Wednesday, May 31, :30am - 11:30am

Transcription

1 Computerizing your Books (Rightsizing to your need) Wednesday, May 31, :30am - 11:30am In the computerizing session we will take a look at the factors you might want to consider in moving to a computerized accounting system or upgrading to a more sophisticated one.

2 Computerized Accounting

3 Accounting Systems A necessary function in any business Manual accounting system require posting business transactions to many ledgers and journals Computerized accounting systems allow the user to enter a transaction into the program once 3

4 Advantages & Disadvantages Advantages Save Money Save Time Disadvantages Data loss (power failures, viruses, hackers) Computer fraud Careless data entry 4

5 Advantages in more detail Automation Accuracy Data Access Reliability Scalable Speed Security Cost-effective Visuals 5

6 Session Summary Computerized Accounting: Helps Reduce Errors Helps Pros Work At A Quicker Pace Can Be Easily Customized Offers Secure and Accessible Data Storage Helps Reduce Expenses 6

7 Conclusion (Slide ½) Managing your business should not be taken lightly Good bookkeeping leads to good decisions Bad bookkeeping can cause major oversights Accounting software will make it easy for you Paper ledgers and excel spreadsheets will not help Software is simple to use and accessible from anywhere 7

8 Conclusion (slide 2/2) If you move in this direction, consider these factors Ease of use Integrate with other tools Connects to your bank Protects your data Customer Support Price 8

9 Advantages & Disadvantages of Computerized Accounting by Lisa Magloff Accounting is a crucial function for every business large or small. There are two types of accounting systems, manual and computerized. Where accounting functions were once performed by hand by trained professionals, today there is a wealth of accounting software available to help anyone keep the necessary accounting records. Whether you chose to use an accountant to perform accounting manually or use a computerized system depends upon your specific accounting needs. Advantages That Can Save Money Computerized accounting systems offer several advantages for small businesses. Systems for small and medium sized businesses can be purchased off the shelf at low cost. These programs allow managers to see the company's financial position in "real-time" and make adjustments to the business strategy as needed. Computerized systems can also provide instant reports on stock evaluation, profit and loss, customer accounts and payroll and sales analysis, again, allowing faster adjustments in your business strategy. In addition, transactions need to be input only once, and, with some training, anyone in the company can handle the inputting. Advantages That Can Save Time Using a computerized accounting system can save you time. Accounting software allows faster data entry than manual accounting, and allows documents such as invoices, purchase orders and payroll to be collated and printed quickly and accurately. Because of its efficiency and ease of use, computerized accounting systems also allow you to improve inventory control and payment collection, saving time and improving cash flow. Because computerized systems update some records automatically, your account records will always be up to date, saving time in updating. Disadvantages Using a computerized accounting system comes with its own set of problems, such as the need to protect against data loss through power failure or viruses, and the danger of hackers stealing data. Computer fraud is also a concern, and you need to instigate a system of controls for who has access to the information, particularly customer information. If there is a security breach and data is stolen, management can be held personally liable for the loss of data. You also need to make sure that the data has been correctly entered into the system, as a mistake in data entry can throw off a whole set of data. Source (with thanks to Lisa): Page 1 of 1

10 Differences between Manual & Computerized Accounting Systems by Sheila Shanker (excerpt) The accounting principles and concepts are the same, with differences lying in the mechanics of the process. Speed The main difference between manual and computerized systems is speed. Accounting software processes data and creates reports much faster than manual systems. Calculations are done automatically in software programs, minimizing errors and increasing efficiency. Once data is input, you can create reports literally by pressing a button in a computerized system. Cost Another difference between manual and computerized systems is cost. Manual accounting with paper and pencil is much cheaper than a computerized system, which requires a machine and software. Other expenses associated with accounting software include training and program maintenance. Expenses can add up fast with costs for printers, paper, ink and other supplies. Backup A third difference between manual and computerized systems is the ease of backup of a computerized system. All transactions can be saved and backed up, in case of fire or other mishap. You cannot do this with paper records, unless you make copies of all pages--a long and inefficient process. Source (with thanks): Page 1 of 1

11 6 Factors to Consider When Selecting Accounting Software for Your Small Business (Firmology) Managing the books for your small business is not a task you should take lightly. Good bookkeeping leads to good financial decisions. Bad bookkeeping can cause major oversights that can cost you your business. That s why it s so important that you use accounting software that makes it easy for you to see your business s strengths and weaknesses. A written-out ledger or Excel spreadsheet just doesn t cut it anymore. Only a few years ago, accounting applications lived on the desktop of the small business owner or their accountant s computer. The books were not accessible from another location and only one person could view them at a time. Then cloud computing took off and small business accounting software providers caught on. Today, financial information can be securely accessed anywhere, anytime, from any computer or mobile device. There are a number of options on the market and it can be overwhelming choosing the best one for you. However, the factors outlined below apply to the majority of small business owners and should be considered when shopping for an online accounting program. 1. Ease of use User-friendly online accounting software presents you with a straightforward dashboard that provides a snapshot of your company s financial health immediately upon logging in. The dashboard even highlights your key accounts so you can quickly gain insight into how your business is performing. You should then be able to drill into the dashboard and perform basic accounting functions with only a few clicks. There is no need to spend valuable time customizing an invoice for a specific client or to get caught off-guard by a suddenly-due bill. Your software should simplify your bookkeeping so you can quickly perform essential tasks. 2. Integrates with other tools Every business is unique and uses a plethora of tools to keep things running smoothly. It s likely that you use different applications to manage your various business operations (perhaps an e- commerce platform, a CRM system, or job tracking). Seek out accounting software that integrates with your other business management applications. Also, keep in mind that as your business succeeds and grows you may adopt other tools to handle the increased workload. In general, the more flexible your software is the better. 3. Connects to your bank Perhaps even more important than integrating with your CRM or job tracking platform is having the ability to connect your books with your bank. In the old days, you would have to manually enter bank transactions into your desktop software, but the cloud-based applications of today does this for you. Bank, credit card, and PayPal statements can be fed directly into your accounting software. Page 1 of 2

12 All you have to do is match and reconcile bank transactions against accounting transactions. This process is much more accurate and efficient than the old-fashioned method. 4. Protects your data When your financial data is stored in the cloud, there is no longer the possibility of vital information being lost in the event of a hard drive crash, power surge, or coffee spill. The data is backed up on external servers for you. Backup frequency varies among providers, so be sure to factor it into your decision. With cloud-based software comes the threat of your data falling victim to malicious activity. Online banking has set a standard for security, so make sure your software meets or exceeds this standard. That means Secure Socket Layer (SSL) encryption, multi-layered firewall server protection, and routine external audits and inspection. 5. Customer Support The ability to connect with an employee, other users, and experts is essential when learning any new software. The answer to your question will not always be in the manual or on the resources section of a website. Software providers with large customer bases often have online communities, made up of users interacting with each other. These communities are normally monitored by employees, who chime in on discussions when necessary. If you really want to become a bookkeeping master, you can opt for software that offers extensive training, such as video tutorials and webinars. 6. Price Free options do exist but they come with a price, usually in terms of the number of features available. Subscribing to a SaaS accounting provider for a monthly fee is a good fit for most small businesses. These companies often offer a free trial, which is a great way to determine the best option for your small business. Using the factors outlined, you should be able to find an accounting application that fits the specific needs of your business and makes your regular accounting tasks simple and accessible. Hopefully, your selection will give you great insight into your company s financial situation and empower you to make sound, profitable business decisions. Thanks to our source: Page 2 of 2

13 The Advantages of Using Computerised Accounting Software By Gary Hadler Let me start this article by saying I am a qualified accountant who has taught accounting at a variety of levels for over 18 years. I have also worked extensively as a business consultant for small and medium size enterprises. I am continually amazed when I come across a business either not using a computerized accounting package or using spread sheets to do their accounts. Therefore I decided to write a short article on the benefits of using a computerized accounting package. The package I use for our small to medium business is MYOB (Mind Your Own Business) accounting software. Small and medium sized businesses can now buy off the shelf accounting programs at remarkably low cost. Larger businesses will often have customized programs made for their business. The accounting programs carry out functions such as invoicing, dealing with payments, paying wages and providing regular accounting reports such as trading and profit and loss accounts and balance sheets. The introduction of computerized accounting systems provide major advantages such as speed and accuracy of operation, and, perhaps most importantly, the ability to see the real-time state of the company s financial position. In my experience I have never seen a business that has upgraded to a computerized accounting system return to paper based accounting systems. A typical computerized accounting package will offer a number of different facilities. These include: - On-screen input and printout of sales invoices - Automatic updating of customer accounts in the sales ledger - Recording of suppliers invoices - Automatic updating of suppliers' accounts in the purchases ledger Recording of bank receipts - Making payments to suppliers and for expenses - Automatic updating of the general ledger - Automatic adjustment of stock records - Integration of a business database with the accounting program - Automatic calculation of payroll and associated entries Computerized accounting programs can provide instant reports for management, for example: - Aged debtors summary a summary of customer accounts showing overdue amounts - Trial balance, trading and profit and loss account and balance sheet - Stock valuation Page 1 of 3

14 - Sales analysis - Budget analysis and variance analysis - GST/VAT returns - Payroll analysis When using a computerized accounting system the on computer, input screens have been designed for ease of use. The main advantage is that each transaction needs only to be inputted once, unlike a manual double entry system where two or three entries are required. The computerized ledger system is fully integrated. This means that when a business transaction is inputted on the computer it is recorded in a number of different accounting records at the same time. The main advantages of a computerized accounting system are listed below: Speed data entry onto the computer with its formatted screens and built-in databases of customers and supplier details and stock records can be carried out far more quickly than any manual processing. Automatic document production fast and accurate invoices, credit notes, purchase orders, printing statements and payroll documents are all done automatically. Accuracy there is less room for errors as only one accounting entry is needed for each transaction rather than two (or three) for a manual system. Up-to-date information the accounting records are automatically updated and so account balances (e.g. customer accounts) will always be up-to-date. Availability of information the data is instantly available and can be made available to different users in different locations at the same time. Management information reports can be produced which will help management monitor and control the business, for example the aged debtors analysis will show which customer accounts are overdue, trial balance, trading and profit and loss account and balance sheet. GST/VAT return the automatic creation of figures for the regular GST/VAT returns. Legibility the onscreen and printed data should always be legible and so will avoid errors caused by poor figures. Page 2 of 3

15 Efficiency better use is made of resources and time; cash flow should improve through better debt collection and inventory control. Staff motivation the system will require staff to be trained to use new skills, which can make them feel more motivated. Further to this with many off-the-shelf packages like MYOB the training can be outsourced and thus making a particular staff member less critical of business operations. Cost savings computerized accounting programs reduce staff time doing accounts and reduce audit expenses as records are neat, up-to-date and accurate. Reduce frustration management can be on top of their accounts and thus reduce stress levels associated with what is not known. The ability to deal in multiple currencies easily many computerized accounting packages now allow a business to trade in multiple currencies with ease. Problems associated with exchange rate changes are minimized. In summary if you have not computerized your accounting you should seriously consider doing so. I chose to train in MYOB after reviewing all the small to medium business accounting packages on the market. In my view MYOB was the best overall package. A free 90 day trial version of MYOB accounting software can be downloaded from your own country s MYOB website. This trial version is the full version but any business set up with it can only have entries entered for 90 days; after that, purchase of the software is required. I strongly recommend you download a version and take a look. About the author Gary Hadler B.Ec, Dip.Ed, MBA is a qualified accountant and a registered teacher in Hong Kong and Australia. Gary has taught accounting and computerized accounting software for over 18 years. Thank you to our source: Page 3 of 3