Common Mistakes to Avoid When Buying Accounting Software

It is not anymore uncommon for business owners to adopt the use of accounting software to make the business’s transactions easier, more free-flowing, and hassle-free. Its benefits are insurmountable. However, they are also being warned to not commit common accounting software mistakes.

Of the many accounting mistakes that owners commit, there is one that stands out among others. According to the Executive Vice-President of K2e.com, Randolph Johnston, this mistake is the decision of business owners to skip training their staff fully on the use of the software for accounting.


"This is an item that should be budgeted and not cut. Even though technology vendors will portray software as being easy to use, set up and integrate - it rarely is," said Mr. Johnston.

And so here is a rundown of these mistakes and the things that can be done to avoid them.

1. Many business owners immediately jump into researching for the best accounting software small business they can find without actually trying to assess if the company ever needs one. As a result, the needs of the business are not being delivered. So, it is best that business must first try to understand if there is ever a need for such software.

2. Business owners get to excited to get software for accounting on line in order to get rid of headaches and much paperwork. In the end, they are not able to get the software that is scalable. Scalable means that the software can cope to the changes and demands of the business’s accounting even if it triples or doubles its size. So before, getting that software, make sure this feature is present.

3. Business owners also neglect the fact that they need software that can be integrated with other software applications. This is necessary especially when there are applications which are necessary for the operations of the business.

These mistakes have to be taken into consideration so as not to commit them. Accounting is a very crucial aspect of a business to keep itself afloat in these times’ tough and fierce competition.

Accounting Software Inflates Profits and Close Loopholes

Now, more than ever, there is a need to adopt accounting software by every business. This is after reports revealed that banks are actually making use of loopholes in accounting regulations to their advantage where they could alter results like profit levels and staff bonuses.

The Adam Smith Institute says banks utilize complex financial products that may conclude a profit value that is different from the actual one.

The blame can be put on the International Financial Reporting Standards (IFRS) according to Gordon Kerr, a former banker who authored the report. The IFRS allows banks to include in their current profits certain expected future income.


"The accounting regulation system needs radical reform so that banks are not encouraged to invest in risky assets to make themselves seem more profitable than they really are. Honest balance sheets are the cornerstone of a healthy financial system – right now, we don't have the transparency we desperately need to avoid a repeat of 2008," he said.

An example of this action is when banks buy CDS or Credit Default Swap. The CDS allows the banks to declare cash flow certainty despite the possibly of uncertainty.

"Accurate accounting is at the root of the legal and scrutiny framework; without accurate accounts basic laws are incapable of enforcement. As this report shows, banks have been using loopholes in these rules to inflate their accounts and create false profits to pay for bonuses and short-term gains for their shareholders," said Kerr.

So in order to get accurate and fair results, businesses must use software for bookkeeping or online accounting software. Accounting software business will definitely help avoid what had recently happened to Macomb County. It incurred a financial error that resulted to a $1.7 million hole to its budget. From that experience, there is truly a need for accounting software.

EU shake up Audit Market: Accounting Software users' Revamp Operations

The £600 million audit market is now under scrutiny as it faces a major shake-up.

As authorities attempt to make improvements on standards across the board, some of the audit industry's largest users of software for accounting may soon be asked to reorganize their operations.

With city firms, large companies and smaller accountants who have been using accounting software for small businesses have been expressing their concerns for several years of the "Big Four" - PwC, KPMG, Deloitte, Ernst & Young – and their stranglehold on one of the most important cogs of corporate British life. Michael Barnier, internal market commissioner at the European Union has told the “Big Four’ that splitting their European bodies could be the key to an upturn in quality and opening up of the market.


EU market commissioner Barnier will publish a draft law which, if approved, could result in the splitting of the “oligopolistic” networks of KPMG, PwC, Ernst & Young and Deloitte which check the books of nearly all blue chips in the world.

It is thought that the separation of the audit and consulting arms of each business may bring about an improvement in standards when it comes to working with accounts.

The proposal of Minister Barnier came soon after his plan of forcing the large firms to share their workload with smaller companies was shelved.

Rivals, such as Grant Thornton, BDO, Mazars, RSM and Rodl & Partner, have welcomed Barnier's aim of opening up the market.

Meanwhile, Barnier’s other idea of making it compulsory for organizations to change their auditor every six years has also been backed.

However, the Office of Fair Trading suggestion that the present state of affairs is damaging the economy was noted to be a serious accusation at a time when Britain is in danger of slipping back into recession.

Jean Stephens, chief executive of RSM International, even told newspaper that it is important that Mr Barnier does not allow his plans for improvements to the accounting market to be "watered down".

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Accounting Software Allow Businesses to Save Money

Accounting is very important to every business. And in today’s economic instability that is brought about by the global economic crisis, adopting the use of accounting software for businesses is deemed very advantageous.

According to Terry Forsey, a software sales and marketing coach, the software for accounting will make other services redundant. For one, the services of an external accountant will no longer be needed as often as before. Besides that, a professional bookkeeper will also be less needed when the accounting software is used.

"If you're dealing with a company who pays your invoices on 30 days from date of receipt, you can email them, which means you can get your invoices out an awful lot quicker,” added Forsey. However, it is advised that the employees to operate the software should have to undergo rigid training.

Here are other advantages of using Accounting Software that can make businesses save money:

1. Payroll processing

Hiring a payroll master can be tough especially for a small business. But by using the accounting software for businesses, time sheet information is entered together with the rate of pay. It is the software that does all the computations. Deductions are automatically applied.

2. Easy transaction entry

The slightest mistake in entering data can be disastrous. And yes, this can happen even to employees who are being extremely careful at data entry. But with the newest accounting software, incorrect data entry can be avoided as these already have safeguards that ensure that only the correct data are entered. Debit and credit transactions are checked and made sure to be accurate.

3. Accounts payable

Paying suppliers has never been this easy. With the software for accounting, all payables and collectibles are easier to track because the software has the ability to organize data and information. Therefore, a company is able to save because all charges and fees brought about by overdue payments are avoided.

4. Tax and financial reports

Tax statements are very complicated. With the software for accounting, this can be done fast, accurately, and timely.

5. Ease of access

Accounting software are online applications. This means that anyone can work on accounting even at home, in the mall, or wherever the need arises. With just a laptop computer, internet connection, and account password, work can be completed in no time.

Source: Codestone.net

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Six Reasons Why Businesses Should Have an Accounting Software

Businesses should have accounting software. There are so many reasons out there for businesses to have accounting software in order to improve their performance. Terry Forsey, Software Sales and Marketing Coach and owner of Forsey Consulting, elaborates about the benefits of such solution.

There has been a mention of 6 top reasons. The first of which is that it gives the ability to complete bookkeeping tasks much quicker and more accurately.

This will help improve customer service as questions from clients are being responded to much more quickly, according to Forsey.

Forsey also noted that businesses will have accuracy, and then the ability to automate or semi-automate a number of things, "including invoice dispatch bank returns, reconciliations and so on."

Forsey also went on to say that using accounting software puts the companies to a position to make superior financial decisions as compared to those who do not.

After the Executive Vice President at Technology Education firm K2e.com, Randolph Johnston, said the software is perfect for small and large businesses, it is Forsey who is the latest industry chief to praise the solution.

Terry Forsey

Terry Forsey has a Masters Degree in Computer Science, yet has spent over 30 years working as a Sales & Marketing focused Director within the Software Industry. His experience has been with Small and Medium sized software companies where he has repeatedly wrestled with the challenges of growth and survived three previous recessions!

News Source: Codestone.net »

Accounting Software Can Save Businesses From the Threats of Insolvency

It is clear that investing in high quality accounting software packages is an efficient way to keep a business on the right track and to keep off threats brought about by insolvency.

This came after AAP’s report that there was a 21.1 per cent increase in terms of the number of Australian firms that hit financial meltdown in June.

It is expected that the number will rise further in the coming months according to Taylor Woodings, the accounting firm that did the research.

“Most of them are where there's been a problem for a number of years. It's not indicative of the current economic climate,” said Michael Ryan, managing partner of the firm. It is seen that such problems can build up over time.

By utilizing an accounting software such as SAP Business One, financial issues may be tackled at its earliest stage and may be prevented from becoming a major problem.

This thought has been strengthened by Kevin Wright who is a partner at chartered accountant, Leftley Rowe, saying that small businesses can benefit from using accounting software.

Source: Can accounting software help to stave off the threat of insolvency? | Codestone »

Accounting Software: Essential For Every Business

Accounting Software plays a vital role in business owner’s ability to stay on top of their companies finances.

The Planning Shop President, Rhonda Abrams, shared with USA Today that managing money should be viewed by entrepreneurs as just as important as making profits. She emphasized that the use of accounting software will assist greatly in achieving this. Accounting systems keep track of accounting records far better and much easier than manual methods.

Accounting software also allows businesses to examine trends and make projections. Abrams also advised the importance that bills and invoices are dealt with on time, to keep a reserve of money from major deals and to limit the credit offered to individual clients.

Ms Abrams added that, “A few simple steps and you'll be on your way to an excellent credit rating, a great relationship with a bank and a good night's sleep.”

It can also be noted that last month, accountancy expert and author, Karla Dennis, told Entrepreneur Magazine that accounting software helps eliminate avoidable tax errors.

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Accounting Software Helps Prevent Tax Errors

Every business can bring about happiness, contentment, and income for its owner. When it is managed effectively, the returns can be very rewarding. These benefits do not only go to the owners. In addition the businesses provide income to the government in the form of taxes and to employees in the form of wages.

Businesses pay their taxes annually. This task is taken care of by the bookkeeper and the accountant. These two employees make sure that the taxes remitted by the company are accurate and remitted on time. If not, the company acquires losses from miscalculations or they get penalized by the government for incorrect or late reporting.

These circumstances should be avoided by companies. This can be achieved by using up to date accounting software. According to Karla Dennis, accountancy expert and author, in her article submitted to the Entrepreneur Magazine, many business owners and accountants are committing avoidable mistakes in bookkeeping. She sees that the reason for such mistakes is that people usually rely on their memories in making calculations of expenses.

"When tax season arrives, you might find yourself estimating your expenses only to arrive at a number that is either far above or below the reality," she added.

Her suggestion to business owners is to use an accounting software package that is suited to the nature of their business. The software must meet the requirements and needs of a particular company. Another thing that one can do is to hire the most effective, experienced and efficient accountant and bookkeeper. This is because they are the ones who are going to best operate the accounting software and overall process.

Investing in accounting software is a necessary part of running a business. Since starting the business already requires a significant amount of time and money, the additional cost is relatively small to ensure accurate accounting and informed decision making.

News Source: CodeStone.net »

A Warning for Companies About Their Accounting Software

Businesses are a good investment. It allows the owner to earn money and maintain control of their time. Businesses help the economy by employing staff and paying taxes. However, for this business to flourish it must be properly managed. This is best achieved by using a suitable accounting software package to help the accountant and bookkeeper in monitoring the company’s transactions and performance.

There are many accounting software packages available, many of which can be found on the internet. The choices and prices are so varied that choosing the correct package for your business can be overwhelming. However, selecting the correct package is very important as there are risks associated with using the wrong software.

Accounting software that is outdated may pose a risk to a company. It is important that accounting software is regularly updated to reflect the changing business and taxation landscape. This was according to accounting expert, Rhys Roberts. He added that outdated software lacks functionality and security measures which may expose a company to various risks. Furthermore, inappropriate accounting software can develop performance issues that may lead to errors and further risks.

"Using the wrong accounting software can reduce the efficiency of your business, increase your operating costs and make controlling your operations more difficult," Roberts said.

Gwen Morgan, business author, told Entrepreneur Magazine that choosing the most suitable accounting software is one of the most important investments any small business can have these days.

Investing in accounting software is just a one-time expense. Why take the risk when you can be secured?

News Source: CodeStone.net »