Enterprise and large corporations employ in-house departments to handle their accounting, financial, and tax tasks. Mid-size companies and start-ups often outsource their finance tasks for efficiency purposes. For small businesses and sole proprietorships, it’s possible to employ technology to help manage finances. Keep in mind that technology helps all companies and individuals manage financial duties.
Here we explore seven ways you can use technology to help manage your finances.
To remain financially solvent, it’s important to receive more money than you payout. The simplest way to manage finances is to create a budget. Then adhere to it. Financial challenges are inevitable. With a budget, you can weather financial ups and downs with confidence.
Finance-focused technology requires an initial setup. Once you’ve programmed your preferences, sync your financial accounts with the software. Syncing cuts down the data entry and prevents errors. Then you’re ready to start creating your budget.
Getting paid is an important aspect of providing services or selling goods. Most professionals and companies receive payment after they send their clients an invoice. Technology helps you automate the invoice creation process. Ideally, it encourages clients to send payment promptly.
Industry payment schedules vary. Some expect 30 days. Others receive 60 days. Sole proprietors and freelancers often require payment as soon as they turn in their work to the client.
Regardless of company size, it’s a good idea to set payment terms when establishing a new business relationship. If you expect to receive payment promptly, mark your invoices with “Upon Receipt.” You’ll find more information about this term of payment type here.
Since you expect prompt payment, your suppliers and other business partners expect their payment promptly too. Technology helps you manage your finances and payments due.
There’s no shortage of impressive finance technology features. Most banks offer digital bill pay along with their online banking services. Finance software provides a similar option. The technology allows you to schedule automatic payments to your lenders, credit card companies, and suppliers.
The healthcare industry shows us that there’s no shortage of data. Data is a great tool that offers valuable insights. The catch is that you must decipher it first.
Financial technology includes functions that allow you to compile reports. These reports help you audit your income streams and payments. If there are any double payments, missing payments, or overpayments, this is your opportunity to catch them.
If you take a deep dive into the data, you can analyze trends and forecast demand. When you’re confident that demand will pick up during specific months, it’s possible to purchase supplies in bulk at a discount beforehand.
You may find that some of your income streams aren’t optimized, while others require some restructuring.
Organize Finances for Tax Season
Finance reports compiled with technology facilitate an analysis of the data; they also help you prepare for tax season.
Tax season brings anxiety to several individuals and business owners. Your returns must be free of errors and missing information. Otherwise, the return might trigger an audit. If you’re audited, you’re expected to present all your finance documentation in an orderly fashion.
It’s much easier to organize your tax information in finance software than by placing your receipts, invoices, and bank statements in boxes or a filing cabinet.
Automate Tedious Tasks
There’s a lot of data entry tied to finance. Once you sync finance technology with your financial accounts, the software automates tedious tasks. In addition to compiling reports, you can program the tech to create invoices, pay your bills, and keep track of expenses.
Plus, it reduces the size of your company’s accounting department, especially if you’re a small business.
Set Up Reminders
Finance technology also features a reminder function. For example, if you want to double-check all payments before they’re sent, set up a reminder for the day before. It’s wise to place your seal of approval on all checks to ensure that the amounts are correct.
Technology is a helpful tool, but it still requires oversight.
Technology offers several benefits. It helps you shop online; it also helps you manage your finances. Since finance tech continues to evolve, there are several options available on the market at an array of prices. There are even online versions that offer a free trial with no strings attached.