Should accountants use automated accounting software?
By: Gopish Prasad
Tags: Accounting, Accounting Software, Accountant, Data Security, Banking

Reasons why accountants must switch to accounting software

Accounting systems are a type of software that maintains accounting transactions digitally. Many corporations already use automated account software. However, some still prefer to do this the old fashioned way.

What is the difference in traditional accounting and in using accounting software?

Traditional accounting involves humans to manage account transactions in books without using any software. The account must manually record and calculate transactions. They must make sure that the financial records tally and be error-free at the end of the day.

While humans still have to manually input data in the software, using account software is still easier in reporting error-free data. At the end of the day, human error is unavoidable in the traditional style of accounting. Let us understand a few reasons why accountants must switch to accounting software.

1. Enhanced speed

Accounting software processes account transactions and provides results in a short span of time. It takes lesser time to input data to the software than note it down manually. It helps businesses save a lot of time which would have been spent in organizing documents, invoices, purchase orders, etc.

2. High accuracy

Traditional manual accounting is a time-consuming technique that requires accountants to spend a significant amount of time quantitatively verifying figures in a company’s accounting information. Simple errors, such as putting data into the wrong column can lead to substantial inaccuracies. Accounting software has the ability to process more information than human accounts ever can, thus, producing reliable financial reports.

Computerized accounting solutions, due to their effectiveness and ease of use, assist businesses in effective control of inventory and payment collection, saving time and enhancing cash flow. Accountants may be able to spend less time and look for faults and more time analyzing data for decision-making purposes.

3. Accounting is linked with other processes

Accounting can be related to various processes of a business such as banking, sales, purchasing, etc. Transactions need to be recorded properly in all the processes it affects. This way, all the respective ledgers are up to date. This can be tedious in manual accounting. However, in automated accounting software, it only requires a single data entry and everything is updated automatically.

4. Automated reporting

It might take time to locate information from each book and put it into a report using traditional account techniques. To develop a specific report in a manual accounting system, data must be collected, aggregated, and combined.

Quick data retrieval is made possible by computerized accounting. Computerized account software allows for information or reports for a certain time period to be swiftly generated since accounting software will automatically pull all necessary ledger entries. Accounting software can also give businesses profit and loss statements, payroll data, sales reports, etc.

5. Tax compliance

Businesses have to comply to the taxation laws of the government. Even more so since GST has been introduced. The goal of every business is to finish taxation related tasks aside at the earliest so that they can focus on generating revenue. It is hard to multitask when everything has to be managed manually. Accounting software allows for prompt checking and matching of data.

6. No data loss

The simplicity with which a computerized system may be backed up is a critical distinction between manual and automated systems. In the event of a fire or other disaster, all transactions in accounting software is preserved .

Getting the same results with accounts on paper is impossible unless the business create duplicates of every page, which is a time-consuming and inefficient procedure in and of itself. In the event of a mishap, computerized methods allow for faster data recovery.

7. Management of data and security

Manual records need a great deal of work to keep critical company data — as space is limited. Most significantly, data security is jeopardized since the business owner must rely on people to keep the sensitive data secure.

Computerized accounting enables a comprehensive system for keeping corporate data, requiring less work and money to maintain data, and also enables automatic security levels to be configured inside the organization, providing the business owner with piece of mind.