Accounting Software: How Do You Know If Your Company Needs It?
Updated October 6, 2023
Accounting software is used by individuals and businesses alike to track their finances. It doesn’t leave room for error. In the past couple of years, accounting software has changed the way that companies operate. These powerful applications have become commonplace in businesses big and small. Desktop-based accounting software is installed on computers to perform basic tasks. Online accounting software, on the other hand, is hosted on a remote server. It can be accessed over the Internet via a cloud application service provider. Intelligent technology is shaping the future of accounting. Numerous functions will be automated with advanced software systems.
Not every organization is going to benefit from accounting software. Nevertheless, you can’t successfully manage your business without some kind of system in place. Small and new businesses tend to resort to manual accounts or a combination of manual and computerized systems until their needs become more complex. Either way, it’s not easy. If you recognize any of the following signs, perhaps it’s time for an upgrade or an entirely new system.
Signs That You May Need Accounting Software
Your Business Is Growing Quickly
Growth is an important objective for any organization, particularly for a small or new business. When a business outpaces its size and scale, it loses focus on essential functions. Spreadsheets are good when starting out. However, as business operations continue, things can easily get out of hand. The best accounting software streamlines your company’s operations. Not only can you keep on top of the cash flow, but also prepare for the next tax year in advance. Simple tasks, like cash flow projections, become tedious and time-consuming when you have too much on your plate. Accounting software frees up time that you can use to make sure your company remains successful.
You Spend Valuable Time Chasing Invoices
Keeping track of payments and invoices is easy when you use a modern accounting program. You have greater visibility, which translates into operational efficiency and improved supplier relationships. Owing to digitalization, enterprises can handle their inflows and outflows with greater ease. It’s not necessary to flick through files, excel sheets, or contact lists. With accounting software, you can create professional invoices and set up reminders for late fees. In many cases, you can customize the invoice by adding your logo. Rather than typing, printing, and signing, you leverage drop-down menus to create an invoice and email it directly to your customer.
You Require Faster Access to Information
Increasingly large amounts of data are generated in the business. The ability to manage torrents of data is paramount for today’s companies. When you have lots of data, it shouldn’t be in a spreadsheet. Accounting software is better suited to handle and process big data. Decision-making is no longer challenging, as you’re able to evaluate the financial position of your organization quite quickly. Put simply, you’re able to access the information right away. Thanks to advancements in technology, you can derive insights from the data and create strategies for future growth. The reports and dashboards are at your fingertips. If you’re curious to know what your customers’ full profit potential is, the answer is a few clicks away.
You’re Spending Precious Time on Manual, Repetitive Tasks
There are costs to not automating business processes. Using spreadsheets instead of accounting software can cost a fortune. It doesn’t matter how careful you are, you’re bound to make mistakes from time to time. It’s best to avoid such issues, as they can become serious concerns. Automation reduced the error count to almost zero. Manual reporting can be difficult to monitor over time, so you won’t know what assignments to prioritize. Accounting software gives you your time back, so you can do something valuable for your organization. You can focus on creative endeavours and come up with new ideas.
There’s Plenty of Accounting Software Out There to Choose From
You need a program that helps you manage daily accounting tasks and provides insight into your business’s financial health. QuickBooks can serve your company’s needs. It’s available in various tiered editions, for which there are add-ons, such as a cash flow calculator. You can deploy it for invoicing customers, generating reports, paying bills, and preparing taxes, just to name a few. Numerous small to medium-sized businesses use QuickBooks. It’s available as desktop software for Windows, yet you can choose the Mac or online version. If you’re not sure this solution is fit for your business, there’s a 30-day trial option you can leverage.
Needless to say, QuickBooks isn’t the only accounting program available, even though it’s a best-selling one. There are several accounting tools out there, you just have to pick the right one. Take into account your needs and accounting skills when searching for software that can serve the need of your enterprise. You might want to consider a specialized tool, which is designed to help businesses in your niche. For example, there are applications for retailers and restaurants. With cloud computing becoming more prominent in the business landscape, it’s a good idea to look at cloud applications.
Here are some aspects to keep in mind when picking out accounting software:
- Costs. If you don’t want to commit too long to a software solution, a monthly subscription plan is best. However, if you choose an annual subscription plan, you’ll get a significant discount. An on-premise solution like QuickBooks Pro has a higher starting price, but you only make one payment and benefit from payroll management, bill tracking, business performance comparison, etc.
- Usability. How many people will be using the accounting software? Some apps can be set up for multiple users, while others cannot. Get a quote/estimate for unlimited users. It’s worth asking.
- Features. Some of the most desired features of accounting software are financial report management, invoice and transaction management, foreign exchange gain and loss calculations, cash flow forecasting, and asset depreciation management. Decide what you want your accounting software to do.
If your company has an accountant, it would be best to consult with an expert before reaching a decision. They know what type of business you have and what your needs are.