When you're running a small business, it's easy to get bogged down by the minutiae of day-to-day tasks, whether it’s managing inventory or handling customer inquiries. However, it’s important to regularly zoom out and evaluate the big picture, especially when it comes to your financial health.
That said, the accounting process for small business owners can be overwhelming. Not only is it tedious to ensure accurate bookkeeping and compliance with tax regulations, but tracking and transferring information across disparate systems can also be time-consuming. If you’re not careful, errors can proliferate, leading to costly financial discrepancies.
Luckily, accounting software integrations and automation of accounting processes can help simplify these tasks, freeing up time for other priorities. Read on as we go beyond accounting basics and explore innovative strategies to level up your financial management.
Automation in accounting refers to using software to perform routine, repetitive tasks that traditionally require manual input – think data entry, invoice generation, and financial report preparation.
For example, an online fashion retailer might use automation to streamline its entire billing cycle. When a customer places an order, the system automatically generates and sends an invoice, updates inventory levels, and records the sale in the financial ledger, with no manual intervention needed.
Accounting software integrations refer to technologies that connect various applications to allow seamless communication and data exchange between them.
Take a small bookstore, for example. If it uses a POS system integrated with its accounting software, every sale at the cash register can immediately be reflected in its financial accounts. This ensures that the inventory levels on the bookstore's management system are automatically adjusted to match sales data, keeping records consistent and updated.
More than 70% of today’s small business owners rely on accounting software or apps to manage their finances.1 Meanwhile, 48% of accountants expect to invest in and adopt automation tools in 2024.2
So, why the strong trend toward digital transformation? Here are some of the top benefits of integrations and automation in accounting:
From streamlining invoicing processes to maximizing the benefits of your POS system, read on as we explore ways to reduce errors and save time.
Accounts receivable is key to maintaining a healthy cash flow – by keeping a tight rein on this process, businesses make sure they get paid on time and can continue to invest in their business's growth.
Here’s how integrating and automating billing and invoicing can automate accounts receivable:
Point of sale (POS) systems are more than just tools for processing transactions – they’re integral to simplifying the accounting process for small businesses. By integrating your POS system with your accounting software, transaction data is automatically transferred and synced between the two systems.
The benefits of a POS accounting integration can be massive – you avoid the manual entry of sales figures, reduce the labor involved, and minimize the chances of human error. You also guarantee that financial records are up-to-date and accurate, providing a real-time overview of the business's financial health.
A particularly useful feature of some modern POS systems, like PayPal Zettle, is the integration of geolocation data. Since ZIP codes do not always align precisely with sales tax jurisdictions, relying on them can lead to inaccuracies in tax calculations. Geolocation data, however, pinpoints the exact location of a sale, ensuring that the correct sales tax is applied based on the specific jurisdiction.
This capability can be invaluable for businesses operating in multiple locations, such as vendors at festivals or pop-up shops.
"It helps me so much when I must account for where I’ve made sales when it comes to accounting for sales taxes to be filed."
— Kerry Mackart, founder of Ohio Kimono
Considering that 37% of small business owners and other self-employed workers reported feeling anxious or confused about filing their taxes,4 embracing these features could be a game-changer in reducing tax errors and increasing compliance assurance.
Shipping is one of the biggest challenges that can sour a customer experience – today’s shoppers expect speed, accuracy, and transparency in delivery. It’s not just about receiving their packages at their doorstep swiftly; they also want to know where their package is at any time. Failing to meet these expectations can lead to dissatisfaction and lost business.
While shipping logistics might not be the first thing that comes to mind when thinking about accounting efficiencies, it plays a pivotal role in streamlining ecommerce operations. Here are several ways that shipping integrations can significantly enhance accounting processes:
You’re probably aware of the benefits of going paperless – from eliminating the need for physical storage to reducing clutter to streamlining record-keeping. That said, the transition can still be daunting, especially if you’ve spent years relying on legacy processes that have worked well or if you’re wary of adopting new technologies.
Luckily, with the right accounting integrations and automation tools, embracing a paperless system is achievable. Here are some key aspects of paperless accounting:
One way to streamline this digital transition? With PayPal.
“PayPal really helps me get my online accounting basics in place since I have a single workflow to get paid, manage my online shipping, and have all my financial data integrated with my account.”
— Kerry Mackart, founder of Ohio Kimono
PayPal’s integrations and automation features are designed to help transform how you manage your accounting and business operations. By facilitating electronic payments that seamlessly integrate with your accounting software, PayPal helps your financial data flow efficiently without manual input, helping you reduce errors and save time.
From invoicing to expense management, discover how PayPal can streamline accounting processes and help solve your financial headaches today.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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