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How can accounting software help my business?

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Welink Accountants

Accounting Software

The use of accounting software can save a business time and money by streamlining certain tasks and adding a new level of efficiency to the company.

Summary: 

 

  1. What do you mean by accounting software?
  2. Why use accounting software?
  3. How do I choose the best accounting software?
  4. Conclusion

1. What do you mean by accounting software?

 

Accounting software is computer software used by accounting professionals and business owners in order to process accounting transactions, manage accounts and analyse financial data. While some larger firms and businesses may have their own in-house solutions, there is an already large and growing number of third party solutions available on the market. Many of these solutions are available at a low cost but there are also many bespoke services that can be tailored to your business.

 

Although accounting software is designed with different businesses in mind, the common denominator is that the software is online and accessible to users on their office computers, laptops or mobile devices. This type of accounting is also known as cloud accounting as all the financial data processed is stored via a cloud online. Accounting software can be used to perform a range of different services, some of which can be automated to streamline tasks along with the data stored allowing for in-depth analysis of your business. 

 

What types of accounting software are available?

 

The first step when deciding whether to adopt accounting software for your business is to look at what functions the software provides and whether they will improve your processes. Some of the main features included by accounting software are:

 

  • Bookkeeping and General Ledger - The records of all incomings and outgoings of a business
  • Payroll - All of a company’s payments in relation to employees
  • Invoicing and Billing -  Producing and recording of all payments to be made by customers of a business
  • Financial Reporting - Generation of financial reports and statements such as cash flow forecasts, income statements and balance sheets

 

While these are basic functions of most accounting software, many different functions are available depending on the accounting software you choose.

 

2. Why use accounting software?

 

The use of accounting software can add a new level of efficiency to any business. This efficiency can save a business time and money, and also prevent a certain level of human error. Instead of having to write everything down in a ledger or copy and paste information from spreadsheet to spreadsheet, you have all your financial information in one place. Added to that, depending on the accounting software being used, the data stored in the cloud can be used to provide many types of financial reports allowing for a clearer understanding of the financial health of a business. Many of the software on the market also allow for automation of processes such as the payment to vendors which can greatly streamline operations for a business.

 

Although there are many positives to using accounting software, both the advantages and disadvantages must be considered.

 

What are the advantages of accounting software?

 

As already mentioned, the main benefits of accounting software are the increased efficiency for your business and the data available from using the software cannot be underestimated. Having a clear picture of the financial status of your business is immensely important when it comes to making decisions for the future of your business. These advantages come as a culmination of many benefits offered by accounting software:

 

  • Simplify and Speed up Processes - Basic data entry can be sped up and in many cases only have to be done once. This inevitably leads to fewer errors. 
  • Automation of Tasks and Reporting - Tasks such as invoicing and payroll once set up can be automated as required. 
  • Integrations - A common benefit is the ability to integrate into the systems in use by your business, allowing for streamlining tasks and easier access for multiple users in the business,
  • Easy Communication with your Accountant - With all your records and documents organised in one central system, shared access with your accountant can allow for a better workflow and easier communication when necessary. 
  • 24 Hour Access - As with any online software the ability to access your financial records at any time or place provides great flexibility for every business owner.

 

Some of these upgrades can change the landscape of a working day for many business owners, and with the constant updates in technology in the accounting field, more and more advantages can be expected from accounting software. 

 

What are the disadvantages of accounting software?

 

The advantages of using accounting software are in abundance and bring a host of positives to any business, but there can be disadvantages too, and sometimes the most simplistic problems can be the most damaging. 

 

  • Loss of Power or Internet Service - This may seem like a nonissue but a simple power outage or lack of internet service will completely cut you off from your financial information. 
  • Fraud - With the amount of important information stored and recorded on your accounting software, the setup of security for those records is imperative. If security is not installed, your financial records could be open to fraudsters online.
  • Configuration and Scalability - When choosing your accounting software, you must ensure to choose one that is compatible with all the systems you already have in use and also one that will be able to align with the growth of your business so that you do not have to change systems.
  • Cost - Although accounting software is intended to save time and therefore save money, it does present a direct cost to the business. Along with the price of implementing the software, updates and maintenance also have to be accounted for.

3. How do I choose the best accounting software?

 

When evaluating which accounting software to use, much like deciding whether you need a bookkeeper or an accountant, you need to assess which features you need and from there which provides these functions with the best quality and in the most cost-effective way.

 

What is the most commonly used accounting software?

 

Although the amount of accounting software on the market is increasing, sometimes it can be better to look at the more popular companies as they have greater experience in the market and can probably supply the software at a cheaper price. Here we highlight some of the better known and more commonly used software:

 

  • QuickBooks Accounting - One of the biggest players in the market, created in 1998 and has 3 iterations of its product starting with the original desktop version, QuickBooks Online is for complete cloud accounting and QuickBooks Point of Sale aims to replace the use of the regular cash register.
  • Xero Accounting - Started in 2006 and is now available in 180 countries. Users can access the service by paying a monthly fee and gain access to a host of automated services and many options for financial and management reporting.
  • Sage 50 Accounting - A subscription based model that offers integrations with Microsoft 365 and also has a data checker function in order to try and minimise human error.
  • FreshBooks Cloud Accounting - This software is specifically designed for smaller businesses and allows users to access its functions through a mobile application making it easy to use on the go. 

 

As can be seen, there is accounting software for all types of businesses allowing for a great amount of choice for any business owner. While these are the larger players in the market, the choice is endless and a deeper dive into these choices could provide a better solution depending on your requirements. 

Is accounting software expensive?

 

Considering the development in this market, there are many options to choose from meaning that the prices of accounting software are very competitive and accessible for just about all business owners. Of course, when looking at a more tailored or bespoke service, the price will increase but this is up to the business owner to decide what is affordable.

 

Many packages are charged on a yearly or month-by-month basis and then by the number of users required. This will matter as to the setup of a business but again offers further alternatives when deciding which accounting software works best for your business.

4. Conclusion

 

With the number of advantages most businesses will see from adopting accounting software, the choice of which software suits you probably faces the greatest conundrum especially when there is such a large amount of choice available. 

 

One solution that can only be of help is to seek the advice of someone in the know. Considering that if your business is growing enough to take on accounting software, it may also be the case that you will need an accountant in the near future. Speaking with an accountant who has expertise in your industry will be able to recommend the best software for your business. On top of that, were you to use the accountancy firm in the future, you will not have to worry about changing or adopting a new software as you will already be using the software which the account uses. 

 

While this may seem a harder option to research, websites such as Welink Accountants allow you to search for an accountant using such filters as expertise and industry which will match you with your perfect accountant in just a few clicks.  

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