Accounting is the process of summarizing, reporting and analyzing the business transactions to keep track of its expenses and income. Accounting software lets organizations assess its assets, liabilities, cash flow, transactions, sales, purchase, balance sheet, cost management, reports and analysis. Accounting software helps managers to understand accounts in a better way and develop strategic plans for the benefit of the organization. Every person related to the business regardless of its type and size manage accounts to see profit and cost.
Many business owners are aware of the importance of using accounting software. And then you have those who are stuck in the past, using a “pen and paper” system because that is what they have become familiar with over the years.
While there is no rule saying you have to use accounting software, once you make the change you may look back and wonder what took you so long.
The computerized accounting software is very helpful and provides major advantages to your business.
If you are still on the fence, read on to learn about the main benefits of using accounting software.
#1 Saving Time
When you select a quality accounting software system it can really help you save a lot of time compared to manual bookkeeping.
The package can simultaneously process front end documents as well as back-end transactions.
For instance, you can write checks, create bank deposits, and prepare customer invoices in the solution, and the software will record all the transactions.
#2 Continuous Financial Monitoring
In manual accounting, most of the work is done at the end of the financial year when the records are prepared for administration and tax assessment purposes.
But with computerized bookkeeping, you can create and maintain financial records continuously and get in-depth reports any time you wish.
This enables company management to continuously monitor the financial records of the business and resolve issues early before they balloon into big problems.
#3 Management of Cash Flow
With accounting software, you can record and track your payables and receivables. This enables you to know your current as well as future cash flow status.
For example, you can enter your bills as well customer invoices, and their due dates, and get insightful reports that will tell you if your receivables are enough to pay your future bills.
Plus, you can keep records of invoices and bills which can help you to avoid late fees and overdraft charges.
#4 Banking integration & reconciliation
The software lets you integrate the Bank accounts of the business and you can reconcile the fetched transactions with the ones that you recorded in the software. This way it saves time for reporting the balance sheet for the final return filings.
#5 Minimizes Mistakes
Manual accounting increases the chances of errors in calculation. You can avoid this by opting for accounting software which automatically performs all calculations accurately.
This is a big benefit especially if you need to prepare detailed invoices in which specific items or worked hours are billed at various rates.
Simply pick the items for invoicing, enter the required data, and the system will do rest for you.
#6 Scalable Solutions
Leading accounting software systems offer advanced features such as scalable databases and sophisticated customization. Expanding startups and small businesses can opt for these solutions to meet their growing needs and demands.
Companies that are expanding in other countries, using home-based employees, and have clients in diverse locations can use cloud-based accounting solutions that can be accessed anytime, anywhere, on any internet-connected device.
#7 Computerized Invoicing
With accounting software that focuses on invoicing, you can get up-to-date reports on customer payments. The reports can provide you with details on which customers owe you and the amount to be paid.
This can help you to manage and control your finances effectively. You can ask the late-paying customers to speed up payments and thereby minimize losses.
Thus, the accounting software can provide you with reliable information on payables and help to boost profits.
#8 Neat and Tidy Organization
Manual invoices can easily be misplaced or lost. On the other hand, an accounting package stores all the data and information securely in a single location.
You can review, reprint, and resend invoices if needed. Plus, you can easily search the software for invoices with invoice numbers, names, and amounts.
The process is easy and fast as the system neatly organizes all the entered data.
#9 Tracks Inventory
According to recent accounting software trends, many quality solutions can now track product inventory and provide up-to-date details on the amount of stock in hand.
They can automatically track inventory even as product orders are processed. On top of that, they can forecast when you are likely to run out of stock so that you can order more items in advance.
Thus, this inventory tracking feature can provide accurate data and help to save time too.
#10 Actionable Reports
Accounting systems can provide detailed reports on your business processes and help you track the money flow in your organization. You can get a clear picture of your costs and revenue at any time.
This can help you to calculate your profits more easily and learn which customers generate the most revenue for your company. Leading accounting solutions provide in-depth actionable reports whose range depends only on the type of information you enter in them.
In short, these reports can help you make smart decisions, and operate your business more efficiently and productively.
With accounting software, you are forced to keep your data entry current and up to date. This can help you keep close track of your company’s finances all the time.
As a result, you can quickly learn about a customer who has credit problems and not making payments on time and similar issues that create a gap in cash flow.
Thus, using accounting software is a much better alternative to simply storing manual invoices and receipts in a file for later dealing at the end of the financial year.
#12 Advantage of Mobility
Leading accounting software vendors provide mobile apps for Android and iOS devices that enable you to carry your books with you.
These apps can be used for a range of productive tasks such as sending invoices, viewing invoice information as well as expenses, attaching receipts to immediately record expenses, tracking billable time, importing new client details directly from the contact information stored in your phone, and more.
Accounting products help you to centralize key business processes and tasks such as customer relationship management, payroll, invoicing, inventory management and more.
You can use one package for all these tasks instead of investing in separate software solutions for each process.
Thus, a full-featured accounting package can help you save a lot of time and money as well as make your business processes more streamlined and efficient.
#14 Eases Tax(GST) Compliance
Accounting platforms can calculate the tax(GST) amount that needs to be paid on each invoice.
Plus, you can get detailed reports on the amount of tax(GST) your company has paid during a given time period. Thus, you can get all the information you need to prepare and file tax(GST) forms stipulated by the government.
Advanced systems even allow you to e-file tax(GST) returns from within the product.
#15 Short Learning Curve
Small business owners usually don’t have the time to learn to use new software.
Fortunately, with most leading accounting software systems, the learning curve is short and easy. So, even lay users can learn to use the system effectively. This can help to minimize reconciliation issues and accounting errors.
Most leading vendors provide adequate training and customer support to help small businesses make effective use of their software.
We hope this article on the numerous benefits of using accounting software has convinced you to get rid of manual bookkeeping and invest in a good quality package.
If you are already using an accounting software solution, feel free to share with us the advantages it offers for your individual practice or company.