Learn All About Accounting Software

"Accounting is the language of the business." - Warren Buffet, CEO of Berkshire Hathaway, business tycoon, philanthropist and investor. 

Accounting and accountants are indeed the backbones of any business. We mean, it's hard to imagine an organization without an accountant who can help lower the spending and utilize funds in the best possible manner. 'Accounting' may seem like a single function but it has multiple departments such as managerial accounting, auditing, financial accounting, costing, taxing, etc. Phew! The list is endless. As we said earlier, Accounting Software is like a best friend to accountants; one that helps in simplifying financial tasks and allows detailed tracking of financial transactions and instantaneous analysis of the records.

Accounting Software spots the financial conditioning of the business. It keeps track of every ounce of your financial data (such as expenses that can be reduced, departments making a profit and suggesting suitable alliances which can earn a fortune!). Eventually, it helps you focus on seamless financial planning and insightful decision-making.

We bet you (and Loretta Castorini!) would be just as curious to know more about Accounting Software! Let's not wait and head toward the next section.
 

Accounting Software - The Ultimate Helping Hand For Accountants!

Accounting Software is a program that assists accountants and bookkeepers in recording and reporting the firm's overall transactions. However, the functionality of Accounting Software varies as per the type and scale of an organization. Accounting Software has emerged as an invaluable resource for modern businesses; it is an application that allows companies to record the flow of money for internal and external auditing purposes. You can bet that’s critical for businesses!
 
Accounting Software varies from basic single-entry programs used for personal record-keeping to sophisticated systems for payroll, accounts receivables, accounts payable, inventory, etc. It also ensures conventional storage of financial data, thereby reducing the paperwork and chances of manual errors.

After this revelation, Loretta must have understood that accountants use Accounting Software to keep track of cash flow, receipts, payments, etc. What about the era of Pre-Accounting Software, a period when Loretta was a bookkeeper? How did Accounting Software evolve?

Well, Loretta is here to decode its evolution.
 

Once Upon A Time…

Once upon a time, accounting was about making manual entries in registers and the arrival of computers changed everything.

The story of this evolution begins somewhere in the 1970s when the first Accounting Information System was designed for salary and payroll. These systems were mainly in-house legacy systems (old technologies or applications), which were costly and required high maintenance.

The year 1978 was the birth of Visicalc (Visible calculator by VisiCorp), the first spreadsheet software that enabled financial modeling on the computer. In the same year, Peachtree, an Accounting Software package for personal computers, made an entry and took accountants by surprise (so, it was the year of double happiness!).

The 1980s denote the development of comprehensive software systems. Companies such as Microsoft, Oracle and Sage Group developed customized and configured versions of Accounting Software. In 1988 (yeah, just a year after the grand entry of Loretta on the big screen!), Quickbooks made its first appearance. Slowly, small and medium enterprises began to use affordable packages such as MYOB and Quickbooks, while large enterprises chose comprehensive Enterprise Resource Planning (ERP) systems. These systems had a variety of modules for accounting, auditing and financial management to ensure centralized storage, planning, decision-making, etc.

The consistent revolution in the finance industry has brought us to the present age where Accounting Software is integrated with cloud-based storage and information systems, making everything available at optimal cost, thereby decreasing manual transactions and manual accounting operations. Yeah, it's an era where Artificial Intelligence plays a crucial role in automating payroll, taxing, banking and so on.

After this brief #sneakpeek of the evolution of Accounting Software, let’s see how it actually helps accountants.
 

The Helping Hand That Made It Easy!

This is how Accounting Software makes your tasks easier.
   

• Budgeting

  Benjamin Franklin has quoted, "Beware of the little expenses; a small leak will sink a great ship." Accounting Software calculates and interprets the financial condition of the business and helps in budgeting for the upcoming fiscal year. Implementation of this software enables companies to plan their estimates and set up possible sales targets. Long story short, Accounting Software anchors your business and ensures that your ship never sinks.

• Payroll Management

  As the saying goes, “A happy employee will lead to happy customers.’’ No point in guessing what makes employees happy. Of course, it is the bank account statement saying- Your salary is credited! This is where Accounting Software plays a major role. It simplifies the tasks related to computing and processing employee payments, drafting checks without delay and meeting legal and dynamic commitments with no errors at all. In a nutshell, it will help Loretta to create a hassle-free and happy environment at her new workplace!

• Inventory Management

  “Inventory is money, sitting around in another form.” Delivery issues such as overstocking and understocking arise as significant obstacles in the process of Inventory Management. Accounting Software arrives with stock control options based on data to control the availability and movement of products. This keeps the delivery issues at bay. Hurray! Your money (in cash and other forms) is safe!

Now it’s time to list down a few points about how this helping hand is important for accountants and your business. Let’s go!
 

What’s The Importance Of This Helping Hand?

Loretta, to illustrate the importance of Accounting Software here we are presenting a few rich accounting advice from the financial bestselling book - Rich Dad Poor Dad. 
 

• “Most people don't understand why they struggle financially because they don't understand cash flow.” Accounting Software benefits accountants by managing their cash flow. It helps you prepare reports of your revenues and expenses so that you can predict, plan, budget and schedule your cash flow.

• “The number one expense for people is taxes.” Accounting Software helps calculate taxes, pass journal entries for taxes collected or deducted and keeps your business tax compliant. In a nutshell, Accounting Software enables you to keep track of your number one expense.

   

• "The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be an instant." Be it the mind or business activities, "control'' is a key to yielding better results. Accounting Software makes your data easily accessible and you get full-fledged control over it. Surely, this will enable better decision-making!

Loretta, that’s how Accounting Software is useful to you. Hold on, hold on, there’s a lot more in the future. Interested to know? Here we go!
 

The Future Transformation Of Accounting Software

The upgrade in blockchains will help Accounting Software maintain smart contracts (automatically executed programs), standardize the auditing procedure and make the whole accounting process more secure and transparent.

Accounting Software has already reached the cloud but the future will pave the way for more secure methods so that accountants like Loretta can access financial data from any device, not just desktops. Besides this, because of Machine Learning, Accounting Software will become smarter and will seamlessly perform the tasks that earlier required human intervention.

Although AI will not completely replace Accountants (don’t worry!), it will assist them in decision-making and empower in-depth analysis. Automation will also eliminate tedious and monotonous tasks so that Loretta can keep everything up-to-date and allot more time to other important tasks.

Approximately 45% of accounting activities will be managed by Artificial Intelligence. The future will witness an estimated rise to 85%, leading to full automation of manual accounting tasks. This will include fully automated tax filing, real-time risk assessment, bank reconciliation and a lot more!
 

Conclusion

We hope that this article successfully served the purpose of explaining everything about the ultimate helping hand of accountants. Accounting Software records and processes transactions across the business and serves as a centralized accounting information system, helping decision-makers and accountants monitor business processes and generate financial reports. Investing in the right Accounting Software will help you with everything from automated invoicing and billing to tracking online payments and extensive expense management and other critical accounting processes!