Do you find yourself struggling to keep up with your staffing business? Are you finding it difficult to manage the accounting tasks while trying to meet client demands? If so, then we have some good news for you. You can use a computerised system that will automate much of this work for you – all at an affordable price!
With staffing accounting software, managing finances is made easy. There are many benefits of using it in your staffing business including: increased accuracy, decreased time spent doing accounting tasks, improved customer service levels and more accurate reporting.
The correct use of accounting software can help staffing firms manage finances, clients and more. This provides a lot of benefits to the company. Let’s now dwell into them!
Benefit #1: Manage Cash Flow
One of the most important things that accountants have to do, day in and day out, is track revenue flows into your business. An accounting system can be used to pull together all cash coming into your business from invoices or billable time spent on projects. The accounting system will then show you which cash is available to pay bills with. This also controls how much you spend each month on non-billable items.
In some cases, your client may not pay you for a few months after you have completed the project. If you can’t control how much money is going out on these purchases without the accounting system, it’s very easy to overspend on those items and have no cash reserves at all. A good accounting system will keep track of where your business stands financially on a weekly basis so that you can adjust spending as needed.
Benefit #2: Know Exactly What You Owe
One of the most important things that an accounting software provides is a complete picture of exactly what your company owes each month for expenses, time spent on projects and anything else related to running your business. This keeps you from paying too much in taxes for the year. By keeping good records, you’ll know exactly how much your business owes to the government at tax time.
An accounting system which is connected to an enterprise resource planning (ERP) software can also keep track of what’s coming in and out of your business, even if it doesn’t go through an accountant or bookkeeper first. For example, a staffing agency may have most its cash flow come from recruiters who bill them directly for their time on each project they complete instead of billing that same recruiter’s clients. The company owner will then pay those bills from that account instead of having to go through a third party account manager before paying those bills. This helps prevent fraud and overpaying employees by accident due to an extra step in the process.
Benefit #3: Better Manage Your Inventory
Every staffing company has to manage its inventory properly. This can be one of the trickiest parts about managing a business, but it’s also one of the most important things that your accounting system will help you with. For example, if your outsourcing business or recruiting agency purchases computer parts for use on all projects, you have to keep track of what was purchased so that you have them available when needed. If they are not available, then your IT consultant can’t do their job properly and this could cause problems for both yourself and your clients. The same is true for any other item that needs to be held in stock, including office supplies like pens and paper, or inventory items that are bought specifically for clients to use on projects.
An accounting system will show you exactly what is still in stock and how much of each item is available so that you can order more if needed. It also shows the value of items remaining so that you know when it’s really time to write them off as a loss instead of trying to resell them later on, which could prove difficult if they are obsolete by then.
Benefit #4: Anticipate Tax Season Savings
Taxes can be one of the best things about owning your own business, because you’ll be able to keep more money after your taxes are taken out than if you worked for someone else. A good accounting software will help you to see exactly how much savings come from paying yourself a salary each month instead of getting paid an hourly wage. An accounting system that’s connected to your ERP software will even let you know which checks were made out to pay taxes, so those can be tracked as well. This keeps you from accidentally forgetting to put some form of tax payment on a check and also saves money by not sending too many monthly checks in one envelope or having to write extra ones for the same amount.
Benefit #5: Stay Compliant with Regulations
If you’re running a business that is hiring people remotely, then keeping track of their hours worked each month becomes even more important. The United States Department of Labor (DOL) is not only very strict about how much money your employees are supposed to receive each hour, but they also track the time that their employees spend on projects via computer or phone. This can be difficult unless you have a good accounting system that keeps track of these details for you, because it’s easy to try and keep track of this information in your head or using separate spreadsheets. Not only will an ERP software help with this specific requirement, but it’ll handle all the other tracking requirements as well so you don’t have too many files scattered around your desk instead of being stored securely in one place.
Benefit #6: Be Your Own Accountant
Without an accounting software, you’ll have to hire an accountant at some point. If you’re just starting out on your own as a recruiter or staffing agency business owner, then this can be a hard cost to budget for when there isn’t any money left over at the end of the month. An accounting system that’s connected to your ERP software provides everything that a traditional accountant would provide and more. For example, there are built-in reports with tax information so you don’t have to spend time double checking numerous numbers from different sources before creating your 1099s or other yearly reports at tax time.
Benefit #7: Be More Efficient with Project Management
You’ll be able to keep your projects running smoothly by tracking billing times, work hours logged on specific assignments, and other relevant information via an accounting system that’s connected to your ERP software. If you’re using a project management system for this purpose already, then the two systems will become more cohesive so it’s easier to switch back and forth between them as needed. For example, if there are employees who are clocking in but not getting started right away or taking too long compiling reports at the end of each month, then you can see how much time has been spent doing actual work for clients or tasks assigned through your staffing agency instead of just waiting around.