan and determine which ones align with your business needs. While it's essential to keep costs under control, prioritize functionalities that will support your business's growth.
There are free accounting software options, but they tend to offer limited capabilities. For example, you may be limited on the number of bank accounts you can connect, or you may be able to provide invoices for up to five clients only.
Ultimately, it’s most important to find the option that meets your needs. For paid plans, the benefits should justify the accounting software cost.
Type of software
Understand the different types of accounting software available. Open-source accounting software provides flexibility and the option of customizing it to suit your needs—if you have the technical expertise to do that. At the other end of the spectrum are enterprise resource planning solutions—also called ERP accounting solutions. These paid services will integrate accounting functions with almost all other aspects of your business.
Small business online accounting services at TD Bank
TD Bank offers a comprehensive and user-friendly accounting software solution powered by Autobooks, a trusted technology partner of TD Bank.
Our online accounting software for small business provides the tools you need to manage your financial and business bank accounts efficiently. From expense tracking to financial reporting, TD Bank's platform is designed to support your business growth.
With the TD Accounting for Small Business platform, you can get your financial operations up and running quickly. You can create and send secure invoices and accept debit and credit card payments directly to your TD Bank account.
Customers can pay your invoice or payment link with any major credit or debit card, or via ACH payment. You can also take payments in person using the TD Online Accounting payment form, which doubles as an in-app terminal.
The payments will be paid directly to your TD Small Business Checking account, typically within 1-2 days1. This efficient process means you will generally collect payments faster: about 95% of all invoices are paid within 5 days2. Additionally, you can track payments within the platform with Small Business Online Banking. You will not need to create or use any other spreadsheets or complex software.
Ready to get started? Learn more about TD Bank’s Online Accounting for Small Business