A computerized accounting system has great potential to increase productivity, streamline workflow, reduce data redundancy and error reconciliation, and help with financial management for large and small businesses. There are many different accounting options to choose from, including Microsoft Money, Microsoft Dynamics, Oracle, QuickBooks, Sage, and Xero.
Software vs. Web Based
Choose between downloadable or installable software that lives on your desktop computer and web-based software that you access remotely. Neither option is better than the other. They both have advantages. With a web-based offering, you receive maintenance and upgrades automatically, as the software provider performs them for you. You can also purchase only the accounting modules that you need, then upgrade your plan to incorporate new functions at the moment of need. Because you access your data via the web, you can view your financial data any time. However, you’ll also pay more as you use more server space and functionalities, and this can add up fast. With software, you have to perform maintenance and troubleshooting, but you retain the ability to maintain sensitive data storage in-house.
Computerized Accounting System Components
A good computerized accounting system or CAS will have a clean, easy-to-use interface. From this interface, you should be able to enter data, export data into other formats, and perform data validation operations. On the back end, databases will drive your CAS, responding to queries about the information stored therein. Your consultant should be able to install the CAS. While you don’t need a large IT staff to install your computerized accounting system and get started, it helps if you need to troubleshoot operations or need help performing a specific function. Your CAS should have elements including:
- Accounts Payable : Allows you to manage invoices and bills that you must pay.
- Accounts Receivable : Allows you to manage payments, billing, and income.
- Payroll : Handles employee payroll within the accounting system.
- Benefits Management : Allows for employee budget management, accrued vacation time reporting, and other budget reporting.
- Budgeting : Lets you create and manage a budget.
- Assets : Lets you manage fixed and fluid assets, calculate depreciation, and perform other asset management.
- Reporting : Integrates your data with existing reporting standards, so that you can comply with regulations that affect your business.
- Project Reporting : Lets you manage the assets and workflow for multiple projects at one time.
- Supply Chain Management : Allows you to track inventory, suppliers, goods pricing, and other supply side services.
Switching to a CAS
Switching to a CAS can feel overwhelming. To get started on the right foot, review your finances before the migration and reconcile any errors. You may wish to hire an accountant or financial manager to review your documents for you. Once you have everything in order, install your chosen CAS or purchase a web-based system. Upload your existing data, or enter data by hand if you need to. As you add the data, reconcile it with the existing accounting to make sure that you don’t introduce mistakes into the work. Transition to the new system, but continue to use the old system for a while until you feel comfortable with the new system.
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