In this article we have talked about main types of accounting software as well as the benefits of integrating such systems. Let’s dive deeper and talk about particular software that we suggest to use.
- By 2026, the global accounting software market size is expected to reach $ 117 million.
- According to Statista, the percentage of small business owners using accounting software is 64.4%
- 56% of accountants say that accounting technology has increased their productivity, reports Sage.
- According to Medium, almost 75% of jobs in the accounting business can be automated using accounting software.
About important things
Accounting software has become an essential part of any business. As it allows business owners to track financial transactions and instantly generate various financial reports.
Before learning about the importance of accounting software for businesses, you need to first understand what accounting management is.
What is accounting management?
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.
What is accounting software?
Accounting software is a software, that accounting professionals use to process financial transactions like accounts receivable and payable, invoicing, tax compliance, general ledger, cash flow analysis, trial balance, income and expense statements, balance sheets, payroll among others.
Types of accounting software
There are many types of accounting software available on the market that you can choose from. Some of them are:
- Enterprise Resource Planning (ERP) System: Commonly used by large corporations, this type of accounting software can bring your business functions together and merge them into a centralized platform for easier viewing. However, compared to other types of accounting software, this comes at a steep price and requires a long period of time to install.
- Commercial Accounting Software: The most common type of software available, ready-to-use commercial accounting programs are easy to manage. Like other applications, they can be personalized to adapt to the requirements of your bookkeeping process. So far, it is generally the most affordable option available.
- Custom Accounting Software: All businesses have unique needs. This is why companies sometimes opt to have accounting software created just for them. By going for this option, they can tailor the program according to the requirements of their operations. However, this can be more demanding to maintain compared to its commercially available counterparts.
Benefits of implementing accounting software
To accounting professionals, accounting software are company’s valuable asset that significantly helps improve the efficiency of the finance department. Apart from that, there are still more important benefits that this software provides.
Optimized business operations
Why waste your energy on bookkeeping when you can use it to run your business? With accounting software, you can work smarter, not harder. Speed up your processing time by eliminating manual calculations from your daily to do list. This helps you keep your books up-to-date without cluttering up your desk. Additionally, you can optimize your operations because you no longer have to run numbers on different applications—you can view everything on a single screen.
The most important advantage is that accounting software saves a lot of time over manual bookkeeping. For instance, you can write checks, create bank deposits, and prepare customer invoices in the solution, and the software will record all the transactions.
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.
Improving decision making
Without an automated accounting solution, you will have difficulty understanding your business financial condition. It provides you with numbers that can help you figure out where to cut expenses or where to invest more. With a clear overview of your current financial state, you will be able to develop smarter strategies and allocate resources more easily.
Improving financial data security
Financial data is company’s most confidential information and, so it must not fall into the wrong hands. An accounting system ensures your financial data remains safe by storing it in a centralized system that is protected by firewalls. Thus, only those who are granted access rights can see the data.
What accounting software should you start with?
The purpose of accounting software is to simplify back-office responsibilities. By finding the right program, you can store, access, and process all the data you need to run your business with just a few clicks and taps. Whether you want to combine several components of your accounting tasks into one program or find specialized applications for particular facets of your business, there are options for you. Here are the 5 best top accounting software options to choose from for your business.
It is an excellent option to start looking into, especially for small businesses as it’s fast, easy to use, and secure. This cloud-based software effectively eliminates paperwork and helps you create professional-looking invoices while being extremely easy to use as its interface is simple and intuitive. You can easily try it out and see all key features in action with a great free trial offered by the vendor. You can sign up for FreshBooks free trial here.
Xero is easy to use for everyone, even those without prior accounting knowledge. It achieves this feat by simplifying complicated financial concepts through flexible templates, providing a comprehensive summary of your entire financial operations, and streamlining your workflows. Due to its cloud-based nature alongside a secure two-factor authentication for approvals, users can from around the world can work on accounting tasks at the same time with minimal risk of financial fraud. A Xero mobile app also allows you to easily manage your business on the go.
QuickBooks is a great choice if looking for optimal management of your small business’ accounting data. This includes payable bills, accounting notes, and other standard tools for accounting operations. Other standout features include blazingly fast payments by connecting invoice to credit cards or bank accounts, clear and automated reporting with the capability for creating and running custom reports, and much more.
As a cloud-based software, Wave allows you to access data from anywhere, add unlimited collaborators and work on all of businesses from a single login. It also offers the ability to track both personal and business finances in one place, rather than going to one app for personal and another for business.
Book Keeper is hybrid accounting software that can handle all accounting-related tasks, whether you’re online or offline. With its hybrid nature, Book Keeper automatically syncs offline data to the online database regardless of your platform of choice, ensuring parity with the latest information on your entire accounting processes at all times, be it inventory management, financial reports, and taxation, among others. This comprehensive accounting software also comes equipped with warehousing and POS software functionalities, making it an ideal application for those in the manufacturing or retailing business.
Benefits of integrating accounting software with inventory management
These two entirely different components of your business can be incorporated for better management that gives your business a competitive edge, while minimizing risk, saving money and automating the processes. Let’s take a look at benefits of integrating your inventory management and accounting software.
- Reduce labour expenses
A significant part of businesses expenditure is spent on labour costs. When integrating inventory management and accounting software the chances of unnecessary labour intensive manual feeding of components that relate to each other are reduced – saving time and money.
- Accurate financial reports
Integrating your inventory software with your accounting system ensures that every sales order, purchase order, or business activity gets captured in your accounting system. This removes the risk of human error, inaccuracies from delayed information, and more, resulting in better overall integrity of your company’s financial reports.
- Prevention of stock-outs and waste with inventory optimization
Integrating your accounting and inventory software can help you streamline the data collection process and achieve inventory optimization. Your business will have real-time visibility and accurate data on its operations, which allows you to gather valuable insights like sales forecast and cash flow reports. With these insights, your business can plan for the right amount of inventory and avoid stock-outs and waste.
In order to maximize the benefits of your accounting and inventory management software integration, it needs to be real-time, easy-to-use, flexible and scalable. Here at Elmasys, we have the perfect solution for you.
To find out if Elmasys is a good fit for your business, click here for a demo.