QuickBooks And Xero’s Involvement In Finance Management

What Is Financial Management?

It is a business function concerned with profitability, credits, expenses, and cash. Financial management generally focuses on short-term capital investment, current assets and liabilities, foreign currency and fluctuations, and product cycles. It also covers the day-to-day management of funds, long-term strategic financial management, capital raising, capital structure management, capital budgeting, and dividend policy.

Managerial finance and corporate finance are two areas that directly overlap financial management, managerial finance is concerned with the organizational application of economic techniques, and corporate finance is concerned with long-term capital budgeting, and is more relevant to large corporations.

Purpose Of Financial Management

Financial management is the analysis and investment of the finances of a business to make long-term and short-term decisions. A few goals of financial management are discussed here –

Company survival – one of the most important aspects of the survival of a company is its financial management, a strong finance helps companies in protecting themselves from bankruptcy, and stay in existence.

Wealth maximization – a company's significant wealth maximization is possible with a successful investment plan, after fulfilling its profit motive, a company’s next goal is maximizing its stakeholder's wealth.

Cash flow maintenance – being a short-term objective, it keeps the money for daily expenses, including buying raw materials to produce goods, salary payments, and other utilities. Keeping enough cash for daily expenses is important to maintain the company’s credit rate and reputation.

Profit maximization – one of the main objectives of financial management is reaching a position where marginal cost equals marginal revenue.

Capital structure determination – with the help of capital structure it is easy to determine how a business finances its operations and growth. A financial manager can control the right mix of debt and equity.

Functions Performed By Financial Managers

A few daily functions performed by financial managers are as follows

• Monitoring both fixed and current sides of the balance sheet.
• Estimating sales and cost.
• Keeping a check on investments such as shares and bonds.
• Maintaining accurate financial reports for the company’s management team.
• Planning taxes in approximation before the due date, so the company doesn’t pay extra.
• Establishing financial control.
• Making capital decisions.

Importance Of Financial Management

There are various important reasons why financial management is required –

Financial management helps the organization with financial planning, financial management assists the organization in acquiring funds, with proper financial planning received or acquired funds can be allocated optimally, and, hence, can be effectively utilized, making crucial financial decisions is easier with pre-planned financial year this increases the overall profitability and overall value of the firm, providing economic stability.

What Is QuickBooks?

QuickBooks is an accounting software, it was initially released in 1992 by Intuit. It is mainly geared towards small and medium-sized businesses, it offers a cloud-based version and an on-premises application that accepts payments, payroll functions and manages and pays bills. QuickBooks has several integrated features such as remote access capabilities, outsourcing, electronic payment functions, remote payroll assistance, online banking and reconciliation, and various integrated features of Google like maps, marketing options, and email functionality through Microsoft Outlook and Outlook Express. There is also an online service available under the name QuickBooks Online, mostly used as an online accounting platform with six lakhs+ subscribers, the users are supposed to pay a monthly subscription fee to access the software through a secure login web browser. QuickBooks Online is available on web browsers such as Chrome, Internet Explorer 10, Firefox, Safari 6.1, and Android web apps.

QuickBooks is best known as Bookkeeping software, it also provides a range of accounting services for small businesses, a few of them are –

QuickBooks Online, QuickBooks Payroll, QuickBooks Commerce, QuickBooks Time, QuickBooks Payments, and, QuickBooks Live.

QuickBooks’s Point Of Sale

Using QuickBooks point of sale a user can track their inventory, customer information, and sales, and, replace a retailer cash register. QuickBooks is a software that provides reports for managing business and serving customers. However, Intuit discontinued its Point-of-sale services as the software was built on a unique platform that requires complex maintenance which makes it difficult for its developers to introduce new features, while the software is still available for its end users there will be no security and functionality updates.

QuickBooks Software Options

Bills and expenses tracking, invoicing, online payments, employee time and expense tracking, and payrolls.

QuickBooks benefits the business in various ways, with software like customer relationship management. However, there are a few other ways in which QuickBooks helps boost business performance such as straightforward inventory management, financial statements available at fingertips, and easy taxation.

What Is Xero?

Xero is an accounting software used by small businesses, accountants, and bookkeepers. Xero provides various features such as –

Accepts Payments – it can accept payments via debit cards, credit cards, or direct debit. It saves payment chasing time and boosts on-time payments.

Online Invoicing – Xero's intuitive software efficiently manages invoices.

Bank Connections – with Xero one can access data from 21000+ institutions globally.

Integrate Apps – apps, integrations, and financial service offerings that connect to Xero can be chosen to run the business better.

Claim expenses – with Xero’s expense tool users can reimburse or submit expense claims and manage spending.

Bank reconciliation – with Xero’s bank reconciliation software it is easy to record current finances ensuring accurate finance records.

Payroll - pay runs for a few of employees can be done using Xero, maintaining basic pay records online, and running payroll reports.

Pay bills – Xero provides a clear overview of accounts payable and cash flows, and, tracks and pays bills on time.

Track projects – Xero provides a job-tracking tool used for project planning, quoting, budgeting, and invoicing. Track costs and record time.

Online file storage – Xero provides online file-storing services that manage and share contracts, bills, documents, and, bills and receipts safely.

Accounting dashboard – it is easy to track bank balances, invoices, bills, and more using Xero’s accounting dashboard.

Analytics – check financial health and track metrics, see future cash flows.

Sales tax – xero automatically calculates sales tax on transactions, and uses reports for preparing sales tax returns.