In 2016, Prada, one of the world’s fashion industry giants, seemed to be going through difficult financial times. Experts had predicted some decline in profits. Indeed, the fashion powerhouse’s revenue fell sharply (about 25%) within the first six months of that year.
The story gets more interesting; soon after, headlines were filled with news of how Prada saved the day or, rather, how the accounting department did it. Their stocks went up 12%, and profits surpassed analyst’s predictions by 11%. The company’s accounting department had made a few adjustments to their policy, and that was all the difference they needed!
This story goes to show just how important financial management is to the fashion industry. It also proves that you’d rather focus on the bigger picture while leaving the smaller, repetitive processes to automation. You bet the headlines would have gone different if all those accountants did was manual bookkeeping, filling invoices, and all the other accounting processes that are now fully/ partially automated. We recommend you click the link to find out the best paystub online generator that you can use for your business.
Why You Need Financial Software
As a fashion business, big or small, you have to perform transaction matching, spreadsheet reconciliation, and other workflow tasks. The big problem is that human beings are prone to error. Yet one simple mistake could impact the end balance big time and you have to consider things like independent contractor taxes as well.
Machines, however, are almost incapable of making errors. You know, except for mistakes made in the coding, which is often rare with trusted software vendors. Automating your bookkeeping will lead to perfection on many levels.
Improved Speed of Completion
Other than issues with accuracy, manually capturing your records of inventory, sales, prices, and sales tax is a time killer. On the other hand, computers, with the help of accounting software, can process numbers much faster than any human.
Additionally, a financial software application helps increase efficiency. For instance, the software could be configured to calculate the sales tax for each entry automatically and in seconds as opposed to having an employee do it longhand.
The efficiencies and speed of financial software go hand-in-hand with a drop in costs. Computers also enable your Accountants to do more within a shorter time, which means you won’t need to have as many people on your payroll.
Not forgetting, accounting software often come at a low starting price, only going higher with more features. This allows you to start small and upgrade as your business grows.
Automation of Business Reports
Let’s say you need to attend a meeting in two hours and must have accurate financial reports with you. Doing it manually might get time-consuming and result in so many errors because of attempts to finish quickly.
Accounting software, on the flip side, will help provide concerned staff members with accurate financial information at lightning speed. Accounting software like QuickBooks Desktop Hosting makes bookkeeping even more easier due to its multi-user features when hosted on Windows Virtual Desktop. Most financial applications come with built-in reporting features that allow for the automatic generation of reports by simply clicking on a button or completing a few fields in a form.
Filing of Taxes
The process of filing taxes is often complex and frustrating, especially when done manually. Accounting software can take the load off your shoulders in many ways. For one, it will ensure that all your financial details are organized and easy to access. Additionally, you could find an ERP that’s capable of integrating with tax return software, allowing you to almost fully automate the filing of your returns.
Things could get sour real fast if your information lands into the wrong hands. But no worries – software can protect your data by only giving access to the approved personnel. On the contrary, books are bulky, and feeding data to spreadsheets manually gives so many people access to information they don’t have clearance for.
Tips for Choosing a Financial Software for Your Fashion Business
Consider Your Needs and Level of Familiarity with Accounting Concepts
The first step when buying anything for your business is always to define your goals and needs. How much money do you handle a year? Also, what’s the nature of your business – manufacturing or supply?
There are general products that go anywhere, and there is software designed specifically for retailers or wholesalers and so on. Remember, the application you choose will have a direct impact on the way your revenue is handled.
Moreover, you have to consider how much knowledge you have as far as accounting goes. The last thing you want is a software that can’t keep up with you or a situation where you spend hours on your keyboard trying to understand your newly acquired software.
Fortunately, most vendors pride in providing straightforward applications that avoid too many jargons. Either way, you want the financial software to use terms that you are familiar with. If you have accountants working for you, they, too, have to be confident in the software.
Have a Budget in Mind
The budget always tops the list of factors under consideration when buying software for your business. Expect to pay more when you are operating on a large scale or where you have to work with lots of specialized features. Luckily, there is always something for every budget.
Pay Attention to the Possibility of Integration
Software that integrates smoothly with the rest of your business intelligence tools and other suites that you may need in the future should always earn more points in your checklist. For instance, it may not feature built-in invoicing but integrates with an invoicing app.
Consider the add-on features it supports as well. They are always very handy at times. For instance, you may want to purchase an add-on that will let you access the application remotely or receive payments online. This will allow you to work with a strict budget while leaving room for improvement.
Involve Your Accountant
If you have an accountant, they may prefer you to go for software that will integrate with the one they use. Moreover, your accountant is the most suitable employee to provide an educated opinion on the matter.
Does the vendor provide phone, email, or live chat services? Do they provide “how-to” guides for their software? How about their presence on social media? You’ll need solid support, especially when you don’t have much knowledge in accounting.
You might want a mobile application to go with the software. It could come in handy when you need to monitor your accounts anytime, anywhere. You can search in Google Play Store or iTunes to see whether the company has developed a mobile app for its financial accounting software.
The software company can make all sorts of promises but don’t forget to listen to what their users have to say. They’ll disclose whether the vendor is reliable, as well as the challenges you should expect – like poor customer service or bugs in the software.
Customer reviews will also reveal how fast the company responds to issues and if they roll updates often or not.
If your financial software also offers transaction services or an online banking system, being able to receive payments in multiple currencies would be a plus. In this case, it must also be able to take care of exchange rates conveniently. For instance, your convenience might demand that you view the transactions in your preferred base currency on your end.
Take Your Time
Finally, take your time to compare products with the help of the tips you’ve learned. There’ll be so many exciting offers that you have to investigate deeply before settling. This may be a long-term investment. You may even end up designing some of your business processes, so you have to be sure that it won’t let you down.
Going for a financial software is a sound decision. It could save you a lot of hassle and time. Then, you get to focus on other important tasks that cannot be automated. Just be sure to take the time to investigate several software providers before you sign up for anything. Good luck with your business!
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