In the fast-paced startup world, agility is everything.
While larger, more established companies may have the luxury of making mistakes, small businesses and startups need to make quick, smart decisions to achieve the lean growth required for success.
To make well-informed decisions, you need accurate, up-to-the-moment information—that's where real-time bookkeeping and accounting comes in.
What Is Real-Time Bookkeeping?
Real time bookkeeping hinges on two technological advancements: artificial intelligence (AI) and cloud computing.
Utilized properly, AI can allow your business to automate the recording of transactions, automatically entering them as soon as they occur, rather than days or weeks later.
Cloud computing allows you to store your company's books on a remote server accessible via the internet rather than a hard drive in your office.
Combining these two technologies with real-time bookkeeping, you'll be able to view your financial information anytime, from anywhere, and it will always be up to date with the latest transactions.
What Is Real-Time Accounting?
While the words bookkeeping and accounting are often used interchangeably—and bookkeepers and accountants do sometimes perform the same tasks—the two are not the same.
Bookkeeping is concerned with recording transactions and gathering the financial information necessary to run your business. With real time bookkeeping software utilizing cloud computing and AI, much of the work that a human bookkeeper would traditionally do, such as generating an income statement, balance sheets, or sales reports, can now be automated.
Accounting, on the other hand, is concerned with reviewing and analyzing the financial statements a bookkeeper generates to check for errors and gain actionable insights from the information. Since these goals are more subjective, many business accounting needs require human expertise.
With all that in mind, real-time accounting usually refers to human experts reviewing the books generated by real time bookkeeping software on a daily basis. Though it's not literally real-time accounting software in the same sense as real-time bookkeeping, real time accounting means you'll have a professional accountant reviewing your books and providing customer support on a daily—rather than monthly or even less frequent—basis.
Advantages Of Real-Time Bookkeeping
The advantages of online accounting software that provide real time bookkeeping over traditional, after-the-fact bookkeeping are numerous, but here are five of the most important:
- It's convenient—Storing your bookkeeping data in the cloud allows you, your bookkeepers and accountants, and even authorized employees to access key financial data anytime, anywhere.
- It's affordable—Automating tedious and repetitive tasks like data entry, expense management, and invoicing customers drastically reduces the amount of human labor involved in bookkeeping, making the process less costly. For small business owners and startups, saving on these costs can be crucial.
- It's accurate—Automation also drastically reduces the potential for human error on those same tedious and repetitive tasks and creates an audit trail so the source of an error is easy to locate.
- It's customizable—With real time bookkeeping software, you can connect your bank accounts and set up your books to accurately reflect the way your business really works, rather than relying on an outside firm for payroll services and tax preparation that doesn't understand your industry.
- It's current—With real time bookkeeping, there is no waiting for month end to compile data, and you'll never be scrambling to run reports you need to make decisions, present to potential investors, or submit your tax returns on time. Accounting tasks that might normally be left until the end of a financial period can be done at the click of a button throughout the month, giving businesses better cash flow management.
Real-Time Bookkeeping And Accounting For Startups
Zeni is a full-service finance operations platform built around its cutting-edge real-time bookkeeping software. The Zeni Dashboard gives customers 24/7 access to highly accurate, real-time financial reporting and insights all on a single platform at no additional charge.
Alongside our real-time finance KPI dashboard our experienced finance team of accountants, tax advisors, CPAs, and fractional CFOs gives startups the finance management services and peace of mind they need to succeed.