The Why Behind Accounting Software

Do you really need to have accounting software in place to effectively manage your business finances and operations?

Depending on who you direct this question to, the answer will surely vary. Accounting software is quite a fresh subject given that the internet itself is also new in comparison to the concept of money and managing it. So the question still remains, do you need it to manage effectively?

Major software providers like Intuit, Xero, and FreshBooks launched their accounting software products in the late 1990s and early 2000s, marking a significant evolution in the way businesses managed their finances. So what was done before this technological advancement? Managing finances prior to the introduction of innovative software relied heavily on manual ledgers, the retention of purchasing documents, bills, and any materials tied to financial activities related to the business. Calculations were executed solely by hand, and audits were conducted based on the physical hard copy documents and spreadsheets that had been printed out, making the process more time consuming and prone to human error.

The efficiency of accounting softwares such as Xero and QuickBooks is quite easy to illustrate in comparison to traditional accounting methods that were prevalent before their time. Features such as bank feed connections, automated suggested bill matching, and valuable assistance with the formation of a Chart of Accounts, to name just a few, are merely the tip of the iceberg when it comes to demonstrating how utilizing accounting software can promote efficiency for your business operations.

Having accounting softwares in place can create a significant paper trail that can assist in troubleshooting, auditing and tax filing. It is easier to troubleshoot issues when the information is maintained in a centralized location. More often than not, these softwares will also have something called an Audit Log that is a report populated of all transactions edited, deleted or created by any licensed individual that has access to your company’s information.

The overall cost for having something like QuickBooks in place is designed to be affordable. Most if not all providers have tiers to different levels of offerings to cater to smaller businesses or those with more intricate internal processes. When partnering with professionals that are certified with the software providers such as QuickBooks ProAdvisors and Xero Affiliates, you may be eligible to receive additional discounts and benefits. MikaesBooks is certified with QuickBooks Online and Payroll products. Schedule your free consultation here today to learn more on how we can assist!

This blog is for educational purposes only. Mikaesbooks is not a tax advisor or legal professional. Seek an Enrolled Agent, EA or a Certified Public Accountant, CPA, or other tax professional for more information.