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Accounting software assists businesses in effectively monitoring the flow of finances by minimising administration work and ensuring ongoing tax compliance.
Accounting software assists businesses in effectively monitoring the flow of finances. In SA, many companies are using accounting software to minimise administration and ensure compliance with the SA Revenue Service (SARS).
What is accounting software?
Essentially, accounting software allows business owners and accounting professionals to process all transactions and manage accounts easily and efficiently. The flow of all accounts is recorded, which allows for quick internal and external review as well as the auditing of accounts. In SA, accounting software is often used for small to medium-sized business, with large corporations generally relying on their own internal accounting software.
What are the types of accounting software?
Every company is different, and that means varying accounting requirements. No matter your business type, however, there is a form of accounting software that will meet your unique business needs. Some examples of accounting software types include:
Payroll management systems
For a business needing a handle on account payables and receivables, this accounting software is the best fit. It performs tasks such as salary calculations and payments, deductions, and generating payslips.
Enterprise resource planning (ERP) systems
A very valuable accounting software, ERP solutions combine all systems used for product planning, material purchasing, inventory management and control, distribution, accounting, marketing, finance and human resources.
Billing and invoicing systems
All daily accounting tasks, such as outstanding payment notifications, can be performed by this system.
Time and expense management systems
By speeding up the billing and expense approvals, this system ensures quicker payment collections, while detailing how time and resources are used.
What are the features of accounting software?
Accounting software in SA differs greatly, which means that the features included will also differ. There are, however, some core features such as:
Billing and invoicing
Inventory or stock
In addition to these key features, accounting software options could also include some added extras such as:
Electronic payment processing
Automatic data backup
Budgeting and forecasting
External application integration
What are the benefits of accounting software?
If you are considering investing in accounting software for your business, but are still unsure whether it’s the best way to spend your hard-earned money, here is an outline of the substantial benefits.
1. Saving on time
By replacing manual calculations and record-keeping, you are able to save on valuable working hours that could be far better spent on achieving long-term business goals. If the bookkeeping tasks are handled in-house, you are now freeing up an employee to perform other business-enhancing activities.
2. Decrease errors
The reality is that human error is one of the biggest issues when it comes to in-house accounting; something that is mitigated when you implement accounting software. Mistakes in calculation and typing will be removed as this will be organised by the software. Many programs will be able to automatically make calculations as data is entered into the system, as well as transfer funds and adjust assets. Any miscalculations are quickly identified and corrected.
3. Cost savings
While many companies may hesitate to implement accounting software because of the initial or monthly costs involved, it’s important to note that these costs will be absorbed by the long-term savings. The aforementioned time savings translate directly into increased work hours, and there is no need to pay an extra salary for accounting duties. In addition, minimising error and ensuring tax compliance means no penalties at a later stage.
4. Management of finances
With manual accounting, most work is done at the end of the financial year, when businesses prepare tax records. However, with accounting software, there is ongoing financial updating, which means you are able to have a more accurate overview of the business finances at any given time. This allows you to resolve any minor issues before they escalate, or identify areas where you can improve business operations. By tracking your payables and receivables, you are able to assess your future cash flow and amend where necessary.
5. Secured database
Accounting software is password protected and, depending on the type, could come with additional security measures to prevent confidential information from being leaked or numbers tampered with. Because your financial data is being stored digitally, you are able to protect it from outside elements such as natural disasters.
6. Synchronisation of information
Most businesses anticipate growth and, alongside this expansion, comes an increase in the amount of administration needed for daily operations. Using accounting software, you are able to synchronise your respective files across a variety of platforms, making access to information much simpler. Certain accounting software types are able to provide real-time status updates as well.
7. Ongoing tax compliance
Keeping up-to-date with all the SARS requirements can take hundreds of hours; time which could be better spent on improving business operations. Without tax compliance, however, your business is likely to incur unwanted penalties. By using accounting software with tax features, you are ensuring that all South African tax regulations are adhered to, without any of the hassles.
8. Track inventory
If your business manages inventory, then software accounting will track the inventory as products orders are processed. This means you are always able to monitor how much product inventory you have with orders made when the product gets too low.
What to ask your accounting software suppliers
Before committing to any South African accounting software options, here are a few questions you could put to them first:
What are the costs of updates?
How often must the software update?
Does the software run online or offline?
Can I access the accounting software from a mobile device?
Is there a trial period?
Do you offer any training?
How long does the software set-up take?
What security options are available?
What data backup options are there?
What features are included in the software?
Are there different pricing options?
Could you outline what support services you offer?
Do you have any client recommendations I could review?
If you are the owner of a small or medium-sized business, then investing in accounting software will have a positive effect on your day-to-day and long-term business operations. It’s worth consulting with local industry experts to ensure you are choosing the right software for your particular business model.
Issued By: Omni Accounts