Whenever a transaction is made, the financial condition of an organization immediately changes. So it becomes imperative for you to sort them (transactions) out and record them in order to generate meaningful financial statements. Like all other transaction accounts, expenses also need to be categorized and recorded according to their distinctive types. As WordPress veterans, we highly recommend you use automated software in order to manage your small business expenses. Why is that? One of the most noteworthy reasons is that it is capable of performing accounting related operations at a reduced cost eliminating all the possible human errors that often arise from manual efforts.
There are a plethora of advantages that you will enjoy when you manage the expenses with an automated Accounting solution. In this article, we will not only discuss those benefits but also open your eyes to choose a competitive WordPress Accounting plugin that could seamlessly manage small business expenses without any manual intervention.
Reasons an expense management software is essential
Know Where The Money Should Be Spent
As you have the opportunity to keep track of your expenses, it would be easier for you to figure out where the money should be spent more and where should be spent less. You can easily prioritize the expense accounts in order to optimize small business expenditures.
Little Usage of Papers
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There is no need of physical papers for transaction processing if you are using a WordPress Accounting plugin. In fact, stationery costs are often neglected, but research shows that stationary costs can cost a huge amount.
Eliminating the Need for a Professional Accountant
A professional Accounting management software itself can carry out all types of accounting related tasks. The only thing that you need to do is to input data and you are through! You will instantly get Journal, Ledger, Trial Balance, Income statement, and Balance Sheet for an input of a transaction.
Electronic Payment Processing
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You can enable electronic payment for out-of-pocket expenses to a user’s preferred bank account or credit card. For example, when you order for any inventories, you can pay with savings/current account or even with petty cash for payment in cash.
Getting the Expenses in the Financial Reports Instantly
Handmade things usually require less time when they are made in the machine. When you enter any expense transaction, it immediately passes through Journal → Ledger → Trial Balance → Final Accounts / Financial Statements within a blink of an eye.
Accuracy of The Accounting Process
The first and foremost requirement of any enterprise is the accuracy of managing transactions. Traditional pen and paper method for accounting may contain human errors because everything is written and calculated by humans. On the other hand, a piece of Accounting software takes the responsibility to do on its own. Everything is maintained and performed by the machine and so there is no chance of errors at all.
Avoiding Frauds and Double Charges
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If you have full control over the expenses of your Enterprise, you will be able to identify frauds as well as items for which you are unnecessarily paying multiple times. Hence, expense management software will play a vital role to pull in the reigns of your enterprise’s extra expenses and frauds.
How will WP ERP Manage Your Enterprise’s Expenses?
WP ERP, the pioneer all-in-one ERP for WordPress, lets you accomplish all the above with its FREE interface. And with its easy-to-understand Accounting module, you don’t have to be a finance manager or tech expert. WP ERP is made to make even amateurs and beginners conduct Accounting and Finance-related transactions like a piece of cake. It’s that user intuitive!
There are a number of expense transactions that are usually carried out on a day to day transactions in an enterprise. For your better understanding, we will divide the accounts into two categories:
- Basic Expenses
- Regular Expenses
1. Basic Expenses Management
It includes expenses for the purchase of goods that you are going to stock. The Accounting module has an Expenses feature that will provide you an option for managing expenses such as (i) Vendor Credit (ii) Payment Voucher (iii) Vouchers for Vendors Credit.
Navigate to WP Admin → Accounting → Expenses. You will see two options for the purchase of inventories: one is Payment Voucher and the other is Vendor Credit.
If you want to credit the vendor or simply if you want to buy on credit then you will have to use this option. As a precondition, you must create vendors to credit them. Login to WP Admin → Accounting → Vendor and hit the Add New button to create a vendor.
After creating the vendor you can credit them very easily. Now login to WP Admin → Accounting → Expenses → Vendor Credit. You will see the following screen:
Fill out those fields and submit for approval. After that, an autogenerated invoice will be shown to you.
This option is useful when you want to purchase inventories in cash. You can use this option to bypass a purchase on credit. Go to WP Admin → Accounting → Expenses and select Payment Voucher. Then you will see the following form:
You just need to fill out those fields and hit the Pay button to pay. Next, an autogenerated payment voucher will be shown to you. You can even print the voucher.
The Expenses feature of Accounting module is also capable of receiving installment payments. To know about installment payment, you can see this tutorial.
2. Regular Expenses Management
These are the expenses that are generally incurred to operate a business as a whole or a segment of a business. Don’t get panic! You don’t have to do anything with your hands. There is a chart of Accounts for these expenses in the Accounting module of WP ERP. Usually, an enterprise does not require any accounts outside of this chart. However, our developers didn’t compromise to add customizable options for accounts to the chart. It means you can add any extra account to the chart.
Navigate to WP Admin → Accounting → Chart of Accounts. Scroll down to see the expense accounts:
The system accounts come integrated with the Accounting module. You can not edit or delete them.
Creating a new Expense Account
To create a new Expense Account, navigate to WP Admin → Accounting → Chart of Accounts → Add New.
Next, you will see the following options to create a new expense account.
Suppose, we select Expense from the drop-down menu and add this account up to the chart.
After adding the Tutorial Account you will be able to see it on the list of expense accounts. Here is a screenshot:
WP ERP ships with an advanced Accounting module that incorporates all the essential features for processing any expense account. Not only does it help you manage all the expenses but also allow you to create new expense accounts which is the most exclusive feature of the plugin.
Bid adieu (Say Goodbye!) to traditional paperwork and embrace the plugin in order to make your enterprise more cost-efficient and productive.