In today’s digital age, keeping track of accounts the conventional way can slow down businesses. From creating invoices and financial statements to making new journal entries, the list and the paperwork are endless.
Accounting software eliminates such time-consuming activities, offers real-time financial data, and improves overall financial management efficiency. This leaves businesses with time to focus on growing and generating increased ROI.
This blog will act as a guide to accounting software and explore the numerous benefits and advantages of using accounting software.
A brief introduction to accounting software
Accounting software is a digital tool that automates financial processes, streamlines bookkeeping tasks, and provides accurate and real-time financial data. Cloud-based and online accounting software offers advantages such as accessibility, data backup, and improved collaboration. Online accounting software also helps generate invoices, financial reporting and bank account reconciliation.
Accounting software is vital to enterprise resource planning (ERP) systems. Accounting, financial planning and analysis (FP&A), supply chain management, inventory management, and procurement are all integrated into ERP systems. Accounting software within an ERP provides a unified user interface for efficient data management and ensures seamless financial data sharing across all modules.
Advantages of using accounting software
Accounting software has revolutionised finance management for modern businesses and has become vital to their daily functioning. Here are some benefits that businesses reap when using accounting software:
- Real-time financial data access: One of the most significant advantages of accounting software is the ability to view financial data from any location at any time. Cloud accounting software, commonly called online accounting software, enables you to access your data from any device with an active internet connection. This feature provides flexibility and allows accounting professionals and business owners to make more informed decisions faster.
- Improved efficiency and time savings: Accounting software automates repetitive and manual activities, decreasing the time and effort necessary for data entry, invoice production, transaction tracking, and other tasks. Accounting software streamlines these processes, freeing up important time for accountants and bookkeepers to focus on more strategic financial duties.
- Improved cooperation: By offering real-time access to accounting and financial data, cloud accounting software fosters seamless communication among team members. The days of manually distributing spreadsheets or USB discs to keep everyone up to date on the newest financial figures are long gone. Team members can now log on to the platform and access the most up-to-date information, allowing for enhanced collaboration and decision-making.
- Data security and backup: Accounting software provides better data security than older techniques. To protect sensitive financial information, cloud accounting software saves data on secure servers and applies encryption techniques making it hard for data stealers to access it. Regular data backups are also conducted automatically, lowering the chance of data loss or corruption.
- Invoicing and financial management simplified: Many accounting software systems provide features that facilitate invoicing and financial management operations, making them easier. Invoice templates and automated payment reminders aid in payment collection, assuring on-time payments and boosting cash flow. Users can use the software to generate and send professional invoices, bypassing the need for manual paperwork and printing.
- Simplified tax compliance: Dealing with taxes is strenuous for business owners. Advanced accounting software has inbuilt tax rules making it seamless. Firms can keep accurate accounting records, updated financial statements, and reports with accounting software. Hence, gathering and compiling the necessary paperwork for filing taxes becomes easy.
- Real-time reporting: The top advantages of using accounting software are real-time tracking and reporting. By integrating accounting software with business accounts, businesses can track expenses, inventory, and sales in real-time. Accounting software offers dedicated dashboards allowing users to check all accounts and metrics in one place. Bank reconciliation can be done in a few steps, minus the waiting period.
Accounting software features to look out for
Before selecting accounting software, take a look at the features an ideal software should have:
- Simple and intuitive user interface
- Inventory control and tracking
- Simplified bank reconciliation
- Automated tax calculation and compliance
- Easy accessibility to data from anywhere, anytime
- Automatic invoicing
- Preset invoice templates easing invoice generation
- Multi-currency support
- Track dropship orders
- Integration of bank accounts for easy tracking of expenses, journal entry creation etc.
- Ability to create and manage invoices directly from the accounting software without requiring to print bills
- Schedule automatic vendor payments
- And more
It is important to remember that each business’s specific needs may vary depending on its operating sector, its size and other factors. So it is essential to evaluate different accounting software options to find the one that aligns with your company's requirements and goals.
Conclusion
Accounting software is a powerful tool revolutionising financial management for businesses regardless of size and sector. It streamlines the bookkeeping process, enhances efficiency, and promotes informed decision-making by automating activities, delivering real-time insights, and providing various features. Accounting software, whether cloud-based or linked to an ERP system, has become a critical asset for organisations, assisting them in remaining organised, compliant, and financially sound.
Imarticus and IIM Lucknow’s Global Senior Leadership Programme is a pioneer of global strategies dedicated to building future C-Suite Executives. Candidates get firsthand practical experience working with accounting software, cutting-edge projects and real-world case studies.
