(5 Minute read – home accounting)
This article was originally published here at www.pocketsmith.com
Hi there accounting fans!
Have you ever looked at your personal bank account and wondered:
“Where has all my money gone?”
We work and we work and we earn and we earn. But yet, for some reason, money seems to disappear right out of our pockets. It’s common for many of us to feel like we’re not able to enjoy the fruits of our labour. Fewer of us manage to even hit our savings goals.
So in today’s article, we’ve partnered with Aotearoa-based, Internationally Acclaimed, home accounting software PocketSmith in helping you leverage home accounting software for personal budgeting!
Home accounting software helps you meet your financial goals
If you’re a regular reader of this blog, you’ve probably set up some financial goals of your own. Having a home accounting software setup means that you can keep track of how much money you are putting away towards those savings goals.
More crucially, home accounting software helps you keep track of two VERY important aspects of personal finance which are:
Tracking your Income
Income! This is the money coming into your personal bank account. This can be money you receive from your day job. Drawings or wages that you take out of the business are also considered to be your income. Money that you get from secondhand sales is also your income.
Tracking your Expenses
Expenses are the opposite of income! This is the money going out of your personal bank account. Any money that you spend on rent, groceries, fuel, is money that you spend to keep your family going! Expenses also include larger purchases like a new PC, a new fridge or a new stove.
Keep track of surplus too!
In many ways, running a family is like running a business. However, unlike a business, you’re not looking to make a profit in your family. What you are looking at making is a surplus. A surplus is what happens when you have more Income than Expenses. With a nice surplus, you have money to put away into savings!
Home accounting software simplifies the record keeping process
Ok, so before the advent of accounting software, we’d keep track of our income and expenses in our cash books. Some of us kept receipts to make sure that we could keep track of our spending.
With the advent of spreadsheets, many smart home accountants built their own cash books digitally. My dad still uses an excel sheet to keep track of his funds til today. However, modern accounting software has many advantages over the classic spreadsheet.
Advantage #1: Automated bank feeds
Arguably the most important feature of any home accounting software is bank feeds. Bank feeds are a recent innovation that allows accounting software to get direct bank transaction feeds from your bank — no manual work on your part. PocketSmith has a robust bank feeds system powered by their Data Connections platform, which allows you to connect to bank feeds from up to 49 different countries.
Bank feeds are so great. Before bank feeds I had to manually import statements into accounting software to get my transactions recorded. It WAS A PAIN. What was even worse was having to reconcile my balance in my accounting software with my actual bank account. UGH.
With bank feeds I don’t have to worry about that anymore! Now its just a matter of simply categorising the feeds to the right account as they come in.
Advantage #2: Touch of a button reporting
Remember how I said keeping track of your income and expenses is important? Well, with home accounting software you can turn that data into meaningful insights with automatic reporting features.
With PocketSmith, you can easily generate an income and expense report which shows you how much your household has made over a period of time, or you could make use of the dashboard feature that shows a pie chart that represents your income and expenses over the past month! Whether you’re a numbers or visuals type of person, you can digest your data in a way that works for you.
Advantage #3: Easy budgeting and forecasting
Once upon a time, we budgeted on pieces of paper. And we kept those papers away in safe places, hoping we’d never see them again (and be reminded of how we didn’t stick to it).
With home accounting software, budgeting is so much easier.
Budgeting in Pocketsmith is as simple as setting an amount for a category for a period of time. Once the budget is set up, you can easily monitor how much you’ve spent versus what you’ve budgeted on a real-time basis. This means that there are no surprises at the end of the budget period, and it’s easier to stick to your household budget.
PocketSmith takes this one step further and even does a forecast projection of your future bank balance based on your current spending. Forecasting your finances helps you see whether your wealth is growing and if you have enough money for upcoming or unexpected expenses. When you’re looking towards the future, you can be better prepared for it.
Home Accounting Software gives you peace of mind
With the software doing most of the heavy lifting for you – all you need to worry about is categorising the bank transactions to the right categories.
No need to track down receipts in shoeboxes.
You can put away that error-prone spreadsheet you’ve been using.
No need to compile all your payslips to see how much money you’ve made.
Everything you ever needed to manage your home finances are summarised for you with an awesome home accounting software.
There is still a bit of a learning curve, but fortunately the folks at Pocketsmith have got a great resource page for anyone looking to start using their software.
If you’re keen on bringing order to your household finances and direct your energies towards achieving your financial goals, then investing in a good home accounting software is the best place to start!
Build that financial confidence!
and Stay positive team!