The Importance of Accounting Software for Management
It’s true that a manual business accounting system, or even Excel for managing the finances of your business is–on the surface–cheaper than using a professional accounting software package. But it comes with a multitude of hidden costs such as lower productivity, a high risk of errors in calculations and data, and constraints limiting decision making that could influence market position and competitiveness.
That said, the cost of powerful and reliable accounting and business management software is not unaffordable, regardless of business size or industry, and switching from a non-automated system to a computerised system that connects or combines multiple parts of the business needn’t be complicated. This is never truer than when choosing a system that can grow with your business, is customisable, and developed locally, with Australian businesses in mind.
Managing the finances of your business manually or using a spreadsheet might feel more comfortable to you, but it increases the risk of data entry and calculation errors in your work. And as your business grows, so too will the risks of mistakes being made along with it becoming more difficult to find mistakes. And in any sized business, these mistakes can have disastrous consequences when using the current or projected financial position of the business to make decisions.
Accounting software minimises the risk of mistakes being made by automating calculations and updating data across multiple app modules and departments in real time. So, everyone in your business always has access to the latest data.
Modern accounting software not only eliminates the need for manual invoicing, it also eliminates the chance of mistakes being made when drawing up and issuing invoices or quotations.
You can not only control who has access to adjust the pricing for all services or products you provide, you can also create a set pricing matrix that controls bulk pricing, which customers qualify for special pricing, and which products have special pricing rules set. This translates into never having to worry about financial losses because of customers being undercharged, or reputational harm caused by overcharging customers.
And you never have to worry about invoicing a customer for any out-of-stock products, because your inventory is updated automatically and in real time.
Real-time data updates have a significant impact on overall productivity, across most departments in your business. From everyone being able to see instantly how much stock and raw materials are on hand or on back order, through to HR being able to generate pay slips without having to calculate tax and other deductions manually.
Accounting software can eliminate a multitude of time-consuming daily tasks by automating them, along with speeding up the completion of various forms by pre-populating several fields using stored data. And if you have any staff working remotely or offsite, accounting software can eliminate the need for manual timesheets that not only need to be completed but also captured into whatever time or job costing system you use.
Better Cash-flow Management
How easy is it for you to find out the state of your accounts receivable and accounts payable, and is it updated in real-time or only daily or weekly? What about your other income and expenses? These are critical to effective business management, not only for understanding your current financial position but also with forecasting.
Accounting software makes management of your businesses cash-flow simpler and more accurate, with real-time updates, and the ability to view outstanding balances by customer and payment due dates for your creditors, and carry out bank reconciliations faster and with less need for manual inputs.
Accurate Inventory Tracking and Management
Knowing what inventory you have on hand, what is on order from suppliers, and even what is on back order from suppliers or for your customers is crucial for any business, whether or not you process a high volume of transactions. Accounting software with enterprise resource planning (ERP) capabilities not only makes this information easier to come by but also, by updating across the entire system in real-time, more accurate. As soon as you capture a new order, your inventory updates to reflect this.
But tracking and management of resources is not limited only to inventory. If you are involved in manufacturing, you can get accurate details of both manufactured inventory and raw materials on hand or on order. And with batch tracking, you can create serial, batch, or roll numbers for finished products and raw materials, making it easier to track additional features such as expiry and production dates.
Rapid Analysis and Decision Making
One of the biggest benefits of using accounting software for business management comes through its ability–using the above features and a host of others–to make analysing multiple aspects of the business simpler, faster, and more accurate. This supports rapid decision making based on current performance, forecast modelling, and the impact of external factors on the business.
And this analysis and associated decision making can happen at a high level, for the entire business, or drilled down to specific departments or business units. Helping you to understand which parts of the business are the most profitable and which are underperforming.
Schedule an online demonstration of Tencia Accounting Software to discover how a powerful and reliable accounting and business management system can benefit you and your business.