Keeping accounting records and filing tax returns can be one of the most tedious, time-consuming, and costly business process for micro, small and medium size business and self-employed (MSME) in the Philippines.
Aside from it, if you do your accounting and tax returns manually, it is more prone to error which may lead to stressful and costly audit of the Bureau of Internal Revenue (BIR).
Fortunately, over the years, as internet access and technology has been widely available, keeping accounting records and filing tax returns has been easier, less time consuming and less costly for MSMEs with availability of cloud-based accounting software like MPM Accounting Software.
In this article, I will share some of the benefits of shifting your manual record keeping and tax return filing to automated cloud-based method to save you time and cost to focus more on operating and growing your business.
1. Accessible Anytime, Anywhere
One of the disadvantages of manual record keeping and tax filing is lack of mobility. Usually, you need to do the process in a specific location, like the office.
But if you use a cloud-based accounting software like MPM Accounting Software, you have now the mobility to do your record keeping and tax filing anywhere, even if you are at home or traveling. Provided you are connected on the internet, you can do your record keeping and tax filing anytime and anywhere.
2. Real-Time Data
In manual record keeping and tax filing, the process normally takes time, sometimes days to complete the data or report. Normally, you need to manually record first all the transaction then wait for the end of the period before you can generate report such as financial statement or tax form. With such long lead time, there are times the data or report you may be looking at is already obsolete or outdated.
But if you use a cloud-based accounting software like MPM Accounting Software, waiting or lead time is shortened. In fact, as soon as you input the transaction, the system automatically updates and able to generate reports such as financial statement and tax form. And as you keep recording, these reports will also be automatically updated. You don’t need to wait for period end to be able to view your data. As such, you feel more confident with the report you’re looking at because it is showing you real-time data or report that is still not obsolete or outdated.
3. Saves You Money
In manual accounting and tax filing, you may need to spend a lot of money from hiring and employing several personnel to do the process, as well as spend for their training, rent an office space where the employee can work, and then cost of the equipment and furniture they will use to be able to do the job well. Aside from that, you also need to spend in managing and checking their work. On the other, you may spend on hiring professional accountant which can be also costly.
But if you use cloud-based accounting software like MPM Accounting Software, you can save money in hiring several personnel or hiring a professional accountant to do the data entry work. Instead, you can do it yourself or hire only one personnel to do the data entry work. You may also retain your professional accountant, but instead of including data entry work in their service, they can focus on review or audit. This will save you more money instead of hiring several people or outsourcing the record keeping work to professional accountant who are usually charging based on hours work.
4. Automation of Multiple Steps
In manual accounting and tax filing, you need to do each step from start to finish such as recording the transaction in the journal, summarizing all journals in the general ledger, preparing financial reports, preparing tax forms, preparing tax schedules, etc. Doing each step manually can take a whole month to complete. Aside from multiple steps that can take a month to complete, manually doing your accounting and tax has higher chance of errors due to multiple manual steps.
But if you use cloud-based accounting software like MPM Accounting Software, it can be just a single step of encoding the details of the transaction and the rest of the steps are automated. The recording of journal entry in the journal is automated, the financial reports such as general ledger, trial balance, balance sheet and income statement are automated, the monthly, quarterly, yearly tax forms are automated, the required attachments or schedules such as Summary List of Sales and Purchases (SLSPI), Quarterly Alphalist of Payees (QAP), Summary Alphalist of Withholding Tax at Source (SAWT), Alphalist of Payees and so on are automated, the certificate of tax such as 2307 or 2306 are also automated, and so on. Aside from that, it is less prone to error as the process is automated.
With automation, a multiple step is usually done by several personnel and can take a month to complete is done in a single step or lesser step with lesser personnel and reports are done real-time, thus saves you money.
5. Online Support and Knowledgebase
With manual accounting and tax filing, you need to send your personnel to trainings to upgrade their skills and knowledge to constantly changing rules or laws, especially Philippine tax laws. Or you may need to pay an expensive consultant or professional to know what to do.
But with cloud-based accounting software like MPM Accounting Software, you can rely on the software to be updated with the latest rules or laws and in case you have questions, there is an online support that can answer your questions. At the same time, the software has available knowledgebase which serve as manual or guide on how to use the system.
6. Continuity of Process
In manual accounting and tax filing, it is normally reliant on the personnel or the professional who do the work. As such, when the personnel decide to resign or the professional decides to terminate their service, it can be difficult to transition the multiple step process which in turn creates a bit of stress in the MSME’s business process and operation especially if the manual records are missing or misplaced.
But with cloud-based accounting software like MPM Accounting Software, you can easily transition from one personnel to another since the process is mostly automated. And the need for thorough technical training of the process will also be eliminated, if not lessened. Also, your records are intact in the software server and can be easily retrieved anytime.
7. Collaboration
In manual accounting and tax filing, normally each step or process is only done and accessed by one person. Which sometimes makes it difficult to retrieve data especially if the personnel are out of the office or have resigned. The process is heavily dependent on the personnel to do his or her job properly or on time.
But with cloud-based accounting software like MPM Accounting Software, you can assign multiple users of your subscription up to 3 users for free. Each user can access, view, record or modify the data in the software for collaborative effort. As such, as business owner or self-employed, you don’t need to wait for your personnel or professional accountant to send you the report. Instead, you can easily view the report or records by simply logging in to the software. You can also see those users that record or modify your data since the software has audit trail report on any actions made in the software.
8. Ease of Use
In manual record keeping and tax filing, you need to learn the basic rules of accounting and taxation in the Philippines to properly do the process. Which mean you need to understand what a journal entry is, ledger, debit/credit, chart of account, trial balance, percentage tax, value added tax, withholding tax, income tax, etc.
But with cloud-based accounting software like MPM Accounting Software, you can go away learning accounting and tax terms or rules, instead just enter or encode the detail of the transaction in the system. And if you are unsure of what to do, you can create a helpdesk ticket or read the knowledgebase to help you in using the system. This makes record keeping and tax filing easier for non-accountants such as MSME business owner or self-employed who wants to save money by doing it themselves.
There are many more benefit of using cloud-based accounting software like MPM Accounting Software which I will reserve for discussion in future articles. But I hope with some of the benefits I’ve shared in this article, you have gained an idea of what it can be like should you shift to cloud-based accounting software in doing your recordkeeping and tax filing. Although it won’t be a complete stress-free solution, at a minimum it will lessen the stress of tedious steps in your process, saves you time and money.
Should you decide to shift your manual record keeping and tax filing to cloud-based accounting software, you may consider trying and subscribing to MPM Accounting Software for 30 days free trial. Subscribe here: www.mpm.ph/tax
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