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As the name itself implies, an accounting software is a type of application that performs basic accountant functions digitally.
It is essentially a digital rendition of the accounting book as basic features such as the journal, general ledger, payroll and trial balance are included.
The roster of accounting software available is truly vast and includes versions that may be developed by organizations using them themselves or bought from a third party developer.
Some sections of accounting software in use are open-source third party products with the ability to be modified and tuned to certain specifications by the users.
The market for accounting software was kick-started in the mid-1990s coinciding with the then newly found potential for Windows 95 as a robust operating system for business operations.
Growth was also fueled by the strengthening global trend towards digitization, replacing hard copy accounting books.
BENEFITS OF ACCOUNTING SOFTWARE
The most obvious advantages of accounting software above accounting books are what helped their popularity among businesses to rise dramatically.
Simplicity in data entry, fast processing, automatic reporting and calculation, low error margin due to the computerization of calculation resulting in highly accurate critical information, time saving, and efficient inventory management are all features most useful for businesses and enterprises with a vision to grow.
A digital arrangement for the handling of finances and accounts provides an overall efficiency boost that can help influence the increase of profits.
THE CAVEATS AND KNOWING WHEN TO CHANGE
As with any computer software however, issues may pop up during the course of use.
New methods and tools often work exceedingly well at first but eventually they to stand as more of a drain on your enterprise’s resources rather than working as benefits.
This can happen for a multitude of reasons from user inefficiencies, system wear, and a menagerie of typical negative causes that show themselves over time.
The aim of the article is to give you an idea of when it is appropriate to ditch product itself and move on to a better option.
By the end of it, you should have a well-honed idea of knowing what to do given the situation.
It is time to change your accounting software if it turns out that you’re spending more with the software than you are running your business.
Somewhat self-explanatory, one of the primary goals of accounting software is to save your time and time is a very important investment to make for your business.
Extra time being taken up by your accounting software with its needs for organization and maintenance is time that is being wasted.
Weigh up whether it is more beneficial to dedicate a team to spend time with the software managing it, hiring a professional each month to handle it or to change the software entirely.
Many accounting software come as part of CRM modules such as Odoo’s and the robust integration capabilities saves a good deal of time in data collection. Integration will be elaborated upon later on.
It may also be time to change your accounting software if the one you currently use is no longer being updated.
Lack of updates should be of serious concerns to more and more entrepreneurs because not only does it leave a vital part of an enterprise open to attack by hackers, it can lead to lost functionality as most major operating systems today receive automatic updates.
A new update may not mesh well with the outdated code of your software, leading to the aforementioned lost functionality.
Primarily, keeping your software updated is about protecting both your and your customer’s data. Having a modern, updated accounting system working for your business is a good reminder that all data is safe.
You should change your accounting software if it does not integrate with new apps. This goes well in hand with saving time.
The way forward for increasing efficiency is integration between different modules and apps. Having separate apps for tasks like invoicing or expense management is the surest sign that you have to switch to an accounting software with all these features built-in.
Integration with apps is also necessary for data collection and as stated earlier, time spent behind manual data collection and checking is time that could be spent running your enterprise and making critical decisions.
Remember, good accounting software should work with you and not force you to do things its way, a ‘my way or the highway’ approach immediately makes for poor accounting software.
These days, automation is a normal part of doing business. Automation brings to you the undebatable benefit of a low error margin as automatic processes will never make a mistake as long as your data is alright.
This is not the case for doing the process manually, critical mistakes may be made. A well automated accounting software will work with the data itself from invoicing, bank reconciliation, payroll, and expense management. This also ties in saving time as the automation takes care of the data while you can focus on running your business.
CONCLUSION
In computer technology, nothing is stagnant. New methods, new devices, new software, and new hardware will constantly come along to lay to rest the obsolete and no longer efficient.
It pays an entrepreneur well to be aware of the next good chance to increase the business’ efficiency and earning potential.
A business that is left with obsolete software will rack up inefficiencies to the point of a serious deadlock in growing potential. It is up to you as an entrepreneur to make the right decisions that drive your business forward and lead it to good growth.
Syncoria is a digital transformation services company and a recognized Odoo Ready partner based in Canada.