Technology

What is Accounting Software?-Functions, Types, and more

Accounting software is processer software used by accounting specialists to manage accounts and perform accounting transactions.

Accounting is the systematic practice, work, or process of communicating and recording financial information. A business environment is complete for internal and external audits, reporting, and financial analysis to comply with legal or internal management requirements. Accounting may also involve the systematic and varied measurement, classification, verification, summation and interpretation of financial information.

Accounting software can range from simple single-entry plans used for separate accounting to more complex dual-entry systems that can handle receivables, payables, payroll, and inventory.

What are the Goals of Accounting Software?

The main objectives of this type of system are to simplify and streamline accounting processes to save time and resources in their execution while reducing errors associated with manual accounting treatment: data redundancy, poorly performed calculations, etc.

In this way, the accountant is much more productive and can dedicate part of his time to high-impact tasks, such as analyzing information and advice in the accounting, tax and financial fields.

And the Functions of Accounting Software?

The functionalities of an accounting system may vary from one product to another, but in general terms, a quality technological solution should allow us to carry out the following operations:

Record, Systematize and Securely Store all Company Operations.

Systematization of accounting must be complete in predefined charts of accounts and those that the user deems convenient to create.

  • Generate accounting reports automatically, such as accounting books, 8-column balance, income statements, etc.
  • Integrate accounting with the electronic invoicing system. It is essential in Peru since we are at the height of implementing the digital invoice, and more than 300,000 taxpayers have already adopted it.
  • Massively upload data of purchases, sales or receipts.
  • Perform automatic calculations.
  • Reuse and capture information from previous transactions without re-recording it.
  • Customize different user levels.

It is essential that, in the calculation of the functions of an accounting software listed above, the system is easy to use, scalable and flexible (that it adapts to the accounting plan of the company).

On the other hand, one of the recommendations is to acquire a solution that operates in the cloud, to guarantee remote access to information.

Types of Accounting Software

Starting from the main objectives of any accounting software, the types of concentrate on three:

  • Generally accounting.
  • Billing specifics.
  • Specialized in payroll and labour area.

We can find accounting-type software specializing in calculating accounting ratios, developing reports and analytics, or simple tax calculations outside of these three types.

Advantages and Disadvantages of Accounting Software

Although the process of digital transformation or digitization of a company is synonymous with progress, the bottom line is what matters.

Some advantages may be the speed of data consultation, the systematization of tasks and the consequent saving of time, or the generation of reports thanks to the correct use of big data.

On the other hand, disadvantages that may arise from using this type of software can be excessive dependence on the digital environment, a more significant barrier in terms of exercising the accounting profession and even the possibility of remote data theft ( hack).

Examples of Accounting Software

Even though there is an extensive range of computer programs and applications-oriented to accounting tasks, the main ones are:

  • Sage One, of the SAGE business group.
  • Control, from the company ‘Software del Sol’.
  • A3, in this case, the program is property of A3 SATEL.
  • ANFIX, from the company ANFIX Software.
  • Oracle EBS, from the Oracle company.
  • Microsoft Dynamics, from the Microsoft company.

Although there is more accounting software, these four are among the best known. You can choose one option or another among the dozens of software of this type on the market.

Advantages of Accounting Software

On the other hand, the programs used in accounting provide several benefits to the company. Let’s review some of them:

Integrates with other company applications

As we all know, company information only grows and becomes more complex over time. Therefore, many accounting programs integrate into the different applications of the company. In this way, it is possible to access the information of two or more other applications from the same place.

These programs participate with internet payment gateways, customer relationship management software, reporting applications, and information management systems.

Data Loss is Compact

Creating backups of all the papers and books can be a chore, and many people don’t want to copy all those files by hand. However, if you don’t make copies of these, you could quickly lose essential documents.

Fortunately, many accounting programs take care of organizing and storing data. Moreover, how it is stored is easy to access, thus facilitating subsequent revisions and consultations.

It makes Information more Accessible

Today there are alternatives such as cloud accounting software. These options allow you to access your numbers whenever you want. All you need is an excellent mobile device and an internet connection.

Tax Simplification

Taxes often take up a lot of valuable time for businesses. Generally, it is necessary to keep track of all the operations, calculate the amount and fill in the income. Accounting software simplifies this process by keeping everything in one place.

Automate Tasks

Entering data yourself is not only tedious but also causes many errors. By automating tasks, you avoid these problems and significantly increase your productivity. For example, a good accounting program makes data entry a one-time entry and will automatically pull your information when you need to create a transaction.

 

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