Let’s delve into the benefits of digital accounting for arts and creative businesses. These benefits extend far beyond simply using a piece of software rather than doing your accounts on the back of an envelope or a spreadsheet.
Arts and creative business owners who come to us for help with their numbers often aren’t very familiar with the range of tech now available to simplify bookkeeping and accounting processes. They just don’t realise how much time and stress they can save by moving to digital accounting. The benefits of digital accounting include:
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Save time
You might think that recording your financial transactions on a spreadsheet keeps things simple. However, in the long run, the benefits of digital accounting outweigh the downsides. Yes, you’ll have to spend time learning how to use new software, but that’s a one-time activity. Overall, bringing your bookkeeping online will free up more capacity to provide your core services and products to your clients. This is especially true for creative business owners with many receipts and significant volumes of payment transactions each month.
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Reduce errors
We all make mistakes with admin from time to time – we’re only human. Problems with your bookkeeping can lead to expensive penalties and fines if you don’t get your taxes correct. Using software tools such as Xero means you can avoid coding errors, problems with bank reconciliations and other mistakes which can cost you time, stress and money.
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Real-time financial insights
One of the best benefits of digital accounting is the easy, 24/7 access to your business numbers, wherever you are. You can log onto your cloud accounting software to view and run a range of reports so you’ll have your latest financial data at your fingertips. Whether you need to know how much cash is in your bank account, whether a client has paid you on time or how much stock of a particular product you have left, it’s all available and up to date right within your smartphone. One of the most common problems small businesses, especially creative ones face is cash flow issues. When income is variable month to month, you can run into trouble quickly. Avoid this by regularly using cash flow forecasting software. Plan, track and reach your goals more easily with digital accounting tools.
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Simplified expense tracking
Do you know how much you are spending on different types of marketing? Are you clear where your income is coming from and which clients are the most profitable ones?
Xero and other similar tools make it simple to categorise your costs. This gives you visibility of where your money is being spent. It helps you see where you need to make savings. Set budgets for each expense category, track actuals against those budgets and re-forecast. Be in control of your business finances. In creative industries, where income and spending patterns can be erratic, the benefits of digital accounting help you stay on track and grow your business.
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Dedicated time for creativity
It’s rare to hear creative business owners saying they enjoy finance admin, bookkeeping and managing their numbers. For many creatives, the last thing they want to spend time on is paperwork. Invoicing, dealing with receipts and worrying about coding expenses correctly can suck the joy out of business. You’d much rather be behind your camera, rehearsing your latest production, producing new artistic pieces and so on. We get that – our job is to look after your tax accounting.
Of course, we can also handle all your bookkeeping for you if you wish. However, the benefits of digital accounting mean it’s much simpler if you do want to handle the day-to-day transaction processing yourself. Why not consider setting up recurring invoices for clients you work with each month? Use Xero to automatically chase up overdue payments from clients and how about receipt capture software so you can easily keep track of all your paperwork in the cloud? By automating many of these tasks through digital accounting, creative professionals can free up more time to focus on core work. Your business grows and you get to spend more time doing what you really love.
Exploiting the benefits of digital accounting
At Numbers Know How, we encourage our creative clients to keep things as simple as they can. Xero is a good choice for many small to medium businesses to get all the above benefits of digital accounting without having to spend a fortune every month. The list of tools and apps which can be linked to Xero to streamline your business processes is extensive. Here are a few of the commonly used ones:
- Dext: Capture and manage receipts and invoices.
- Expensify: Manage business expenses and travel reimbursements.
- Shopify: Manage your online store and keep your accounting data in sync with Xero.
- WooCommerce: Manage your WordPress online store and keep your accounting data in sync with Xero.
- Cin7 Inventory Management: Track inventory, manage stock levels, and streamline order fulfilment.
- SumUp POS: Accept payments in person and keep your accounting data in sync with Xero.
- ClickUp/Asana/Monday.com: Manage projects, track time, and collaborate with your team.
- HubSpot/Salesforce/Capsule CRM: Manage your contacts, deals, and marketing campaigns.
- Stripe: Accept payments online and keep your accounting data in sync with Xero.
- Mailchimp: Manage your email marketing campaigns.
- Microsoft Outlook: Connect your Xero account to your Outlook calendar.
- Google Contacts: Sync your Xero contacts with your Google Contacts.
Whatever your tech stack, the chances are high that you can integrate with Xero. If you’re looking for help to improve your workflows and get a better handle on your business numbers, check out our blog about online accounting with Xero . Sign up for your FREE trial to Numbers Knowhow, the revolutionary cashflow software designed to empower you with the numbers you need to transform your business. With Numbers Knowhow, you’ll have access to powerful tools and features that will unlock a world of financial understanding and growth.