The Accounting System: In Retrospect

Is an accounting system or accounting software for that matter, a prerequisite in business?

You might ask yourself, “Do I need accounting software?”

For starters, you cannot successfully manage your own business without some sort of an accounting system in place, whether manual, on-premise or perhaps a cloud accounting software.

And whether you choose manual over on-premise, or you will rely completely on  cloud accounting software, the decision depends on the kind and nature of business you are in. 

Let us now check the advantages and disadvantages of the accounting system.

We all know that a reliable accounting software is likely to benefit businesses.

However, such accounting software may sometimes come with its share of disadvantages, so let’s first take a look at these.

Disadvantages of accounting software:

In any new technology and digitization,  there are certain aspects that are worth checking to shed light on what you need to verify.

Here are some disadvantages of the accounting software.

1. Budget and Price

If you want to improve your accounting and payroll, you have to be ready to allocate a budget for the accounting software.

There is a cost to the package attached to it, and although it is lesser as compared to other operating costs, it is still higher compared to the cost of manual accounting and other paper-based system.

2. Implementation

Manual accounts are generally easier to set up and can be more flexible than computerized accounting.

You will probably need some initial help setting up accounting software.

Your accountant or system provider will usually charge you for this service.

3. Training and Development

Because it is something new, you might have to rely on the provider’s training and development for the use of the said accounting software system.

And this also is part of the cost that you get to pay at the onset. 

4. Support

You may need to purchase yearly maintenance and IT support for the package you have chosen.

5. Customized support for Specialized needs

There are businesses who have more complicated needs and requirements compared to others.

This is where a customized support comes into play when there are specialized needs that have to be addressed.

And software customization comes at a premium. 

6. Learning Curve Phase

Accounting software may sometimes also have a steep learning curve, so if you are more comfortable writing up ledgers and books, keeping manual accounts may be a simpler option.

If you are the type that you don’t want to go through the hassle of learning new things and just get on with what you have currently, then having a new accounting system is not recommended.

Advantages of accounting software:

Now let us now look into the obvious advantages of the accounting software system.

The benefits include:

1. Simpler and user-friendly data entry

It is typically fast, straightforward and only required once.

2. Fast and Easy

There are no more delays. Sales and invoicing are automatic.

3. Digital recording

All information is recorded and can be accessed anytime especially in calculating taxes.

4. Automation of Reports

Reports are efficiently done.

These are profit and loss reports, Debtors and Creditors list, Customer accounts updates, Inventory management reports, Sales, Forecasting and other related financials.

5. Analysis of Reports

Aside from generation and automation of these financial reports, one of the advantages of having an accounting system is the analysis of reports that can help in formulating marketing strategies and making informed business decisions.

6. Tasks Automation

Payroll processing, calculating pay, generating benefits and addressing labor-related concerns, producing payslips, calculating and submitting VAT; all these are easily done by just a push of a button.

Automation is the name of the game, hence a cloud-based accounting system is advantageous for businesses with profound needs. 

7. Integration with other systems

An automated and cloud based accounting system is beneficial because it can easily integrate with other tasks such as online banking and e-filing.

Making use of an accounting software system in retrospect has its own fair share of advantages and disadvantages.

But, at the end of the day, it can help you save time and money, and offer you valuable insight into your business. 

If you choose properly and determine as well as lay down what your company needs, investing in a cloud-based accounting software system can be one of the best decisions you make.

If you want your business to reap the rewards of efficiency, then investing in an accounting system is the way to go. 

The cloud accounting software for your business is here.

EasyFS is a Software-as-a-service (SAAS) sales, inventory and Accounting system designed for Micro, Small and Medium (MSME) Enterprises.

If you want to manage your business in real-time and in a WFH (Work from Home Setup), EasyFS can provide a turn-key solution to your most common business problems to effectively monitor your sales, checking your LIVE inventory stock quantity and most importantly the status of your business’ financial health.

On top of that EasyFS is CAS (Computerized Accounting System) compliant ready for government taxation in the Philippines.

Book for a free demo today through EasyFS:  https://human-incubator.com/easy-fis/