Part 1: Thinking about switching accounting software

Three things to know when choosing accounting software

In today’s environment it’s hard to not be aware of how rapidly technology changes. But it’s not just the latest smartphone that’s different. The last 10 years alone have seen the highest rate of development for software using the web—that includes accounting software. It’s important to understand as you begin your search that accounting technology is now governed by these three innovations: the Cloud, APIs, and automation.

The Cloud

All modern business IT is now being built and deployed “in the Cloud,” through the Software as a Service (SaaS) model. Basically, instead of using the software on a local computer or server, cloud-based accounting software is accessed through the internet on a remote server. This allows for increased accessibility and scalability, as well as automatic software updates and backups. Cloud accounting has made it possible for companies to make the best decisions possible at all times. The cloud also allows for your accounting solution to work with other cloud-based solutions.

API

Without Application Programming Interfaces—or “API’s”—integration and IT flexibility would be impossible. APIs literally enable different software to communicate with each other. Because of this, APIs are a critical component of cloud architecture. APIs provide “building blocks” for programs (also called applications or “apps”). They define functionalities while allowing programs to respond fluidly to requests, even independently of their out-of-the-box parameters. This means that the software can be flexible and heavily responsive to users without compromising the overarching IT structure. This becomes very important when you have software that needs to meet individual requirements and connect with a variety of different applications. A robust API helps solutions be both exceptionally flexible and connect more efficiently with other apps.

Automation

Click a button or schedule a routine, and a task—or several tasks—are completed automatically within the Accounting Core software. Automation is making accounting faster, more reliable, and less dependent on manual data entry than ever before. There are several types of automation available to make all your web-based solutions perform at a highly efficient rate and with reduced oversite. For accounting, this means less tedious bookkeeping and more data to help you grow.

Where are the boundaries for accounting in technology today?

Accounting begins when debits and credits are entered into the general ledger. Things like pricing, time tracking, and project management can use accounting data, but these are not accounting events if they don’t produce debits and credits in the general ledger. Only when you establish a transaction resulting in debits and credits do you create assets, liabilities, revenue, and expenses for which value must be recorded.

What is integrated accounting?

Many people confuse what constitutes pure accounting technology because these boundaries seem to blur with what are sold as accounting functions, but are actually not. When people think of Enterprise Resource Planning (ERP), they assume this is a comprehensive accounting system. But this isn’t the case, it’s actually a system combing operations and accounting.

Accounting software systems manage the processes of recording and managing the debits and credits created by business transactions. ERP is a business management system that hosts accounting alongside related operations in the same IT environment. ERPs house operations like order fulfillment, resource planning, and procurement—processes that may use accounting data but do not assign and manage the respective debits and credits. What’s further confusing is that ERPs often do house accounting functions. However, this doesn’t mean the only accounting systems available are ERPs or that ERPs are the best accounting solutions available. Today, accounting solutions exist as standalone accounting apps or on platforms.

No matter what solution you choose, you must clearly define accounting boundaries. Otherwise, critical data errors and disruptions will likely occur. These boundaries enable your accounting team to truly isolate and analyze the financial dimensions steering your business

What role does the accountant play in a company that has adopted modern accounting technology?

Today, the highly skilled accountant is the curator of your financial data. This role is growing with modern technology in how they gather and analyze data to help you lead and grow your business. Cloud-based accounting technology is the key component of this shift. As manual entries get eliminated with automation, accountants are freed to be value-added guides and consultants rather than just number crunchers. This is ultimately what you want.

Data is decisive, now more than ever, in such a fast-paced IT environment. In addition to overseeing transactions and consolidations, monitoring accounting data is important for maintaining your company’s financial health. When you look into accounting solutions, really consider how it will let your accountants collect, visualize, and analyze this data. Your system should help them do their job without skipping a beat. A few questions to ask are:

• Does the system provide an audit trail function to track specific information?
• Is the accounting system easy to use and adaptable to business needs?
• How efficient are accounting processes?
• What’s the level of automation capable of being achieved in the product?
• How flexible and robust are the reporting features?

Give your financial experts the system that helps them do their job to the peak of their ability and your company will immediately benefit. Improved workflow, expense management, and decision-making are just a few proven results.

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