Gone are the days when bookkeepers managed company finances with paper and pencil. Today’s accountants use digital management options ranging from Microsoft Excel to the latest accounting tools. Small businesses that recently digitized their records might be wary about switching to an online or cloud-based accounting software tool, but this next step can help companies of all sizes better manage their books.
Bookkeepers and accountants in businesses looking to digitize should consider these challenges and rewards to prepare themselves for the future of financial management.
Accounting Software Is More Efficient for Data Gathering
Instead of managing their books in a series of data sheets that grow increasingly complicated as the business grows, bookkeepers can use software accounting tools incorporating digital forms and data input documents that can be organized and analyzed with just a few clicks. Whatever data is needed, it can be requested and filtered in a few minutes, saving time for the accounting staff.
The Balance mentions that accounting software can also help during tax season when companies need to gather their finances, report which taxes have been paid, and determine what is owed. Organizations can use accounting software to gather specific tax information and use it to complete various government tax forms. Some accounting tools actually pull numbers specifically for these forms, making tax filing an easier process.
Even if accounting software only saves the bookkeeping staff a few hours per week, it can greatly reduce accounting errors while saving time. These benefits can outweigh most costs for companies that struggle with bookkeeping.
Various Manual Accounting Process Can Be Automated
Along with making data input and analysis easier, automation is another reason many accountants prefer to work with online software. According to Accounting Web, businesses can automate a variety of processes, but should choose the ones that have the largest impacts on their bottom line. These might include automating employee payroll entry or setting up regular payments for vendors and contractors. Instead of employees spending several hours per week completing these tasks, the system will do it for them in a matter of minutes.
By removing the most time-consuming and manual tasks, accountants can use their skills to find ways to run the organization more efficiently, saving the company money. These types of jobs require more critical thinking and research, but there are sizable benefits. Organizations that find ways to save money or identify mistakes in their existing accounting systems can increase their overall revenues and reinvest those funds in ways that will help the business grow.
Digital Tools Are Safer and More Secure Than Regular Sheets
One of the main advantages of implementing accounting software is the improved security of financial data. When employees have access to regular data sheets, the information those sheets contain can easily be compromised, whether maliciously or by accident. Access to a company’s financial information should be more carefully controlled than is usually possible with manual or even computerized bookkeeping materials kept on company computers.
Software accounting tools allow much better control of sensitive financial information. QuickBooks, one large accounting software manufacturer, says that it follows stringent cloud security regulations and works tirelessly to protect its customers. Employees can only see what management wants them to see and access can be revoked with a few clicks. If an employee leaves the company, the employer doesn’t have to worry about the exposure of company information. They can simply adjust the access permissions and keep sensitive financial data locked online.
Companies Need to Find Tools They Can Afford
While there are many benefits to implementing accounting tools, they are certainly more expensive than operating with free options like Google Sheets or Excel charts. According to NIBusinessInfo, small businesses with only a handful of employees and clients might decide the investment is not worth the time saved. The minimal benefits of increased data entry might only save an hour or two per week while costing the company significantly.
When looking for accounting software, businesses should look for tools that offer free trials or specific options for small businesses. This allows companies to test the software and see if it is right for their organizations.
Finding scalable software options can help businesses that have plans to grow significantly in the future. A company might only have a few employees today but may grow to a few dozen in the next few years. Software plans that can scale up allow the company to pay more as it adds employees, maintaining cost effectiveness without having to switch accounting software providers.
Software Tools Require Specialized Training and Skills
Not only must businesses invest in the cost of the software, they may have to pay for employee training and certification to use it. QuickBooks is a good example of accounting software that requires specific skills. There are courses that teach accountants to fully understand the platform and make the most of its data entry and payment options. Without these accounting software skills, a bookkeeping team could struggle with the new tools as they adapt to them in the short run.
Vacation Village recently surveyed the top accounting software tools required by the largest organizations in America. While Microsoft Excel was listed as the most important skill for accountants, SAP, Microsoft Dynamics, and Oracle were also listed as key software platforms for accountants to understand. Smaller businesses preferred QuickBooks for managing their businesses.
Students who pursue an online master’s degree in accounting are uniquely prepared to operate within a digital accounting world. With their expertise in the use of online tools, they can be better prepared to work with accounting software without lengthy training periods.
Whether you are considering improving the accounting department of a small business or working in finance for a large organization, consider advancing your education with a New England College Master of Science in Accounting online. With the right tools, you can improve your resume and be better prepared to tackle the accounting software that top professionals use today.