Evolve or die. In the age of growth and constant evolution, traditional manual accounting systems are being left behind in the face of custom software development geared towards business accounting systems and accounting software customization.
Pitfalls of Manual Accounting Systems
The traditional accounting systems were manual and dedicated personnel-driven systems vulnerable to numerous human and systemic pitfalls of such a model.
Data Entry Errors
Data entry is a time and labor-intensive work. Manual record-keeping requires dedicated work and resources from the organization from dedicated data entry personnel. Because of its dependency on human intervention, data entry usually leads to frequent data entry errors, computational and analysis errors, and compromised reports and forecasting for the organization. These errors also compromise the integrity of the data and of the system, putting into question its effectiveness and reliability.
Risk of Losing Physical Copies
Manual accounting systems and processes generate numerous physical documents too intensive for the organization to manage. A large volume of physical documents run the risk of data loss, mismanagement, weakened security, unreliable audits, and lack of transparency. Accounting systems run on transparency and accessibility of organizational data and information. Loss of data and information can lead to an unreliable system and organization.
Inconsistent Accounting Procedures
Manual accounting systems are dependent on the highly skilled accountants, bookkeepers, and the manuals and guidelines that are geared towards establishing a framework and structure for the accounting system of an organization. However, systems change and can be adapted differently by the actual bookkeepers, accountants, managers, or other stakeholders of the organization. Another concern is the availability of these systems and the work that goes into creating and implementing such systems.
Lack of Security
Implementing a physical accounting system requires stringent security measures, as it handles large volumes of physical records that are usually proprietary and financial in nature. This is highly doable for large and established organizations but can be less of a priority for the institutions or organizations that need to focus their resources on results and processes. With less focus given to securing the manual systems, a lot can be left to the wayside - whether by data entry errors, loss of physical records, or unsecured proprietary sensitive data.
Time and Resource Consuming
Manual systems were resource consumptive - requiring numerous physical workers, long work hours, and long-winded repetitive processes, and took up a large part of the financial and operational assets of an organization. For an organization with an established manual system, the maintenance and constant improvement of their system was where the bulk of the cost went to. But for the organizations that were starting out or did not have such systems in place, the cost was for the design, development, and implementation of such a manual system.
Accounting Software for Business
An accounting software os a system that is used to collect, process, store, analyze, and report on the financial data and information of an organization or business. This type of software is mostly used by accountants, business and/or financial consultants, business and/or financial analysts, management teams, CFOs, auditors, or tax agencies.
Accounting software improves upon, digitizes, and streamlines many of the previously manual processes, and addresses the shortcomings of such systems. This type of software also aims to provide secure, accurate, accessible, and verifiable record-keeping of a company’s or organization’s financial transactions. Great examples of Accounting software are NetSuite, Vyapar App, Freshbooks, QuickBooks, WaveAccounting, Zoho Books, SAP for Finance, and Deltek Vision.
Types of Accounting Software
- Legacy Systems
- Integrated IT Systems
- Single Entry Systems
- Double Entry Systems
Accounting software systems address the issues encountered in manual systems or old legacy systems. These systems also provide businesses and institutions with an accessible, usable, and configurable system that will provide the processes they need for an effective and efficient accounting system.
Having an accounting system for business processes helps automate numerous accounting processes - data collection, storage, error correction, analysis, and reports. These processes become easier to use and more manageable to maintain for the business. Data and information collected are more accessible and verifiable to users and auditors. Accounting system customization and personal accounting software development further enhances these aspects and ensures that all the tools are tailored to your business needs and will provide the best possible information, such as real-time shipping updates, reliable freight rate comparisons, and other data from IT tools for logistics for decision-making for your business.
Custom Accounting Software Capabilities
Automated Data Collection and Processing Tools
Accounting software has the structure to collect, process, and store a wide variety of data types, such as:
- Sales orders
- Billing records
- Sales analysis reports
- Requisition records
- Invoices
- Check registers
- Ledger data
- Inventory data
- Payroll data
- Timekeeping
- Taxation records
These types of data are stored in a digital database structure, often using tools such as SQL to manage such a database. The software has the user-facing application that collects these data, stores them in the database, and has internal processes that analyze and provide reports on the data collected for the users.
Reporting Tools
Reporting is essential to any organization and business. With Accounting software systems, businesses can analyze their financial transaction and gain insight as to their financial performance and status. Generated reports from these systems provide managers and financial stakeholders relevant information to make better decisions and operational forecasts for the business. High-quality and reliable information provided by such systems help drive businesses forward and support improvement when needed.
Audit and Transparency Tools
Good accounting systems have audit trails and transparency measures that enable users to vet and review transactions, reports, and analyses that the system stores and provides users. Audit tools also enable users to review all the transactions and the steps taken to complete the reports produced by the system.
System Security
Accounting systems augment the financial data security of a business. Good accounting systems have built-in security measures to restrict access to your financial information and ensure it is protected from unwanted or illegal use. These measures can be in the form of:
- Encrypted and multi-layer access password and restrictions.
- Access control limits on the different functionalities of the tools.
- Data and information encryption.
Custom Software Development for Business Optimization
Business models have expanded to different models over the years, and among those that have gained traction is dropshipping. Dropshipping can be akin to a middle man - a business that runs on selling products of a third-party manufacturer and forwards sales orders to said manufacturer. Dropshipping enables the third-party to outsource the marketing and online retail to the dropshipping venture, and in return, the dropshipping company does not need to manufacture products and instead focus on sales and marketing.
Dropshipping businesses are among those that can benefit the most from custom or personal accounting software. This is because the accounting software for business automates many of the processes that they will need to support their venture. Even better, with outsourcing, businesses can employ freelance accounting software development services for custom software development that is tailor-made for their business venture.
Personal Accounting Software for Business Needs
In reality, having an automated system makes life easier. Even better, accounting software customization enables entrepreneurs to employ custom software development services to develop a system that best fits their business needs.
