With so many Financial Management solutions on the market, how do you choose the right system for your business?
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- Independent buying advice
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- Partner background information
- Free callbacks from partners - with no obligation to purchase
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A financial accounts package keeps track of an organisation’s finances by recording and processing transactions within a business. At the centre of such systems there is usually a general ledger, a facility for handling accounts payable and receivable, a payroll module, and a reporting function. Some accounting packages will also offer functions specifically for certain types of organisations or businesses. This introduction to accounting software will explain its main functions, benefits, and what solutions are available.
Accounting Software is vital for a business to fully understand their situation, determine the success of their business performance, and run a successful venture. To get the best out of your accounts purchase, you will need to answer some simple questions. The answers will ensure that you can analyse the available options and select the solution with the best possible fit to your organisations.
What Are The Main Functions of Accounting Software?
- General Ledger - This is an organisation’s main accounting books. They are the records that document the complete financial transactions of a business. A ledger contains the account information needed to prepare financial statements, and includes accounts for assets, liabilities, owners’ equity, revenues and expenses.
- Accounts Payable - This enters bills and pays out money to where it’s owed to creditors, such as suppliers or overheads.
- Accounts Receivable - This enters money received from debtors, such as clients or customers.
- Billing - Billing handles invoices to customers for goods or services.
- Stock - This records a business’s current stock levels to ensure efficient stock is maintained.
- Purchase Order - Accounting Software can create purchase orders, which are commercial documents issued to sellers, indicating types, quantities and agreed prices for products or services.
- Sales Order - You can also create sales orders, which are confirmation documents sent to customers before delivering goods or services. Accounting Software allows you to record orders from customers.
- Bookkeeping - Bookkeeping records the financial affairs of a company.
What Are The Benefits of Accounting Software?
- Speed - Data entry into Accounting Software can be carried out far more quickly than manual processing thanks to its built-in databases of stock customers, supplier details and stock records.
- Cost - Accounting Software reduces time spent by staff doing accounts, and reduce audit expenses as the system safeguards the accuracy of the data.
- Automatic Document Production - Additionally, it allows for fast and accurate invoicing, and fast production of documents, as reports can be drawn directly from software. All documents including invoices, credit notes, purchase orders, printing statements and payroll can be automatically generated, which streamlines the process which was once incredibly time-consuming when executed manually.
- Accuracy - Accounting Software removes the risk of human error, as only one accounting entry is required as opposed to two or three when done manually.
- Up-To-Date Information - The Accounting Software is updated automatically, so account balances such as customer and client accounts are always up-to-date.
- Availability of Information - Information is instantly accessible on work systems, and is available to employees in different locations at the same time.
- Efficiency - Better use can be made of time and resources, and cash flow is improved due to easier debt collections and stock control.
- Security - Accounting Software adds a layer of security to records. Businesses can assign specific areas of accounts and grant them access to those areas only. This protects company data from those who aren’t authorised to view it.
- Reporting - The reporting function provides users an eagle-eye view of the business. Reports are usually customisable in Accounting Software, so reports can easily be produced for specific data sets that an employee wishes to evaluate. Reports on business data are vital when it comes to making important business decisions. The function is good for reporting on tax amounts due and how much is owed to other companies. Again, this improves the financial situation of your business as payments can be made on time and kept up-to-date.
- GST/VAT Return - The automatic creation of figures for the regular GST/VAT returns.
- Legibility - The data contained in and printed from Accounting Software is easier to read than manually, avoiding errors caused by poorly written figures.
What Type of Buyer Are You?
Choosing software is full of compromises. The best accounting software for your project might be too expensive, or might come from an inexperienced company. The challenge is trying to decide what aspects of the product are the most important to you, a goal that should align with improving your company’s productivity and success.
It’s helpful to know when comparing Accounting Software what kind of software buyer you are. Most buyers seem to fall into three main groups:
• Enterprise Resource Planning systems buyers
This kind of buyer requires everything to fall under one system. They require their software to integrate data across every department, side-stepping the problems that come with trying to integrate incongruent systems. Normally these buyers prefer comprehensive ERP software solutions such as Microsoft Dynamics,SAP and Oracle.
• Best-of-breed buyers
This kind of buyer is looking for software for a particular component, such as a Human Resources system or Customer Relationship Management system, as opposed to an integrated ERP suite. They are usually looking for deeper functionality than what most integrated systems offer.
• Small business buyers
Small businesses often look for accounting software because they find that their basic software needs to be upgraded to something with better functionality to keep up with growth. These buyers often require a system that has sector-specific capabilities. It’s becoming more and more common for small businesses to adopt enterprise-level ERP systems to improve their operations. The development of Cloud-based solutions has helped businesses overcome the obstacles of initial expense and technical hassle, but on-premise and client/server options are of course still available for small businesses.