Types of accounting software and how can they help you achieve accounting digitization
Accounting software makes the process of managing finances effortless and efficient. There are two main types of software:
- Cloud-based software - An accounting application hosted on the web can be accessed from anywhere with an internet connection.
- Desktop accounting solution - These programs are installed directly onto your device and function as a standalone application.
Cloud-based accounting software offers a myriad of benefits, such as improved communication between users, automatic synchronization across devices, no downtime for maintenance, simple accessibility for remote employees, and complete visibility of all the expenses within the company.
Despite that, many companies prefer the familiarity of desktop options (since they are often more powerful and customizable to the organization's needs). With offline installation, they don't need to build trust or engage another vendor - they need to choose the system and purchase a license.
When choosing an accounting solution that fits your organization's needs, assess how you run the business first.
The rule of thumb is that smaller firms are better off with cloud-based software subscriptions with lower entry barriers (accounting software solutions like Xero and QuickBooks). At the same time, large organizations prefer an enterprise-grade solution like NetSuite (cloud or desktop) customized for them.
Step-by-step guide on how to choose and implement accounting software
Once the company management approves your accounting digitization plan, you could use the following five steps to implement the updated systems in place:
- Evaluate your needs - First and foremost, assess your current company workflows, and determine the points of inefficiency. Ask yourself questions such as: Can a computer program perform this action? What kind of reporting/exporting functions must I have in place? Do I need integration with other applications?
Once you know what features are most important for your business, it’s time to look at different systems available today.
- Compare accounting software providers - Take some time to compare different systems to determine which offers the best value for money regarding features discovered in the previous step and relevant pricing plans available. You may also want to read online reviews on platforms like G2 to better understand the user experience before trying out the product.
- Set up your system - Once you’ve chosen a system that works best for your company’s needs, it’s time to set up the software on either a cloud platform or a desktop computer/laptop, depending on which type you decided on earlier. Ensure all employees have access to the system so everyone can always see vital financial metrics.
- Train employees - Finally, take some time to train all employees who will be using the new accounting system so they understand how it works and how they can use it most effectively in their daily operations. Most respectable software companies would offer a dedicated onboarding agent for such purposes. This ensures everyone is comfortable using the new system before switching entirely from manual processes or another existing system within your organization.
Now that we’ve established the benefits of accounting digitization and the steps you need to implement it, you might ask yourself: “Now that I have an accounting solution in place, how do I ditch my old manual workflows?”
How to effectively transition from manual accounting to a digital system
Transitioning from manual accounting to a digital strategy is no easy feat, but the benefits far outweigh the cost and effort. To ensure a successful transition, meet with an experienced IT consultant to develop a plan and understand how your new digital system will work with existing processes.
Once you have all the necessary information, implement the new system slowly and methodically so employees can become comfortable using it. When training, give employees time to learn before taking on additional tasks and provide continuous support throughout the learning process.
Furthermore, use backup systems and continual tests to ensure correct data entry during this transitional period. According to Zoho.com, the transition may take between a month (for smaller companies) to several quarters for bigger organizations, so make sure to plan the move ahead of time.
These steps can make transitioning from manual accounting to a digital system much smoother and more efficient.
Ready to get started with accounting digitization?
Now more than ever, businesses realize the value of digitizing their accounting processes. A modern accounting system will help you save time, reduce human error and make data more secure. To get started, determine which accounting processes can be automated with software within their organization.
Then, look for experienced accounting software professionals who can help you integrate their software with these systems. When executed correctly, digitizing accounting operations can unlock insights into cash flow management, profit modeling, and other financial functions to ensure long-term success.
Learn more about our accounting integrations. Or if you want to talk about easy expense management, receipt data capture, invoice payments, and more — book a demo today.