The word accounting refers to the process of dealing with the financial system of a business. A financial system includes transaction history, auditing and interpreting all sorts of financial reports. People used to manage all these things manually. But accounting software has reduced the system loss that used to come with the maintenance of papers. Everyone is considering the importance of accounting software in business now.
Let us know in brief what is accounting software. Accounting solution does everything that accounting used to do in business but in a digital way. In simple words, accounting software evaluates and takes care of the financial status of a business. This software supervises:
- Your Accounts: Taking care of accounts is the principal task of accounting software. It takes care of accounts payable and receivables, helps you in dealing with banks, shows you all the expenditures, revenues, liabilities, and assets on a specified time frame.
- Invoices and bills: Bills and invoices are another major financial part of a business. Accounting software helps you provide invoices to customers and prepares the bill for them.
- Tracking sales: With invoices and bills, the system tracks the total sale.
- Payroll Management: Accounting software manages employees too. It takes care of their salary, wages, bonus, and every financial compensation.
- Inventory Management: Inventory management is very essential for business. With applying this solution the condition of stock management gets even better.
- Reporting tax: Besides making overall reports on finances it takes care of tax management.
- Helping in Budget: It analyzes the documents in hand and compares it with previous ones and helps in the making new budget.
Importance of Accounting Software in Business
Accounting software is like the shelter house for small business. If you take a moment you will understand by yourself the importance of accounting software in your business. Think of those who are entrepreneurs and not major in BBA. And an entrepreneur with tight budget, of course, won’t be able to appoint an expert for that. Accounting Software is the lifesaver then.
According to a research, ran over 3000 companies in 2017 who were looking for accounting software revealed a statistic. Among them 37% were new buyers.
To be more precise let us break into pieces to you, how accounting software is so important in business.
Why Accounting Software Became So Important
Accounting apps have become like assistants in business by conducting simple programs in complicated areas. Let’s find out why it became so important.
Saves Your Time
Time is the most important thing in business especially when you just started your journey. When you handled bookkeeping manually it took a lot of your valuable time. On the other hand, using accounting software has simplified the overall system. This simplification saves the time you need to invest in other sectors.
Accelerate Working Speed
When you have less paperwork to do, you get space for other works. Such as, your transaction history is recorded. Now you don’t have to sit down to calculate the total sell. You will get the result automatically.
Perfection in Work
It is quite normal to you make mistakes in calculation. Your mind always doesn’t work in the same spirit. The problem is one small mistake in the financial calculation can be devastating for your business. But automation in this process brings perfection in work as there is no chance of making such mistake.
You need your invoices, transaction history, details of your stock etc. which are parts of your total business report.
It can be exhausting to sit down with papers and make the reports. Accounting system gets those reports ready for you on its own.
Taking Care of Tax Easily
Only businessmen know how crucial the matter of tax is when you run a business. If you are not clear with taxes you can go down anytime. And for taxes, you need details of financial documents. We already know accounting software automates reports for you. These ready-made reports help you get on with taxing complexity.
Accounting software reduces th cost that comes with appointing an expert. After that, it reduces cost that
Again, Accounting software starts at a very low cost. It goes higher with the facilities it offers to you. But you can start from ground level and upgrade with the progress in business.
Securing Your Data
Securing your data is a real task. The existence of your business can be on stake if your documents fall into wrong hands. Software lock your data into your device and very few people have access to the information. So, accounting software is the best for securing your data.
Types of Accounting Software
There are different types of solutions according to users’s requirements. Requirements depend on the stature of their business, ease of use, the location of business etc. There is industry based accounting software too. According to Founder’s Guide, 3 types of Accounting software that can be considered as major classification.
- Database Accounting: This is dedicated to the great names in the market. These are of course costly as they are for large business enterprises.
Accounting tools are mostly used by small and medium business owners. There are two types of software for them.
- Installed Accounting Software: These are SME (small and medium enterprises) dedicated software.
- Cloud-based Software: Cloud-based software is trend these days. They are also for small and medium business people.
Advantages of Using Accounting Software
According to a report, Malaysia’s 97% business is either small or medium enterprise business. And most of them use business accounting system.
Increase in accounting solution user proves that there must be certain advantages to draw people toward the system. We already discussed why should we use this in business.
Now let’s see what happens when you use the system-
- Boosts the productivity: It saves time, creates reports in a short time, brings perfection into work and overall boosts productivity of a company.
- Makes suggestions for you: Accounting tool with all the recorded financial documents make suggestions for you and helps while setting up
- Forecasting: Using accounting software not only helps you in making a budget but also it can give you a forecast of upcoming incidents.
- Keeping up to Date: You can supervise your data easily with the system. This keeps you updated about little details of your business
. TrackingPathway to Progress: All these help you to track the way you are moving and help to create a path to progress easily.
Troubles That May Come with the System
Implementing a new system can always be a little troublesome. Same goes for the accounting system. No matter how easier software makes your life by saving you from all those papers, it will take a little time to cope up with that.
SME’ targeted accounting software is usually minimalistic in design. So they don’t need technical support. But there is a team that works to solve a problem.
The most amazing thing is you can use accounting software in WordPress if your business is on WordPress. In WordPress, it comes in form of a plugin. Check the article Manage Your Expenses Using WordPress Accounting Plugin to know about WordPress accounting plugin.
The popularity of accounting software is on the rise. It appeals to people when they think of getting rid of thick paper books. Still, a new system tends to confuse people easily. This is why it is important to discuss the benefits people are likely to enjoy with the system and how it can be of great importance in business or what problems they may face.
We have tried to cover all the areas here. If you yet have confusions or other insights, you can share with us in the comment box.