How much cash do we have on hand? New opportunities arise on a daily basis, but not every company has the liquidity to capitalize on them. Accessing an up-to-date cash balance when this information is needed may require spending time assembling reports, reconciling accounts and updating ledgers. Once the cash balance is calculated, arranging for fund transfers may again take time. As the pace of business continues to increase, the future of finance will need to include advanced methods of payment transmission, financial reporting, and information retrieval on a real-time basis. Fortunately, with new technology, those methods have already begun to emerge.
The increased speed of financial transactions
Thanks to online credit and payment systems, financial transactions which just a few years ago may have taken weeks or months can now be completed in much shorter time frames. According to Tech Crunch, 18 countries have real-time payments available now, with another 18 or more countries underway. Finding ways to complete transactions and provide financial data on a real-time basis allows small companies to gain a competitive edge and more quickly access customers and financing.
The advantages of faster financial reporting
Real-time financial statements are becoming a reality, and small companies must find ways to quickly access information to help make crucial financial decisions. Data accumulation and entry is one task that may slow down processes like expense reporting and analysis. With cloud accounting systems, linked iPad® apps allow expenses to be scanned and entered into the system on the go. No need to bring everything back into the office to upload to the system, just sync the device to the cloud wherever Wi-Fi is available and accounts are updated. This allows management to look at total expenses at almost any point in time and obtain an accurate picture of financial performance. On the sales side, customer receivables also flow as soon as invoices are generated by the cloud accounting system.
Ask a question, get an answer
Maybe a small business owner doesn't need their complete financial statements at all times. But each day questions arise about their business, and accounting systems must be able to provide answers. Whether it's how many customers have been billed this month, or how year-over-year expenses compare, reports should provide accurate, up to date information. Managers don't want to contact customers about unpaid bills only to find out the checks have already been received, but the A/R report wasn't up to date. To keep business moving and successful, real-time information is becoming an imperative. With cloud accounting, accounts are updated as soon as data is entered, and quick results appear right on the screen.
What about the initial question of how much cash is on hand? With cloud accounting, this question can be answered at virtually any time. The system maintains an up-to-date profit and loss system based on expenses and sales. Combined with a starting cash balance, cash inflows and outflows are tracked and an accurate balance is almost always available. With the advanced capabilities of a cloud accounting system, the future of finance is right here, right now.