Often confused, both budgeting and accounting are processes that involve the planning, allocating, and distribution of financial resources.
Both budgeting and accounting are fiscal systems or processes that involve the planning, allocating, and disbursing of monetary resources. This means that there’s a need for coordination between these two practices, paving the way for various integrations to flood the market in an effort to help simplify your company's financial processes.
What's the difference between budgeting and accounting?
Simply put, budgeting is mostly about predicting the future financial consequences of business decisions, whereas accounting deals with recording, summarising, analysing, interpreting, and reporting on financial transactions. One deals with future financials, the other deals with historic data.
With budgeting, a business can get answers to questions like where its income comes from, what it’ll need to expend, if the business is viable, etc. When it comes to accounting, a business can get answers to where it spent its money, if it made a profit, what sales were made, etc.
We should note that there are different types of budgeting when it comes to business, and each type plays a key role in the growth of your company.
Reasons to invest in accounting software for your business
If you haven't invested in accounting software for your business yet, there's no better time than the present. Not only are bookkeeping and accounting essential parts of running a business effectively, but modern software makes it easier than ever to move away from the more traditional methods used to execute these activities.
While there are many reasons you should be using an accounting software for your business, here are a few to get you on the right track.
With accounting software, you can, among others:
- Improve accuracy
- Ensure better security
- Automate repetitive and redundant tasks
- Generate detailed reports
- Automate record-keeping
- Simplify inventory tracking
- Centralise all functions
- Simplify auditing
- Deliver scalable solutions
If you're not already a Crunch user, Crunch is everything you need in one place. We have a variety of features available with our subscription plans to support your business growth, as well as an integration with financial planning software, Brixx, to help you better manage and plan for your finances.
Reasons to implement budgeting and forecasting software for your business
By investing in budgeting and forecasting technology for your business, you’re better able to plan for your company's future. In comparison to the traditional spreadsheet method of forecasting, software such as Brixx, enables businesses to rapidly test ideas and understand the ramifications of your actions before you put them into play.
While not limited to the below, here are a few reasons why your company should be using budgeting and forecasting software:
- Increased accuracy
- Saving valuable time and resources
- The use of trusted and proven processes
- Rapid and enhanced financial scenario planning
- Alternative budgeting models
- Faster approvals and authorisation of plans
- Flexible reporting
- Clear efficiency savings
Tools like Brixx enable businesses to gain perspective on overall, as well as granular, financial health by providing real-time and accurate information to drive better financial decisions.
6 reasons to integrate your budgeting and accounting software
Integrations are a convenient way to optimise your budgeting and planning process as a centralised platform allows you to gain a better overview of your financial position and use those insights to make informed business decisions.
Among other reasons, by integrating your budgeting and accounting software, your business can:
1. Reduce the margin for error
When using multiple systems to keep track of payments, invoicing, time allocations, orders, budgets, and more, there’s a greater chance of error due to overcomplication and lack of system communication. Even the simplest of tasks are made laborious when having to be repeated across different systems. By limiting the number of times that your employees need to enter data on your systems, you reduce the chance for incorrect capture and more.
2. Collect and track payments with ease
Using multiple systems to manage projects, finances, etc, makes it more strenuous to handle things. By integrating your software you can save yourself from having to ask needless questions while keeping better track of what's going on. For example, an all-in-one system that can generate your invoices, capture payments, send receipts, and update your overall business budgets and financials can help you keep better track of clients and vendors without letting things fall through the cracks.
3. Easily and effectively capture expenditure
Recovering project expenses is one thing, but capturing business expenses is another. Integrating your software helps keep accurate records of these so you can manage them more effectively, from the micro to the macro level.
4. Recover more reimbursable expenses
Project expenses add up quickly and the need to track, record and invoice for them is essential to maintaining a healthy bottom line. An integrated network of systems can help you stay organized and better manage your reimbursable expenses while seeing how they're reflected in your accounting statements.
5. Manage cash flow more effectively
Any business needs to ensure there’s more money coming in than going out if it's to be successful. By integrating your systems you can more easily create cash flow reports that provide insight into your financial standing. This can help you manage cash availability more effectively by getting a quick view of cash in, cash out, revenue invoiced, revenue owing, and future net cash flow.
6. Generate accurate reports
With an effective integration you can easily see, for example, which projects or clients have been the most profitable, which products have the better sales rate and profitability, and so much more. By having your systems communicate with each other, your reports will be more accurate, giving you a better idea of how you can better manage and grow your business.
Apart from the above, if you’re successfully able to leverage this type of integration, you’ll be able to able to:
- Operate from a single source of truth
- Maximise your finance team's abilities
- Create and facilitate discussions and strategy
- Adopt a detailed budget to model planning
- Collaborate effectively
- Provide visibility across key data and reports
However your company chooses to tackle its planning and accounting practices in these modern times, there are specialised tools that exist that can make your life easier. As the UK's most cost-effective online accounting service, with an award-winning customer service team and Chartered Certified Accountants, we encourage you to take a look at Crunch's free accounting software and subscription plans.