Top 5 benefits of integrated accounting system- SoftwareSuggest

In recent times, accounting software has become one of the most indispensable tools for all types and sizes of businesses.

As a business owner, you would know how difficult it is to manage all your finances manually. Accounting software is responsible for simplifying financial operations through strategic planning and control of business processes within an organization. 

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However, new software is gaining much popularity, commonly known as an integrated accounting system. You may ask why. Integrated accounting software has a lot of benefits to offer that enables organizations to efficiently run and expand their businesses. 

Before we delve further into its benefits, let’s first try to understand its functionalities. 

So, What Is Integrated Accounting System? 

As the term suggests, an integrated accounting system is an upgraded version of accounting software that combines all the major financial functions into one application. In short, it eliminates the need to maintain separate books or records for management accounting purposes, such as ordering, costing, and much more. 

An integrated system brings together different software applications effortlessly, without the need for additional as well as expensive software or manual manipulation.

For instance, it will automatically re-key information from order management into the accounting software. It not only saves time and effort but also reduces the chances of any human error. Plus, the system receives a constant flow of data, keeping it up-to-date all the time. 

Features of an Integrated Accounting System

An integrated accounting system has two types of modules: core and non-core modules. 

The core modules consist of the key functionalities, which can be found in almost every integrated accounting system. It includes: 

• Accounts receivable and payable
• Purchase order
• General ledger
• Bank reconciliation
• Billing and bookkeeping
• Stock inventory

Whereas, non-core modules are the optional add-ons that can be added or removed as per the business needs. For instance, the need for multi-currency and multi-language support is particularly useful for businesses that have a global presence. Some other non-core features are debt collection, payroll, electronic payment processing, timesheet, and more. 

In fact, many systems also combine the customer relationship management software and full inventory management to form a fully integrated enterprise resource planning system. These modules are seamlessly integrated. 

Now that you know what an integrated accounting system is, let’s talk about its benefits. 

Why You Should Consider Using an Integrated Accounting System

Here are the five main benefits of using an integrated accounting system. 

1. Provides a Real-Time View of All Transactions

If you have standalone accounting software, it will require you to manually take all the information from the ordering system and enter it in the accounting one. 

It not only invites human error, but there are chances that you might not have the updated financial information needed to make a quick and smart decision. It hampers business growth as well as requires an extra workforce to re-enter the data. 

This issue can be easily avoided by using an integrated accounting system. Integrated accounting provides you with a real-time view of all the transactions related to business. The information automatically flows into the accounting system as the transactions occur. 

Another plus point is that the cloud-based system has enabled users to easily carry their complete financial information on their device, wherever they go. 

2. Helps in Calculating Accurate Job Costings and Commissions

The problem with standalone accounting is that it doesn’t have direct integration with order management. Thus, it doesn’t know which costs go with which jobs. 

Effective integrated accounting software can smoothly perform processes like calculating job costs, sales commissions, and more. 

Since all the postings are automatically made to the general ledgers, accounts receivables, and payables, accounting software has all the information needed to calculate the commissions and other job costs. The most significant advantage is that the calculation is entirely accurate, with no chance of error. 

In another viewpoint, it also eliminates the need to manually process different costs. Otherwise, it would have become altogether another manual process in itself to perform. 

Also, Read: 10 Best Accounting Automation Software For 2020

3. Increases the Reliability of Data Entry

With standalone accounting software, you require to manually enter all your customers’ and vendors’ data from one application to another. This often results in duplication of data or incomplete entries. In short, there is no reliability of data as these entries are prone to human error. 

There is no denying that the data entry task requires extensive attention and time. The need for manually entering data gets eliminated by implementing the integrated accounting system. 

An integrated accounting system removes challenges like double entries or the chances of missing an entry. In some cases, it also identifies duplication of entries, if any, and merges them into one. 

4. Increases Productivity at Work

Re-keying entries cost extra time and workforce. Besides, it invites human error and omission that might go unnoticed and results in miscalculation. 

By using an integrated accounting system, business houses can make efficient use of their time. An integrated accounting system with other business management system removes re-keying, which results in freeing up extra time. This extra time can then be used to focus more on new opportunities or other business development activities. 

Furthermore, integration of systems ensures the reliability of the information, which can be utilized for activities like tax filing. 

5. Speeds Up Decision Making

Lastly, and most importantly, you can access and operate all financial information related to your business from a single interface. 

Linking all accounts receivable and payables ensure higher visibility of transactions on both vendor and customer sides. Besides, it makes it easy to analyze all your historical data from one place and make insightful decisions. You can easily evaluate transactions like the vendor’s supply history, sales estimates, and other information from a single dashboard and form smart business strategies around it. 

Final Words: Choosing the Right Integrated Accounting System

An integrated accounting system will soon become the norm for every company. After all, no piece of information exists in isolation, and integration results in a seamless flow of information from one function to another. 

Thus, the key here is to choose the right system that fits well into your unique business needs. 

You can either choose to buy the system off the shelf or have a bespoke system developed as per your needs. But before selecting, you need to have a clear idea of your requirements. It would help if you asked questions like.

• What are the functionalities you will really need? 
• Which industry does the system operate in?
• Does the system stay in compliance with dynamic laws and regulations that are regularly implemented? 

Furthermore, you will need to consider its ease of use. Your employees, even a non-tech savvy person, should find it easy to use with minimal training. However, in recent times, the integrated accounting software available has become less complicated to use.

But many vendors offer a free trial of their software. You and your staff can try out some features of the system and see if the interface and functionality feel right. 

And lastly, each system comes with its own different set of pricing plans. Don’t forget to consider the budget before making a purchase. 

So are you ready to implement the system?