20 Feb Benefits of Accounting Softwares
Accounting software enables you to manage and track your business’s financial transactions easily and accurately. Different vendors offer accounting software with different additional functions that may be useful depending on your nature of business. For example, some software are designed for basic accounting function and some are designed to manage more complex accounting functions and may includes other integrated function such as inventory and payroll. These are some of the benefits in using Accounting Software than the traditional bookkeeping methods.
Increase in Accuracy
Accounting software can assist to reduce or eliminate human errors especially in calculation hence improving the overall accuracy of your financial report. Traditional bookkeeping processes involve making a lot of mathematical calculations by hand or even mentally which most of the time will incur a miscalculation or even a double entry. It will be time consuming to look back at each individual transaction to identify the erroneous record that could affect the year-end financial reporting. However, as much as the accounting software can eliminate errors in calculation, it is still prone human errors arising from data entry.
Reduce Time Spent on Generating Financial Reports
Computers are well-known for processing information faster than a human brain. Hence by using accounting software, it allows businesses to process their accounts in a much shorter time compared to manual processing.
For example, the calculation of GST is done automatically when a business were to issue tax invoices directly from the software, however in many manual issuance of tax invoice, such calculations of GST or discount has to be compute manually by hand.
Generation of Useful Financial Insights
Some softwares can provide useful insights on your business financial well-being. The software can easily identify important indicators affecting the Profit and Loss of the business which can then be taken into discussion by the management to improve the overall profitability of the business.
Reduce in Accounting Cost
With the software, the accounting team has lesser manual work and hence the team can be reduced to just having someone who can ensure data accuracy. There is also integrated functions for payroll and inventory that can further reduce the company administration cost.
Generation of Financial Reports
Accounting software helps businesses to supply the accounting team with timely and accurate financial information. Most of the accounting software has reporting functions that enable users to create this various type of financial report such as the profit and loss, balance sheet, general ledger etc by a click of a button. Traditionally, creating such a report manually take days to months.