What is accounting software?

Posted by easyops on March 25th, 2020

Accounting software is used to digitize the entire accounting process of one’s company. Accounting software is especially efficient when it comes to processing financial transactions such as account receivable and payable, invoicing, tax compliance, managing income and expense statements, balance sheet, payroll, etc. 

This automation of processes due to accounting software leads to severe changes in the functioning of a company. It causes a reduction in staff costs who would have previously been appointed to work in manual processing of data. Subsequently, there has also been a reduction in human errors that are bound to occur when data is manually processed.

Advantages of accounting software

Accounting software can largely save time and money due to its features. These being:

Simple data entry– Accounting software enables fast and quick data import. This is extremely simple and takes place within seconds without any lag time. 

Reports automatically - Debtors and creditors are automatically registered on the software. Further, all profit and loss, customer purchase history, inventory status and inventory management software helps for inventory predictions are automatically notified to you.  

Reducing the scope of errors– By using artificial intelligence as a means of calculation, the scope of errors is greatly reduced. When manually executing complex calculations, chances are you might make mistakes in calculating the totals or simply in typing.

The invoice software allows you to include tax percentages when required, With the system responsible for performing all calculations; This tool is an especially useful advantage.

The majority of the invoices are detailed invoices. These invoices have hours or specific items which are required to be billed at different rates if your system is set up properly, you can do this with ease. All you have to do is pick and choose items you want to be mentioned in the invoice and the rest is executed automatically. Hence, there is a low risk of mathematical blunder and any errors in accounting software.

Time-Saving- In an accounting software package the most beneficial factor is its advantage over manual bookkeeping in terms of time required. By incorporating a computerized accounting package to your daily accounting needs you can manage front end business documents and back end transaction recordings simultaneously. All your accounting needs can be taken care of at the same time.

Financial Statements- In the traditional system of manual accounting framework, the overall general record is formed only towards the end of the year and the purifies for every record are assembled to make an arrangement of money related proclamations for assessment and administration purposes. In an electronic bookkeeping framework, monetary articulations for any time frame can be created with the snap of a catch.
This avails the business director of a company to timely survey an organization's monetary execution regularly and hence, address any possible worries before they prove to be a risk factor.

Cash Flow Management- accounting software keeps track of all your bills and customer invoices. The great advantage of recording receivables and other payables is that it enables the system to project your cash flow position into the future.
If you have regularly submitted all of your bills and all of your customer invoices into the software along with the accurate dates, the software will build a report showing you whether you have enough money to cover the bills that are due; as well as predict forthcoming payments and bills. This predicting and planning tool will majorly help you avoid any overdraft charges and unnecessary late fees.

Easy to navigate- The other advantage of accounting system software is that it is easy to navigate; even if you have not used one before the software is fairly fuss-free with a user-friendly interface. The software doesn’t require any previous coding knowledge or for the user to be tech-savvy, basic knowledge suffices.

Overall advancement- Accounting software paves the way to overall advancement in the functioning of a company. The accounting process runs faster and efficiently, which is a major advantage. The traditional system of accounting which incorporated a manual paper and pen has been replaced by printed professional invoices. Accounting software has even enabled companies to send out formal invoices via e-mail. The faster that the invoices are delivered, the faster is the payment transfers. This was not possible before the automation of accounting. Many invoicing or billing software packages to interface with the rest of your accounting software, making the process of preparing invoices and recording them seamless, fast and automatic.

Fulfill recordkeeping purposes- All Organizations, no matter how huge or small require an exact record of their funds. This is since at times there might be lawful implications that come with these records. Accounting software bookkeeping can disentangle parts of record-keeping that may in some way or another be inclined to botches. This is greatly beneficial as opposed to depending all alone on a paper record and a number Cruncher, which is not always reliable; bookkeeping programming computerizes the records making it easier to spot any mistakes.

Best accounting software in India

Some of the best accounting software in India include Tally, Busy and Zoho books. All of these software are all beneficial on their own and hence preferred by a majority of companies in India.

For statutory accounting, Tally is the No 1 accounting solution in India. It is largely used by all the CAs. it is the most suitable for small and medium-sized businesses.   Tally is simple to use, intuitive and also enables businesses to manage GST compliance.

Additionally, Quickbook & ZOHO books are easy to use cloud accounting solutions as well. These software easily managesOnline payments, workflow automation, seamless integrations, and more with ease. Hence crediting to their popularity.