Accounting Software: How it became a need in the business of MSMEs
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Accounting is a fundamental part of running a successful business, and accounting software for MSMEs — micro, small and medium-sized enterprises. Accounting software is one that cultivates under the same roof all systems and applications dedicated to managing and processing financial data. If consolidated well, it can be an essential part of your system and substantially improve all things finances inside your company from bookkeeping to tax accounting.
Let’s see how the use of accounting software keeps the business afloat-
Accounting software helps to increase efficiency as it has the ability to manage account receivables, accounts payables, and general ledger, among others. Accounting calculations are complex and tedious, which compels businesses to purchase this software and perform calculations accurately without the use of manpower. Accounting software also keeps your information in one place, making it simple to reference past transactions. You won’t waste time digging through paperwork or spreadsheets. Considering these factors, businesses find it necessary to deploy accounting software.
Manages Cash Flow
One of the biggest problems the business can face is cash flow issues. While sometimes that’s a result of the economic downturn, more often the culprit is poor planning or lack of a thorough, organized accounting process. Here, the use of accounting software can actually play an important role while bringing some considerable benefits. It helps business to gain new levels of insight into the cash flows and payment processes and also calculates everything for you, resulting in negligible finance errors. The accounting software takes care of tracking all the transactions with seamless scaling and implementation of new products and services.
Reduced Overall Costs
The benefits resulting from the speed and efficiency of accounting software often go hand-in-hand with a reduction of overall costs. The use of an accounting program allows each member of the accounting team to do more in a given time. Thus, in turn, reducing the accounting department's payroll and administration costs. The accounting software automate most of the core calculations and administrative procedures and thereby also take control of the revenue framework so that businesses will not be required to outsource finance management to an external expert.
Ease of Tax Filing
For MSMEs, especially, tax accounting can seem complicated. After all, there are so many types of taxes that keeping track of them can be hard. Today, the accounting systems are so comprehensive that they lay out every detail required to comply with taxation laws, for example, TDS compliance with Tally. They also comply with tax office rules through formatting invoices automatically, so you won’t face headaches during tax season.
If you have a micro, small or medium size business and need to take care of your invoices, you just need something that’s quick and simple to set up, and the accounting software will be here at your aid. Sending a digital invoice to your clients via email is expedient both for you and your clients. After receiving the invoices, clients can send their payments with only a few clicks which make collecting them faster and easier.
Security and Protection
Company's financial data is the most valuable information and must be prevented from falling into the wrong hands or getting lost. This is what accounting and finance systems do for their users. They prevent accounting from being jeopardized in any way, and keeping an extra copy in case you need to retrieve them. In most cases, you will get to build your internal security structure and decide who will have access to sensitive data.
Maintaining Customer Relationships
It’s impossible to refute the factor that accounting software have little to do with customer relationship management. The accounting systems work around efficient billing and invoicing, thus, preventing all sorts of delays and miscommunication. It makes companies' performance appear more professional and credible. With Accounting systems, one can convey any piece of information which is important or related to the product. Companies can wish the clients on their birthdays with the data stored in the systems and can also send reminders of outstanding dues, and on receipt of the same can also send the acknowledgment note to the clients. All these helps in building a strong customer relationship and make the business viable for the long run.
Today the prominence of accounting software is on an upswing. It is rapidly emerging in the market to assist MSMEs and other enterprises. These software solutions help businesses to make their accounting and other business processes easier, timesaving, precise and cost-effective.