Running and wholesome and rising group isn’t straightforward. There are many shifting components that contribute to enterprise well being and they should work in unison. Accounting, sadly, is usually seen as a mandatory evil reasonably than a contributor to progress. But the reality is, strong accounting gives you with the information you have to run the enterprise, and good accounting software program makes that knowledge extra well timed, extra correct, and extra actionable.
The Evolution of Accounting Software
In the previous, all the pieces within the accounting division was executed on paper (with particular sleeve garters to maintain ink off their cuffs, when you return far sufficient). Paper accounting was very time-consuming and vulnerable to easy errors, with no approach to verify accuracy however to skim each quantity and run handbook calculations.
In the 80s, paper gave approach to Excel. With spreadsheets, accountants might do the work a lot quicker, even utilizing formulation and macros to do complicated calculations and confirm the accuracy of numbers within the sheet. And whereas Excel was a lifesaver (and lots of accountants nonetheless use it for some issues) it nonetheless didn’t supply the utility accounting groups wanted. Today’s account software program permits accountants to do rather more than crunch numbers in spreadsheets. It permits them to deal with the numbers quicker and visualize and venture what these numbers signify, making the accounting crew a essential and strategic a part of the group.
Core Accounting Software
Accounting software program is available in two main classes: core accounting programs and specialised software program instruments. Foundation programs additionally are available in two classes: accounting-specific software program and ERP programs.
Smaller organizations (or these with easy constructions) typically use an accounting-specific device like QuickBooks or Xero. These choices offer you all the pieces you’ll want to handle your chart of accounts and might sync with apps designed for particular functions like AR, AP, or stock administration. ERP programs like NetSuite and Sage Intacct have modules that will help you handle all points of your enterprise, together with accounting, stock and provide chain administration, HR, and CRM. For a bigger or extra complicated enterprise, ERPs aid you maintain all the pieces related and accessible.
Specialized Accounting Software
While accounting software program and ERPs cowl the fundamentals for any enterprise, each firm is exclusive and must handle particular duties. Specialized accounting software program connects to your core system and helps you clear up a selected drawback. Some examples of specialised software program are FloQast for month-to-month shut administration, Planful for monetary planning and evaluation, and Workiva for reporting. Depending on the dimensions of your enterprise, the trade, and whether or not you’re public or privately held, you’ll want totally different instruments to fulfill your wants. Specialized software program permits you to customise your tech stack to suit your enterprise.
How Accounting Software Helps Improve Performance and Grow Revenue
So, now that you’ve the fashionable accounting software program that fits your particular enterprise, how does it aid you develop that enterprise and run it higher? Accounting is like an ongoing bodily examination, and the information your accounting processes present are like important indicators. To make worthwhile enterprise selections, you want entry to the appropriate numbers on the proper time, and that’s what accounting software program gives.
Here are three examples of how accounting software program assist to enhance organizational efficiency:
Making KPIs Easy to Track
With the appropriate accounting software program, you’ll be able to simply customise stories and dashboards to indicate you precisely the important thing efficiency indicators you’ll want to observe in your enterprise. These stories could be set to run mechanically and might simply be shared and despatched to key stakeholders who want quick access to that info while not having to dig into the books to search out it. This is essential for good determination making and making it straightforward makes it more likely the data will truly be used.
Identifying Errors Faster
Monthly duties like closing the books and reconciling accounts can take days, however shut management software program can shorten the method significantly, permitting the accounting crew to give attention to extra strategic issues. By making certain that accounts are reconciled each single month, you’ll catch errors quicker so you’ll be able to appropriate them and all the time work with correct knowledge.
Smarter Forecasting
Today’s accounting software program makes use of AI to supercharge the forecasting course of. You can simply create correct forecasts of each your income and money circulation based mostly on historic knowledge, which makes it a lot simpler to price range and plan going ahead. Once you might have a price range and a plan, your software program may also make it a lot simpler to stay to it, by supplying you with a ton of visibility in your precise spending and alerting you to any areas which can be going over price range.
Trends for why corporations want Close Management in 2023
1. In a post-pandemic world, distant work is right here to remain. When your entire accounting crew was collectively in the identical location for at the very least 40 hours / week, managing the shut course of the old school means had an opportunity to work. A shared spreadsheet, common huddles, yelling over the cubicle wall, or looking somebody down within the break room was inefficient, nevertheless it was acquainted and felt like collaboration, nonetheless inefficient.
In 2022 and past, bodily presence amongst crew members is far much less constant, everyone seems to be distracted on Zoom, the amount of electronic mail and noise on Slack is overwhelming, yelling over the wall considerations the neighbors, and looking somebody down at their home actually freaks out your colleagues. In quick, the previous strategies are not possible. As a end result, strategic, forward-thinking corporations will present the instruments mandatory for the accounting crew to collaborate successfully to speed up the month-to-month shut course of.
2. In a decent labor market, worker satisfaction and engagement are further essential. Employee satisfaction and engagement are all the time essential, however in an atmosphere of accelerating employment choices, it’s essential that corporations do all that they will to offer significant and strategic work. The extra staff assume, “There has got to be a better way!”, in the middle of their common work day, the extra they’ll be inclined to pair that thought with, “There has got to be a better company to work for where I can make good use of my time, learn valuable new skills, and add more value to a worthwhile cause.”
In reverse, the extra that staff see their employer investing strategically to raise their function and maximize their time, the much less doubtless they’re to seek for greener pastures. The greatest leaders will acknowledge that they’ll enhance their possibilities to retain their most valued staff not simply with aggressive wages and advantages, however by eliminating a handbook, soul-sucking, weekend-killing monthly-close course of.
3. In an unsure financial system, controlling what you’ll be able to is a superb begin. Things are getting loopy on the market – from world inflation to rising rates of interest to an unsure geopolitical local weather. And the flexibility for anyone firm to even affect these forms of challenges is one thing near absolute zero. That’s why it’s important for corporations to regulate what they will – implementing month-end shut automation expertise and accompanying procedures that promote compliance and belief. Committing to and delivering a immediate, environment friendly, and thorough month-to-month shut course of facilitates so many good issues:
a) Trust will increase in each route as monetary outcomes are well timed and precisely launched
b) The accounting division is freed as much as reply not simply the “what”, however to investigate the extra essential “why” questions
c) Executives and key stakeholders are in a position to make higher, quicker, data-driven selections to safe a worthwhile future for the group
d) Auditors are joyful and environment friendly as they’ve the data they want at their fingertips
Ending Balance
To get probably the most out of your accounting division, corporations could be smart to convey their controller or accounting supervisor into key strategic conferences to debate what knowledge is required and the right way to get it into the fingers of decision-makers at simply the appropriate time.
As every new era of accounting software program will get smarter, accounting groups can play an even bigger function in impacting organizational efficiency and profitability. The quicker and extra precisely an accounting crew can generate knowledge, the extra knowledgeable firm selections change into, which results in higher monetary outcomes for your entire group.
By Mike Whitmire
Mike Whitmire, CPA*, is CEO and Co-founder of FloQast, a supplier of accounting workflow automation software program created by accountants for accountants to assist them work smarter, not more durable. Before founding FloQast, Mike started his profession in audit at Ernst & Young, specializing in media and leisure, earlier than becoming a member of the accounting and finance crew at Cornerstone OnDemand as the corporate ready for its IPO. During his time at Cornerstone OnDemand, Mike first developed the concept for what could be FloQast.
In July 2021, FloQast raised $110 million Series D at a $1.2 billion valuation. Today, it has greater than 400 staff worldwide. In January, FloQast launched PBC, a comedy collection written and developed by FloQast staff, together with Mike, based mostly loosely on his experiences as an auditor.
A proud Angeleno, Mike is an enormous Los Angeles Dodgers fan and an avid baseball card collector. He resides in LA along with his spouse and daughter.