What makes accounting software good? When does it become bad for a business?
Imperfectly Good & Perfectly Bad: Accounting Software’s, Previously, we expounded on the topic of why successful businesses or MSMEs need business management software. If you have yet to read our blog about it. Currently, we differentiate accounting software based on their classification and when they can be utilized better.
Before that, let us quickly know the definition of accounting software, or accounting management software to be exact. Accounting software, simply put, is a type of business software that integrates and automates the various financial accounting processes into one, thereby making it smarter while reducing errors. From the definition, accounting software needs to fulfill the purpose of automating accounting processes which in turn should positively affect an improvement in the business operation even on profitability Imperfectly Good & Perfectly Bad: Accounting Software’s.
Accordingly, accounting software should easily fit into and can be readily integrated into an MSME business’ systems of operation with an emphasis on MSME (as Large Enterprises use ERP and other specialized software that fits their nature of the operation). So, we ask the question what therefore makes accounting software good or otherwise?
For this discussion; let us consider classifying an accounting system based on the platforms it runs on and how it is accessed:
First, a Traditional Accounting System where the accounting system is fully installed to a workstation and can be part of a local network; Second, a Cloud-based Accounting System whereby using cloud-computing as its base, you can access it through mobile as an app; And third, Web-based Accounting System where the only way to use the software is through online (or internet access).
The Traditional Accounting System is ideally a full-featured integrated accounting system that is installed in a server or a workstation, depending on the network and the requirements. The license for this is permanent. You can also utilize cloud storage and can also customize it to an extent; it goes without saying that the forms can be fully customized. The traditional accounting system is the most secure among the accounting system as it is located behind a local area network or a VPN with firewalls in place.
The Cloud-based Accounting System, or App, is, to put it in layman’s terms, a cross between Traditional and Web-based, where the system can still access it even if offline but would have to be back online again for changes to take effect the system. The app has to be synced to the cloud to save the data and information; if not all recent data and information will not be captured by the server. You can also customize these forms too. The license is not permanent instead, it has a monthly recurring fee. It is usually offered as plans with respective inclusions.
Web-based Accounting System
It is similar to the Cloud-based one as it needs an internet connection. Albeit it demands always online connectivity and does need to be installed; it can be accessed through any web browser that meets its requirements. It is also the same with the cloud-based; as a monthly recurring fee is required to enjoy full access to the system. Needless to say, all data storage is also online; although there may be an option where you can download data/information in another file format.
The business or company’s main purpose in using an accounting system is to automate while integrating various accounting functions and to generate accurate, timely reports on demand. Then again, budget and access are issues that also need consideration when weighing options as that would be the best accounting system to be used. True, a traditional accounting system might at times encounter bugs and errors. But these bugs and errors are easily remedied through hotfixes and troubleshooting; if the developer has excellent after-sales technical support. While it is also true that cloud-based and web-based accounting systems seldom encounter bugs; you can easily access them anywhere and anytime just as long as one has a reliable internet connection. However, you cannot easily modify and/or customize it to fit specific processes or unique business requirements.
There seem to be times when what seems to be a perfect system does not match a business operation, and an imperfect, although excellent, system fits well a business operation. One just has to do their due diligence and choose which best fits their needs and requirements in the long run.
Please visit Active Systems Software, Inc. for more information about GROWING YOUR BUSINESS MORE.
