Accounting was among the first ever disciplines to be aided by advanced counting machines, first with clay tablets and, starting in 1955, purpose-built electronic computer systems. The main reason for automating accounting is simple—counting large sums is tedious and time-consuming, regardless of how talented an accountant is. Most importantly, in the calculus of most business decisions, anything that’s tedious and time-consuming is also expensive.
This truth about accounting efficiency has not changed since the days of clay tablets. However, the continuous development of better and faster accounting technology has often resulted in the creation of datasets that were too big for any individual decision-maker to interpret. As a result, computerized accounting system products started to focus on transparency as well as efficiency.
Benefits of a More Transparent Computerized Accounting System
Increasing financial transparency within your organization is good business. More transparent financial data means decision-makers have access to timelier, better-contextualized information. More transparent accounting systems allow for smoother audits, improving your business’s legal compliance and reputation with investors. Transparency also protects your business from various malfeasance. In short, the more transparent your accounting system is, the more stable your business becomes.
Qualities of a Transparent Computerized Accounting System
1. Automation Capabilities
Above all, your computerized accounting solution must offer automation capabilities. As a general rule, every process requiring manual intervention results in a loss of transparency, as humans can make mistakes and be slow in delivering data. Older systems based on programs like Excel often require significant human input and training, resulting in a loss of data transparency. Setting up automations in modern accounting software is much easier.
2. Integration with Other Business Solutions
Many businesses use specialized automated systems for various operations. Choosing an accounting solution that seamlessly integrates with these systems reduces the need for manual data entry and facilitates better transparency.
Before selecting best accounting software, check if it easily integrates with existing software, particularly payroll, inventory management, and payment processing systems. Alternatively, upgrade multiple systems at once with an enterprise resource planning (ERP) solution that seamlessly handles various business operations out of the box.
3. Simple Yet Powerful Reporting and Analytics
Whether you go with a standalone accounting solution or a full-fledged ERP, choose a system that provides comprehensive, customizable, and easy-to-filter financial reports. These functions can help reduce the cognitive load needed to interpret data, allows and other key decision-makers to make thoughtful and accurate decisions.
4. Matches Specific Business Needs
Most accounting software will work well in most business setups. Depending on your business size and industry, you may have special accounting requirements best solved with a specific solution. Picking a “right-sized” solution out of the box can be an economical move, as you won’t have to pay for additional modifications after your purchase.
5. Scales with Expected Business Requirements
Modern accounting systems can easily grow with your business’s data requirements, especially if they’re cloud-based. Avoid onsite-only storage or put hard limits on user profile creation and data storage amounts.
6. User-Friendly
A user-friendly interface matters, especially if you and your team are not accounting experts. Intuitive features make it much easier to get the information you need, increasing the data transparency offered by your system.
7. Long-Term Vendor Support and Training
If you have a user-friendly accounting system, there may be times you’ll need vendor support, especially for security patches and understanding advanced features. Systems with support and training ensure the maximum utilization of your investment, resulting in better data visibility.
Make sure the support lasts as long as you use the system, and the vendor’s long-term assistance ensures your software stays compatible with future developments.
8. Help Your Business Meet Regulatory Compliance
The accounting system must comply with accounting standards and tax regulations relevant to your home country and regions you serve. Most modern systems can be modified to accommodate compliance, but it’s better to pick something with a ready-to-use modification process that’s already been tested by other organizations.
9. Positive Vendor and Product Reputation
Like any other solution, accounting software’s advertised features don’t necessarily match reality. To avoid committing to a service that may not be fully truthful, research the reputation of different solution vendors before shortlisting accounting solutions. Look at reviews from users in the same industry.
10. Cost-Effective
Evaluate the total cost of ownership, including initial setup, licensing fees, ongoing support, and potential training costs. Don’t be afraid to invest in solutions with long-term business benefits, even if they cost more.
Demand Data Transparency in Your Accounting System
Given that up-to-date accounting solutions offer similar performance, avoid getting bogged down in technical specifications. Focus on specific product benefits to enhance data transparency within your organization. Using that as your guiding principle, you’ll be well-positioned to choose an empowering and efficient solution.
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