- Digital bookkeeping removes the factor of error present in manual bookkeeping and also streamlines areas such as data entry and auditing
- Tax compliance becomes even more manageable with the utilization of digital bookkeeping
- Digital bookkeeping has been made accessible for all, such as small and medium-sized businesses, with the help of third-party digital bookkeeping services
Bookkeeping is a tedious process which involves having to take into account several transactions consistently. With that in mind, it makes sense that it would be challenging to ensure your business stays tax compliant. Fortunately, with the advent of technology, there are ways to make it more manageable.
Nowadays, it is common for a business to have some form of technology integrated into its operations. For example, many businesses order most supplies via an online platform, be it through e-mail or a digital application. The point-of-sale system is another advancement utilized by many sales-centered businesses, keeping track of things like transactions and inventory.
Bookkeeping is another perfect example of a business process that has become digitized. But, just how does incorporating technology into bookkeeping make a difference in a business? Read on and find out the difference digital bookkeeping can make for your company.
The Challenge of the Traditional Bookkeeping Process
The conventional or traditional method of bookkeeping involves having to manually record financial transactions into physical ledgers or basic computer systems. This method often involves categorizing expenses, reconciling bank statements, and ensuring all financial records are consistently updated and maintained, which demands significant attention to detail and meticulousness.
However, there are many pitfalls that come with this method. For example:
- Missing out transactions: This can occur due to simple oversight, fatigue, or when the volume of transactions becomes overwhelming.
- Calculations may be inaccurate: ​​Manual calculations are susceptible to human error. Even simple arithmetic mistakes can lead to major discrepancies over time.
- Records may not be updated: This delay in recording can prevent real-time financial analysis and may complicate the management of cash flow, hindering timely strategic actions.
- Staying manual is costly: Manual bookkeeping requires more labor, which can lead to higher staffing costs. Additionally, the time spent on repetitive tasks that could be automated is a hidden cost, as it diverts resources away from more productive activities.
Along with the stringent tax compliance requirements a business has to face, one can face several problems if the numbers do not add up. This is where digital bookkeeping can help.
The Digital Transformation of Bookkeeping
Digital bookkeeping has several advantages compared to its traditional predecessor. There are also several other benefits that can enable a better-operating business should it go digital, helping promote its growth.
Stay Updated in Real Time
Through digital bookkeeping, you can get real-time updates, making it easier to track transactions. So, you will be able to know what transactions have and have not gone through.
Aside from that, there is also the benefit of avoiding any backlog when it comes to data entry. If this were still done manually, there is the risk of missing out or forgetting to log in transactions, which would pose another problem.
Easy Access to Your Records
Easy and convenient access is another advantage that comes with digital bookkeeping. As digital bookkeepers make use of digital platforms, you do not need to wait to have a physical copy. Instead, you can take a look at your records from the convenience of your phone or computer any time you wish.
Streamlines Your Auditing Process
Aside from having easy access to your data, digital bookkeeping also helps streamline your audits. With the help of the digital platform, you will be able to go through your records with more ease.
For example, some platforms have a search function that allows you to find a particular credit or debit within seconds. This cuts down on so much time if you were to do it manually, saving you time and effort.
Tax Compliance Made Easy with Digital Bookkeeping
When you decide to take your bookkeeping digital, you also allow your business to benefit in several key ways. Some of these include the following:
- Calculation Accuracy – With the help of a digital platform, there is an assurance that your data entries are accurate as the process is automated. This helps minimize any errors as well, giving you the correct numbers and ensuring they are what they should be.
- Efficiency – Digital bookkeeping relegates all bookkeeping-related processes to the platform and those in charge of it. As a result, there is less of an administrative burden when it comes to looking after tax-related concerns.
- Guaranteed Compliance – With accurate calculations and a more streamlined bookkeeping process, you can be assured that any compliance-related concerns are taken care of completely.
- Good Business Reputation – When your business is compliant to its tax related concerns, this helps boost its reputation. This will let your investors know that the money is going where it should be and, as a consequence, encourage them to keep investing.
However, not all are capable of making this move as it requires developing a platform, finding the manpower to do all the work, and the training needed to become familiar with the entire digital process. Fortunately, there is still a way to do this without great difficulty.
Partner With Trusted Third-Party Bookkeepers
Human error is one of the biggest contributing factors to why manual bookkeeping is inefficient and ineffective in terms of tax compliance. However, the advent of digital bookkeeping has gotten rid of the errors that come with the bookkeeping manually. Fortunately, making the transition from manual to digital bookkeeping is much easier now as there are several ways to go about this.
Third-party bookkeepers, such Manila Bookkeepers, can perform all the functions of an in-house bookkeeper. We can adapt to your business needs as soon as you tell us what you need.
With our help, we can provide you with the following services and functions:
- Qualified accountants that know the ins and outs of bookkeeping
- The digital platform that will do all your business bookkeeping functions
- Data appraisal to help you understand the debit and credit trends of your business
- Carry out necessary audits to help review your business’ finances
- Help your business stay tax compliant as they are always updated on the latest tax regulations
Our team can handle the bookkeeping concerns your business has, especially because we understand how important this is for organizations. This leaves you with more time to focus on all the other aspects of your operations. By working together, we can help ensure that business growth becomes a reality.
So, if you want to get the best helping hand for all your digital bookkeeping needs, look up Manila Bookkeepers and contact us today. We’ll help you get your business finances sorted out and tax compliant in no time, all while realizing the growth you want for it!
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