Accounting is a fundamental aspect in the running of all businesses; large or small. It allows you to have a record of business activities you have undertaken and offers a comprehensive summary and analysis of all transactions.
This comes in handy in two ways. First, it keeps you out of legal trouble as accounting is a transparency tool. Second, it helps you to see how well your business is doing and find out what is promoting or hindering progress.
The process of accounting is not easy and often requires hiring a single accountant or a team of the same as it is a tasking job that requires professional handling. Professional accountants can either do the work manually or automatically using professional accounting software.
What is professional accounting software?
Not so long ago, professional accountants used manual methods to enter data, analyze transactions, summarize work and generate reports. Manual accounting is still practiced today especially in small businesses.
However, this can prove really stressful and tedious in larger ones where transactions are a whole lot more in number and in size. The need to solve this problem led to technology gifting the world of business with professional accounting software.
Professional accounting software refers to programs that are installed into computers to automate all the processes involved in professional accounting. The accounting software can be run off the mill or customised depending on your business’ size and accounting needs.
The software is designed in such a way that the only manual labour needed is in entering data and if need be, printing out hard copies of reports generated. The computer does all the data analysis and summary in a faster, more efficient and more accurate way.
How do professionals use accounting software?
Using accounting software is not as easy as it seems. It requires some training on what to do and how to do it to ensure that the correct commands are given to the computer. Below is a breakdown of how most professional accountants use accounting software:
Select and install software
The choice of professional accounting software is very important. It depends on the size of your business, the types of transactions and most importantly, your accountant/s/ personal preferences.
Once they choose the software, it is installed to the computers to be used in the accounting process by your accounts team. The installation is a pretty basic do it yourself process however accountants sometimes use IT experts especially when the software is customized.
Sort transactions into common groups
Professional accountants work with bookkeepers to arrange information from transactions into different groups. An example is sorting into expenditure and income earning groups. The groups should be chosen based on how the accounting software input sheets are designed. This makes the accountants’ jobs a whole lot easier and faster when it comes to entering data into the computer.
Enter data into computer
This is where your accounting team feeds the software information about your business transactions for it to analyze. The most common method of data entry is good old fashioned typing.
However, more sophisticated and complex professional accounting software allows entry of data through scanning which is a whole lot easier, faster and more accurate. Data that the accountants enter includes things like amount of money spent or earned on a transaction, taxable funds, employee groups and salaries and so on.
Run analysis tests and summaries
This is now where your accountants can sit back and relax as the software does its thing. The accounting software uses the data entered to run calculations, comparisons, assessments, predictions and so on.
It is in this step where things like taxes and payrolls are calculated. The information is summarized in a way that the accountant can understand and use to make suggestions for the company’s benefit.
Generate and print out reports
This is the final step in accounting using accounting software. The computer is usually automatically set to generate summarized reports stored in files and folders on the computer. If there is need, the accountant can print out the summaries or send them as soft copies to interested parties, such as their business mentors or fellow directors.
Get a backup of all the work done
This is not strictly an accounting practice however is very important for any business. Most professional accountants keep two copies of the transaction analysis and summaries.
This is in the form of paper documents stored by business bookkeepers and soft copy information stored on removable storage devices.
What are some of the best professional accounting software packages?
The need for professional accounting software has sparked major innovation and production of the product. There are over one hundred types of software used by accountants. Below is a list of a few of the best. If your accounts department has any of these programs then you can be sure that our business is in safe hands.
For small businesses
For medium and large businesses
Passport Business Solutions
Activity by nQativ
Customizable Accounting Software
Just For You Software
Advantages of hiring professionals that use accounting software
The value of having your accounts team using professional accounting software cannot be calculated. First and foremost, you have happy employees who are rid of unnecessarily tedious work. Secondly, the work is done in a faster and more efficient way ensuring that your business has the correct analysis and financial information to progress.
Having your accountants using accounting software is also great because of the guarantee of accuracy in mathematical computations for important things such as taxes and salaries. Finally, using accounting software is an advantage to your company as it is easier to secure information on a computer than on bookshelves.
If your team of accountants is using professional accounting software, then you can rest assured that your business is in safe hands. It will make their lives easier and as a result improve the quality of their work which is great news for your business.