When companies start operations, they default towards using excel to record their day-to-day transactions. While there are many benefits of using excel, in the current age there are several accounting softwares that have been created to enable ease of recording transactions and imbed automatic checks to ensure all transactions are fully recorded.
These softwares are tools that help companies record, summarize, and analyze all the transactions that occur in a business. Day to day transactions such as expenses, sales, invoicing, payroll can be processed easily. If the underlying data is correct, additional analysis can be performed on key balances such as Payables, Receivables, Cash and Expenses. This enhances management’s ability to carry out informed business decisions.
All accounting softwares also offer the option of integration with business bank accounts to allow companies to download transactions instantaneously. This ensures timely recording of transactions and accurate financial reporting.
All data recorded on an accounting software is stored on a cloud-based secure server which means it can be accessed from any device anywhere including mobile apps. Multiple users can benefit from this as they can access data without having to request ledgers and reports from individuals. User rights over data can also be controlled to ensure confidential data can only be viewed by the appropriate individuals.
Cost
These softwares are generally economical with basic versions starting for as low as $15 a month. However, as companies grow and add more features, the cost can add up. Bespoke softwares and specialized ERPs are significantly more costly however the largest portion of the cost usually is the initial implementation which is followed by low maintenance costs. However, in the long term, the benefits of such a system far outweigh the costs.
Success of implementation
As with all systems the key to success is that all users, especially those responsible for recording information, undergo the appropriate trainings to be able to effectively use the chosen accounting software. Additionally, management would need to imbed and encourage the use of the system. If this is not done, it can cause inefficiencies and be a drain on the company’s time and resources.
Different Accounting Softwares
1. QuickBooks
It is a user-friendly interface which makes it easy to use for individuals that have no accounting or finance background. It has all the features including invoicing, payroll, tax compliance (as per the location of the business) and financial reporting in their basic version. There are other add on features that can be purchased at an extra price such as multi-currency options, inventory tracking, time tracking etc. QuickBooks is ideal for small businesses.
2. XERO
Xero was built with bookkeepers and accountants in mind and therefore is ideal for larger sized businesses with an inhouse finance team. Xero is also better at tracking profitability at a project level as it allows you to stack the project costs against the estimated profits in real time. As with QuickBooks, there are additional add on features in Xero that can be purchased at an extra price.
3. Zoho
Zoho is a great choice for small businesses or freelancers that require a simple software that’s easy to use. It works for companies that have small budgets and don’t need many features or integrations. Although all accounting softwares do have a mobile app, the Zoho Books app is highly recommended across all and is a great way to record your transactions.
Other than the three highlighted here, there are countless other softwares out there which offer comparable features and integrations. At the end of the day, they are all similar in nature and offer all the benefits mentioned above compared to traditional excel based accounting. At Balance Consulting our team of specialists are highly trained in the use of all accounting softwares. We can work with you and your team to transition you from excel and maintain your books so that your company can get the full benefits of the transition. Get in touch today at [email protected] for a consultation. We would love to help.