Accounting Software For Medium Business – “Is accounting software worth the investment or should we just use Excel?” This is the most frequently asked question when opening a company. Most small and medium enterprises (SMEs) choose to start with Excel because accounting software is a little more expensive; however, this is only possible up to a certain point. If you want your company to grow, Excel is not a long term solution.
There are several reasons why using accounting software is better than using Excel, both in the short and long term. Let’s look at them.
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There is a common misconception among people that Excel is very easy to use due to the sheer number of people who use it. Because they are so widely used, most people misjudge their level of knowledge. Using Excel to manage company finances is much more complicated than simple calculations. This is on a par with knowledge of a programming language!
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The formulas used in Excel can be very complex, and the complexity is further increased by the need to enter the formulas manually, making them prone to human error. In addition, there are countless variables in the table. Mistakes are easier to make and harder to detect. No win situation!
Microsoft didn’t create these tables to store years of data. You might be wondering what kind of data I’m talking about, like how many times it’s been edited, or previous versions, because Excel doesn’t store historical data very well. As a result, Excel is more prone to fraud.
It is easy to change information and almost impossible to track who is making the changes. It is quite difficult to track who is responsible when there is no historical data. Companies have lost billions of dollars due to the inability to control and manage their spreadsheets. Imagine the impact of an employee who brings in $1,000 instead of $100,000. Worse, you won’t even know who did it!
It takes a lot of thought and planning to set up an Excel spreadsheet capable of managing your company’s finances. To get a working spreadsheet, you need to make sure all the formulas work, checkpoints to make sure there are no errors in the calculations, etc. e. From expense reports to invoices, it will take time to set everything up to meet your company’s financial needs.
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This is further exacerbated by the fact that you need to have a deep knowledge of Excel to take full advantage of the platform. Before you create a table, you need to know how the data will be used. Whether it’s report names, which cells to print, or even a timestamp; you need to make sure that they are all consistent, even when you create and import multiple tables into your workbook. In addition, reaching the required level of Excel proficiency will require training and learning, which is time consuming.
You may even find yourself in a situation where you are constantly changing and updating your information and spreadsheet.
As mentioned earlier, Excel is very manual. You will have to manually enter each transaction. And if you practice double-entry bookkeeping, this will mean that you will have to enter each transaction twice!
Being very manual also means that everything from expense reports to the Chart of Accounts requires you to enter data manually. This not only takes a lot of time, but also increases the risk of error.
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Using manual input makes Excel more prone to errors. One mistake can create a chain of effects.
As we mentioned earlier, there are companies that have paid a heavy price due to the lack of historical data. Simply cutting and pasting from one cell to another can take a heavy toll on your company’s reputation. One well-known example occurred in 2012, when a single cell error cost JPMorgan an estimated $2 billion in losses. This is because Excel calculations are based on the data you enter.
Since each income stream requires a spreadsheet to track their earnings, this results in a huge amount of data. You may experience performance issues when working with a huge amount of data, merging sheets, or including scripts. Attempting to split data into smaller groups may result in some data being lost or misplaced.
Also, Excel doesn’t integrate with other smaller applications to help your company run efficiently. You will need to manage your timesheets and inventory separately.
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Plans, forecasts, budgets and reports usually require the participation of different people from different departments to work together. This leads to repeated exchange of data and ideas.
Now, with the new work-from-home norm, email is the primary means of exchanging data stored in spreadsheets. Experience will tell you that this method of exchange is prone to duplication and erroneous data. It will be difficult to keep track of how similar files are sent back and forth, and chances are you will end up sending the wrong version!
Consolidating data from different files and summarizing it before sending it via e-mail, to a storage device, or to the public network also requires time to get permission from various approvers.
In addition, spreadsheet files often become highly personalized to the person who designed them. This makes it nearly impossible for another employee to take over without knowing the thought process behind the design, forcing them to start from scratch.
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Your company’s financial records are stored in one central location – the cloud. By automatically entering bank statements into the software, which reduces the amount of data entry and the number of potential errors.
As a result, you get the most up-to-date information, which allows your company to manage its finances more accurately and efficiently. Your company will also be able to instantly create all the necessary information and is always ready to share it.
Plus, you’ll be able to keep a clean audit trail with all the historical data your employees might need. This ensures that every business transaction is recorded and your data cannot be compromised. This is important because having a clear audit trail reassures your employees of the credibility of the organization.
Not only will you have all the historical information about your company at your fingertips, your company can also get any reports it may need with just a few clicks. Whether it’s real-time reports or budgets, it makes it easy to view and share data, making tasks like tax returns done efficiently and at your convenience.
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© 2020 All rights reserved. is an integrated cloud-based accounting and HR software solution developed by SMECEN, a subsidiary of ASME (Association of Small and Medium Enterprises) Enterprise Holdings Pte Ltd. We are often asked about the best accounting software for Australian companies. The standard consultant and the correct answer is always “it depends”. It depends on many things:
In fact, while the list of “it depends” questions can be very long, different answers still lead to the same recommended solutions over and over again.
This is especially true when your turnover is less than $3 million and you have fewer than 20 employees (most companies in Australia). Moreover, I would call you a mid-sized business, you will probably face the SMERP dilemma, you should read this and then you should come and talk to us at Value Adders to help you make decisions.
But if you are the majority of small and micro businesses and are interested in choosing the right software, read on.
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First of all: Most retail bookkeeping/accounting software available will do the job. Invoicing. Expenses. Projects. Estimates. Bank fodder…. There is a certain level of homogenization.
From an accounting standpoint, Dr is a debit and Cr is a credit, and realistically any of the ten most popular options will work for most small and micro businesses.
I know at this point some people will just think what is the cheapest? And I will always say that the lowest price is rarely the best, knowing that some people will not hear me and just look at the price, and at that moment:
The question then becomes, what is best for a given period of time, giving the least compromises and delivering a real return on investment?
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I’d always like to suggest that more bookkeepers and bookkeepers these days prefer Xero, followed by MYOB and QuickBooks Online.
If you’re an accountant or an industry-focused accountant (like creative or retail), they may prefer lesser-known products like Rounded or Freshbooks, but most will offer one of the BIG 3.
I must reiterate that I personally believe that the value of the preferences of the external accountant and the business systems accountant is inversely proportional to the size of the company.
Accounting software is often not a key operational tool these days. If you are in the retail or hospitality business, you need a point of sale system like Square, Vend, Kounta, or Hike.
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If you are an artisan and
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