If you haven’t yet connected your business bank account to your accounting software, you may want to reconsider. Doing so makes it easier to manage your cashflow and
make better decisions.
There are now many apps and online platforms designed to make your life as a small business owner easier. Accounting software is one such app. It enables you to manage your business financials from one platform — giving you better insights into your profitability and financial health. Even better, your business bank account can be linked to your accounting software to further streamline your operations.
Here are eight reasons you should consider linking your business bank account with your accounting software.
1: Real-time financial insights
When your bank account is linked to your accounting software, you get a real-time snapshot of your financial position. This allows you to make informed financial decisions promptly. You can see exactly when money is deposited into and transferred from your account, and ensure it lines up with your revenue and expenses. Your ledger is continually updated with the latest banking activity — seeing your bank balance updated alongside your accounting balance also allows you to identify and act on any discrepancies between the two.
2: Streamlined reconciliation
This is a significant benefit of linking your bank account and your software. Reconciliation involves ensuring two sets of records — typically the balances of two accounts — match. With linked accounts, your transactions are automatically imported into your software. You don’t have to manually enter each transaction, eliminating the risk of entry errors. The software can also highlight inconsistencies with your bank records for review. Because it’s so easy to conduct reconciliation, you may choose to reconcile your accounts more frequently, which means you’re even more likely to catch any issues early.
3: Enhanced cashflow management
Instant updates from your bank or credit union enable you to monitor your cashflow more effectively. The flow of cash into and out of your business will be more transparent. Because every financial movement is recorded and accounted for, you won’t miss any transactions. You’ll also have clear visibility into who has paid you and when, so you can track who owes you money. You can also set up timely alerts to help you make fast decisions to address cashflow issues.
4: Automated transaction importation
A major issue in small business accounting is the risk of human error. Errors often occur during data entry, when transactions are manually recorded or moved from one accounting system to another. With automated transaction importation, the risk of errors is greatly reduced. Every transaction is automatically recorded in your software, increasing accuracy in your reporting. Where there are discrepancies or inconsistencies, the platform will alert you, allowing you to act quickly to solve the issue.
5: Accurate and timely tax information
Your cash inflows and outflows are automatically recorded in your accounting software. This means you have more accurate and timely information for your taxes. Every expense paid from your bank account is recorded, so you can easily keep track of your expenses at tax time. No more hunting through files for missing receipts; every dollar you spend is tracked and recorded. This means you can maximize your deductions in your tax return.
6: Time savings
Accounting activities are often among the most time-consuming responsibilities for a business owner. If you don’t enjoy data entry or account reconciliation, you might even put them off so they take even longer to complete. Linking your business bank account to your accounting software saves you the time and energy of manually entering transactions and ensuring they’re accurate and up to date. With fewer errors, you’ll spend less time finding and correcting errors, omissions, or duplicate entries. Account reconciliation, report creation and invoice matching are all done either automatically, or much more quickly. Expenses are more easily tracked and categorized. This frees up your time to focus
your energy on strategic activities and business growth.
7: Simplified expense tracking
Expense tracking is foundational to cashflow management. Connecting your business bank account to your accounting software simplifies expense tracking. Every expense is automatically imported and recorded into your software, ensuring they are captured without additional input from you. Many systems use algorithms to recognize and categorize recurring expenses, taking care of expense categorization for you. You can view your expenses in real time and create tailored expense categories to ensure expense tracking meets your needs. Some software enables you to attach digital receipts to your transactions, further simplifying the process of matching your receipts to your expenses.
8: Easy collaboration with professionals
You can share permission without giving up control of your finances. Gone are the days of taking shoe boxes of receipts and invoices to your accountant or bookkeeper. With accounting software, you enable remote access to your platform, so your accountant, bookkeeper or other business advisors don’t have to be onsite orhave physical copies of your records to provide assistance. With real-time data sharing, professionals always have access to your most current financial data. This means their advice is relevant to you now. Many platforms enable in-app communication or note taking tools. This makes it easier to communicate within the platform as you need, rather than waiting for an appointment. Role-based permissions mean you can grant permission to professionals to view and correct data without enabling them to execute financial transactions. In case of an audit, there will be a clear and chronological record of your transactions — which is invaluable to accountants.
Next steps
Integrating your business bank account with your accounting software saves you valuable time, money, and energy. It also enables you to make informed, strategic decisions about your business. If you don’t have accounting software, explore your options to find the platform that works best for you. Make sure the one you choose can integrate with your business bank account.
Often, the platform will offer a simple process for linking your business bank account. You can also talk to one of their customer service representatives for more information. Furthermore, your accountant or bookkeeper might have a system they recommend, too. Talk to them for their thoughts.
The Stuff We Need To Say
This content is for general information purposes only. It is not to be relied upon as financial, tax, or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. You should consult your own professional advisor for specific financial, investment, and/or tax advice tailored to your needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.
