Following the switch to Microsoft Windows in the late 1980s, there was last significant wave of software adoption for financial management and accounting. Today’s most popular financial software programmes are a direct result of this transformation. The Internet predates the use of QuickBooks, Microsoft Dynamics, SAP, and Oracle.
These systems have a flaw in that they were never intended for the always-on, always-connected, always-working world of today. You are forced to spend money on pricey, permanent changes rather than having the option to configure your machine instantly. As a result, vendor lock-in causes you to be delayed.
It is challenging to obtain the reports you require with the appropriate information at the appropriate time due to this lack of flexibility. And for this same reason, a large number of businesses are still using antiquated, out-of-date accounting and financial management software. Using one of these older systems has a number of negative effects, such as rising overhead costs, functional restrictions, and needless risks.
Also, it has a cost to be unable to see your organisation’s financial and operational KPIs in real-time. It represents the price you pay for your rivals’ quicker and wiser decision-making.
Accounting software enables you to maintain control over your company’s finances and future. Regular tasks can be automated, such with managing spending and invoices and filing statutory returns.
Accounting software may help you create forecasts, monitor your business, and provide helpful management information.
You have control over your company’s financial management thanks to accounting software. Customer, supplier, and other information only needs to be entered once, and the software will do the tedious job for you.
Generate bills and invoices on the screen
- Use the software to automatically generate purchase orders and invoices after entering information about sales and purchases.
- Add or connect information about your clients and suppliers so that the contact information is automatically retrieved.
- Save details about your goods or services so that you may automatically insert names, prices, and other information.
- Specify specifics for discounts, commissions, and VAT rates (and any VAT systems you employ). Most systems will enable you alter them so that invoices can be generated automatically for various clients and goods.
- Use the built-in checking features of the software to reduce data entry errors. For instance, the software should verify the accuracy of dates, client numbers, VAT codes, and other entries.
- Sending papers like invoices, statements, and remittance notes by email is a good way to save waste, delays, and costs.
- A few packages include electronic invoicing, which sends the invoice to the client’s purchasing system for processing.
The software handles routine bookkeeping
- The software will automatically update your accounts as you enter information about sales, purchases, and other transactions. For instance, if you enter a stock buy, the price is entered and your stock level is updated.
- As a result, anytime you need it, you should be able to view the most recent data on client status and stock levels.
- This could facilitate the process of ordering supply. Many accounting programmes have stock control modules or independent stock control software that can be automatically integrated with them.
Pay strict attention to your money status
- The software needs to display how payments and receipts affect your cash situation together with information on your bank balance and any payments that haven’t yet cleared.
- Using several bank accounts (plus any credit or debit cards) Ensure that the system is configured to distribute payments properly.
- Connect to your online banking safely. This gives you a fully up-to-date cash situation by enabling the programme to retrieve the specifics of your most recent transactions and reconcile them with your accounts.
- Use any extra modules that can aid in normal administration.
- Numerous service providers provide payroll functionality that makes it simpler to compute, print, and send payroll information to HMRC. For this, you typically have to pay more.
- Every time a business pays its employees, it must now submit online payroll data to HM Revenue & Customs.
Filling up statutory returns
It is much simpler to complete statutory returns and annual accounts with automatic bookkeeping.
Software should make the process of preparing VAT returns easier and faster
- The programme ought to display all the details you require for your VAT return as long as you enter all of your transactional information.
- Accounting software should also be able to keep track of when your subsequent tax bill is due and display your VAT liability at any time.
The software will make dealing with HMRC simpler
- You should be ready to present a statement outlining your year-to-date profits (or losses).
- You can anticipate future profits and the amount of tax you will owe by creating forecasts. Your cash flow prediction will indicate when your tax obligation is due and whether you have enough money in the company to cover it.
Automation of tax and VAT returns can be aided by some accounting software
- Most accounting software enables direct submission of VAT returns to HMRC.
- Companies impacted by Making Tax Digital are recommended to prepare and submit VAT returns using accounting software.
- Providing your accountant internet access to the software can simplify, speed up, and lower the cost of preparing tax returns.
The programme aids in year-end accounting preparation by your accountants
- You should be able to generate a “trial balance” using the programme, which adds up all the debit and credit balances and checks for discrepancies.
- The ability to generate a profit and loss account that summarises your performance for the year should be available in every accounting software.
- An asset and liability balance sheet should be generated using accounting software.
No stress VAT
- Any software programme ought to be able to manage VAT accounting using invoices.
- The data required for your VAT return ought to be readily available, together with a comprehensive list of all transactions.
Verify that the programme can handle any VAT method you employ
- For instance, if you employ the flat rate or VAT cash accounting schemes.
- Certain software programmes could struggle to work with less typical VAT schemes.
You ought to be able to specify the various products’ VAT rates
- Make sure the software can handle various VAT rates and requirements, especially if your company sells internationally.
Examine how simple it is to alter the software’s handling of VAT
- If your company is not registered for VAT or if you plan to register or de-register in the future, this will be crucial information.
Accounting software gives you immediate access to data that can be useful for your daily tasks.
Strengthen your credit management
- To see how much money your clients owe you, you should be able to run reports.
- By analysing the data according to several parameters, such as geography or salesperson, you might identify potential issues.
- You should be able to generate reports from the programme that indicate each customer’s payment history and current amount so you may decide how much credit to extend to them.
- When accounting software and a customer relationship management (CRM) system are combined, your sales staff may access detailed information about each customer.
Analysis of sales data
- Analysis of sales by several factors, including client, outlet, and salesperson, should be possible.
- You may keep track of seasonal sales changes, find your most lucrative clients, and more.
Keep an eye on your stock position
- Stock level changes ought to be automatically detected.
- To acquire data on quickly changing stock, you might need additional devices.
- For instance, you might want to link your accounting software to POS (or “point of sale” terminals).
- The quantity of money held in your warehouse can be reduced by streamlining your inventory with accurate, detailed stock level information.
Forecasting revenue and expenses should be made simpler by accounting software.
You can compare actual performance to these forecasts to see how they compare. As a result, you can pinpoint the situations and reasons why your performance was better (or worse) than anticipated.
Create budgets that reflect the expected sales, expenses, and profits
- Rent and salary should be recurring expenses that the programme can manage. If more budgeting or forecasting functionality is required, take it into consideration.
- You may determine the cost of completing your orders and anticipate sales levels using previous experience.
- Create an anticipated “standard cost” for various things, then compare actual costs to it.
Create cash flow projections
- The forecasts outline when and how much money you anticipate to arrive.
- These forecasts will provide you the information you need to spot any gaps and fill them.
Use “what if” scenarios
- You can notice the effects, for instance, if your sales projections prove to be overly optimistic.
If the software has limited capabilities, add graphics to make the information more understandable
- Instead, export the data into a spreadsheet and utilise that to create the desired charts.
Accounting software makes it simpler to evaluate both the general health of your company and the performance of its various components.
Compare results to the budget or to earlier comparable periods
- Create a system that enables you to keep an eye on each particular area.
- You’ll be able to locate trouble areas and determine what exactly went wrong with subpar performance. For instance, if your sales fall short of expectations, you might be able to link it to a marketing underinvestment.
- You ought to be able to spot issues earlier and take action to address them.
Determine each department’s actual performance
- You should be able to segment your costs by departments, items, and people using the software. You may calculate how much money you make from each activity by comparing expenditures and income.
- You can allocate expenses to various items, services, or projects to calculate their actual costs using more sophisticated tools.
- Create a key performance indicator “dashboard”.
- The most crucial data is rapidly highlighted on the dashboard, which is updated as soon as new transactions are submitted. If more specific information is required, you can drill down.
- Dashboards can graphically illustrate your results, which makes it simpler to understand, especially for people who struggle with maths.
- You can make the dashboard accessible throughout your organisation so that every employee is aware of how the company is doing.
Accounts for managing production
- You may determine how well your business is doing in relation to goals by looking at its management accounts on a monthly basis. Some businesses might desire to make them more frequently.
- Keep track of your cash flow and profitability. Ensure that non-cash elements like prepayments and depreciation are handled properly.
- Think about segmenting the data by division, product, or service.
- The accounting should reflect the most recent period as well as the overall picture for the year.
- You can evaluate each department’s performance and create a “profit and loss” account that summarises overall performance.
Budgets and predictions are simple to update
- You can adjust your year forecast based on the performance as of late.
Overload with information
Accounting software can generate thorough reports that cover every aspect of your company. Consider your use and interpretation of this information very carefully.
Information overload can be a concern with so much data
- Keep your attention on the main goals of your company.
- Avoid drawing conclusions too quickly. A lower-than-expected profit, for instance, could have a number of explanations.
Make sure you appropriately evaluate data and gauge the impact of adjustments
- For instance, avoid making numerous significant marketing adjustments all at once. If you do, it could be challenging to understand how each change will affect you.
- Even significant adjustments can take some time to have an influence on sales performance.
You might need to adjust how you operate if you’re utilising software for the first time or are significantly upgrading your PC.
To set up and operate a system, assistance may be required
- It might be simpler to prepare figures if your system is compatible with your accountant’s. For ease in putting up year-end data, you might choose to use the one your accountant uses. Do this only if you are certain that it satisfies your personal standards as well.
- Typically, the start of a new accounting period is the ideal moment to implement a new system. As long as you enter the correct starting numbers, you can switch at any time.
- You must choose who has access to the system and how its security will be upheld.
It takes time to master a new system
- Give the personnel enough time to become comfortable and confident using the system. The cost of trial and error might be high.
- Make sure you and your staff have access to the necessary assistance and training.
- Consider how much training you will require. Levels of training will vary depending on the personnel.
For expanding and mid-sized enterprises, we recommend Sage Intacct is a robust and effective, multi-award-winning Cloud accounting solution. Sage Intacct prides itself on its cutting-edge features, strong foundation, and flexible connectivity connections. It offers best in class financial accounting skills, including AI and automation tools. Sage Intacct, which was developed on a cloud-based platform, manages more than 50 billion financial records and 1 billion API calls each month.
Who we are
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If you would like to know more about how Itas can help your business with Sage implementation and improve purchasing control, you can get in touch at email@example.com, call us on 01824 780000 or contact us via our website at https://itassolutions.co.uk.