Why Your Business Bookkeeping Software Needs A Technology Stack
Managing your business’ books is a different process today than it was even five years ago. Cloud-based technology is putting powerful tools into the hands of business owners and entrepreneurs — tools that were once only available to big enterprises. By integrating these business bookkeeping software solutions you can create a powerful, customizable technology stack, with more insight into and control over their books than ever.
Is your business taking advantage of these incredibly powerful software ecosystems?
What Is A Technology Stack?
Less than a decade ago, most bookkeeping processes looked something like this:
Receipts were kept in a shoebox or file folder. Bills and invoices were paid with paper checks. Paper credit card and bank statements were manually entered into a local bookkeeping interface at the end of every month, then reconciled by hand.
Most business owners had no window into key financial metrics, instead trusting their bookkeepers and accountants to enter data correctly and pay bills honestly. The whole process was time-consuming, and errors introduced by data entry mistakes were common.
Today, technology has brought us to the point where we can connect bank accounts, credit card accounts, merchant services accounts (like credit card payment machines), PayPal, and Shopify — all directly into an accounting interface like QuickBooks Online, Xero, or Sage One.
What a technology stack does is take this integration and automation even further, extending it along every step of the process, from expense management to bill payment and reporting. Business leaders often rely on financial KPIs to drive business growth. A proper business technology stack includes software to manage their bookkeeping on the go, as well as to seamlessly manage cash flow by having thorough transparency.
A technology stack is made up of a network of integrated software solutions, which allows individual companies to meet their specific needs, rather than subscribing to a one-size-fits-all service. Businesses can create a customized ecosystem that does exactly what they require.
There are three distinct parts to this ecosystem: expense management, accounting, and bill payment.
The days of matching crumpled paper receipts with bank statements are over. Next time you go buy a cup of coffee, you can use an app like Expensify or Abacus to track and categorize the expense as it comes up. This allows you to manage your expenses on the go, meaning you never forget to allocate a specific expense to a client or lose a receipt. If it’s a cash expense, simply snap a photo of the receipt with your phone so you’re ready to go when it comes time to reconcile your books or speak with an auditor. Keeping track of expenses can help to eliminate time and resources spent on audit preparation services.
The transaction then gets pushed into your bookkeeping software, where it’s already been categorized and annotated, eliminating back-and-forth questions with your bookkeeper.
Our top recommendations:
- Receipt Bank
Modern bookkeeping software connects directly to your credit card, bank account, PayPal, and other accounts in order to automatically capture transactions as they happen. At the end of the month, your bookkeeper can log into the accounting interface and check out the transactions in order to verify the categories and reconcile them.
It’s much faster than waiting for statements to come in the mail and entering them manually. Plus, it significantly reduces the opportunity for human error.
Our top recommendations:
- QuickBooks Online
- Sage One
Related Reading: Getting Started with Nonprofit Accounting & Bookkeeping
Today’s technology tools give business owners a much better approval and accountability system when it comes to paying bills. Incoming invoices and outgoing payments are all captured in one place, letting you see a clear history and authorize payments.
These applications also allow you to set up reminders and make payments on the go, reducing late fees and missed payments.
Our top recommendations:
Setting up Your Business Technology Stack
With so many options out there, how do you get started constructing an technology stack customized to your business needs for accounting and bookkeeping?
Begin by consulting with your professional bookkeeper. They can take a look at your existing processes (how you are currently managing your expenses, reconciling your books, and paying your bills) and look for solutions that automate your most repetitive, time-consuming tasks.
Your professional bookkeeper will also keep in mind the solutions you’re already using (such as your accounting or bookkeeping software), in order to ensure your expense management and bill payment solutions integrate with it.
We at MBS ATA will be happy to answer any questions you might have about setting up your business accounting technology stack. We offer a free 15-minute consultation, and are glad to help.