How Does Your Accounting System Affect Your Operations?

Accounting systems are an important ingredient to a business’s success. When was the last time you talked about accounting software?

Every business is different and has a unique set of financial responsibilities, so it’s important to determine early in the process what matters most to you. What do you really need in accounting software? Most likely, you will list some of the following features:

• Low cost 
• Inventory management
• Asset management
• Time tracking
• Bank and credit card synching
• Retail integration
• Sales and payroll tax support
• Financial statement reporting (balance sheet, income statement, cash flow)
• Scalability

Having the right accounting software can provide you with the resources you need to streamline your operations, so let’s look at ways you can select the accounting software that’s right for your business.

Synching with Other Technology

You likely uses multiple platforms to operate your business. For example, if you are a retailer, you may use different software to process payments, manage inventory, and track the time of your hourly workers. If you have an accounting system that syncs with these other platforms, you can automatically transmit data into your general ledger. This automation saves time and reduces human error that could occur if you were to manually transcribe data.

Reporting Capabilities

What type of financial reporting would best suit your business model? Having an accounting software that provides a full suite of reporting tools can help you make better business decisions.

Business decisions should be based on data, so you’ll want to steer toward an accounting system that can produce accurate and up-to-date financial information. If you only receive reports once per quarter, that information is too dated to be useful in making operational decisions. You should have the ability to run reports in real time, upon request. As a business owner you will then have a real sense of the inner workings of your business and have the ability to track trends, manage cash flow, budget, and forecast.

EXAMPLE 1: Reporting Needs for Retailers

Retailers will need an accounting system that can produce the reports necessary to file sales tax returns. If their business is selling in multiple states, it has become increasingly important for businesses to monitor nexus and keep track of sales tax obligations.

EXAMPLE 2: Reporting Needs for Employers

If you are an employer, you may recommend an accounting system that can generate accurate payroll data for payroll reports. These reports can help you complete payroll tax filings, track overtime hours, measure vacation and sick leave, and produce retirement plan reports.

EXAMPLE 3: Reporting Needs for Car Dealerships

If you have a lot of inventory to track, you will want an accounting system that can produce detailed reports. Consider the needs of car dealerships. Each item of inventory is unique. If the owner downloads an inventory aging schedule, they will want to know which specific vehicles remain on the lot, not just a summary of the value that remains unsold.

Cloud-Based or On-Premises Capabilities

Accounting software can either be stored on your local network or it can be stored in the cloud. While cloud software isn’t necessary, it can be a huge benefit to you. Why?

• You and your colleagues can access the system from anywhere with internet access, at any time.
• Cloud-based software offers heightened security measures to send, retrieve, and store data by using encryption to rewrite the information into a secure code.
• Cloud software is always kept up to date. You won’t need to buy new versions of your software or question whether you have the most recent version of the application.
• If you hold or transact with sensitive data, such as in the healthcare or professional services industries, most cloud-based software provides data storage services that adhere to strict security and compliance measures to protect confidential information.

As a bonus, if you use cloud-based software, you will benefit. You can pull up your financial data if you have questions, and come tax planning season, you can plug those numbers directly into Corvee’s tax planning software to optimize tax strategies.

Grouping Line Items

Your accounting software should have the power to group line items differently based on internal and external reporting methods. Oftentimes, you will need to group line items a certain way for GAAP-based reporting but a completely separate way for tax reporting. At minimum, your software should be able to easily pivot between book and tax.

Industry-Specific or General Accounting Software

Industry-specific accounting software will have advanced capabilities that could appeal to you, allowing you to track and report on items essential to your unique business. Unfortunately, some niche software programs have a narrower range of integration. In fact, choosing an industry-specific software may reduce automation, thereby increasing cost by requiring you to purchase intermediate tools to convert and export data.

Since general accounting software for accountants has a broad user base, most have been built to sync with other popular platforms and streamline data across multiple systems. Many have even added modules and features over time that serve common industries. Depending on your industry and its needs, it may be worth the effort to reach out to similar businesses and ask for feedback on your chosen accounting software.

Next Steps

As you begin the process of sifting through the sea of options, consider what features your industry may require, the system’s accessibility, how user-friendly it is, and whether cost and scalability weigh into your decision making. Similar to Corvee’s tax planning software, you can help make your accounting easier, faster, and more accurate with the right accounting software.