As the world becomes increasingly digital, businesses are moving towards software solutions for their many business operations. Softwares automate, streamline and increase the efficiency and accuracy of these operations. Accounting and financial processes in a business is one example where software has become indispensable.
Accounting softwares are invaluable in any business. Most accounting softwares can be scaled to suit the business’s needs and have available modules and features that can be added or removed depending on the company’s needs. Off the shelf generic accounting softwares or custom accounting software, both offer a range of benefits to businesses.
This article will talk about the ten main advantages to businesses of using accounting softwares for their accounting and financial needs.
1. Saves Time:
Accounting software automates many tasks which saves time for accounting personnel to focus their attention and time on higher value tasks. They automate invoice and payments by sending prompt reminders. Moreover they also fill out the appropriate tax forms automatically when the time comes to file them with the relevant government authority, schedule payments through the bank like accounts payable, wages etc. They speed up the payroll process which usually takes a long time when done manually. This minimizes errors but even if errors do occur, the software promptly highlights the error so it can be corrected in a timely manner.
2. Up-to-date Data:
Time sensitive data is stored up-to-date in the accounting software which can be viewed by the relevant departments when they need it. This allows them to take decisions quickly with regards to projected growth, revenue etc. Moreover, they also make available payment amounts, methods, time and locations for the calculation of revenues and profits which not only aids the account process but also financial tasks like projected growth because the data can easily be compared to other time periods.
Modern accounting software makes it easy to track transactions in all departments of the business thus breaking down siloes, increasing collaboration and removing the chance of errors being carried forward. Moreover, it also helps avoid redundancies and aids in adjusting funding and expenses for all departments in a transparent manner since all the information is visible to everyone in the company. Furthermore, it helps the executive leadership of the business in making accurate, timely and smart decisions since they have access to complete up-to-date data through the accounting software.
4. Data Security:
Accounting softwares have layers of security and encryption to protect data that resides within it. It has authentication security features like two step authentication when providing access. This is vital especially in the case of cloud based accounting softwares since the data is stored in a remote server. It helps protect data in the case of physical theft of devices like mobiles from the business. In the case of natural disasters or accidents like fires, data is still protected and can allow for the continuation of business activities even off site.
Government tax regulations and laws change with changes in the country’s financial situation which is heavily dependent on the businesses operating in that country and the markets they operate in. Manually filling out spreadsheets and making calculations and ensuring compliance with laws and accounting standards (GAAP for example) is a difficult, time consuming and error prone process. Accounting softwares are the perfect solution to changes in regulations and standards and compliance of an organization’s accounting and financial data with them. They automate this process and take much less time than manual work.
6. Smarter Decisions:
Accounting softwares provide real-time and key data like revenue, purchase rates, inventory levels, sales etc. All these key factors provide an insight into the business’s financial health which forms a firm premise for decision making for the leadership. Mere instinct is not enough. With the help of this data and incredible insight that are provided by accounting softwares, business leadership can make better and smarter decisions with regards to the future of the company or even decisions regarding problems or situations in the current status quo.
7. Increased Productivity:
Accounting softwares automate processes which free up accounting personnel from time consuming and mundane tasks. They can instead devote their time to high value tasks like real time data delivery, collaboration etc. Their efforts help other teams develop better business strategies and breaks down siloes to increase more collaboration which in turn positively impacts the health of the business. Moreover, this also leads to better decision making at every level of the business. In other words, accounting software frees up account personnel to be proactive members of the organization which in turn allows for all of the above advantages.
8. Remote Access:
In light of the COVID-19 pandemic, many businesses had to shift to work-from-home models. Cloud based accounting softwares facilitated this transition very smoothly since data was stored on a remote server and the relevant and authorized employees could simply log in to the cloud based software from their devices while at home to keep on conducting their business operations. This allowed the business to keep on operating remotely even during a global emergency such as a pandemic that saw the collapse of economic systems all over the world.
Accounting softwares are easily scalable which is an invaluable feature for businesses since when they grow, their payments, revenue calculations, tax filings etc. all become larger and extremely complex. Off the shelf softwares are scalable for this method with the help of additional plugins and features while custom softwares are scalable in any case since they are tailor made for the business. Similarly, unnecessary features can be removed during downtime or when the business is contracting instead of growing to save up on expenses.
10. Saving Costs:
Cloud based accounting softwares, by virtue of their nature, free up computing space on-site which can be utilized by the IT team of the organization for other pressing uses. Automatic software updates remove license fees and investment in new hardware and installation processes. These benefits are invaluable for businesses that operate in volatile markets. It is also important for small businesses that are just getting off the ground and need cost effective solutions to save up capital for their core activities.