What are the benefits of an integrated accounting software package

When we talk about an integrated accounting software package we’re usually referring to one that takes the hassle out of accounting your business. This is because such a package will have modules for all the main sections of time consuming bookkeeping and accounts preparation.

Integrated accounting software packages are becoming a more common choice for small businesses, as the field of enterprise resource planning (ERP) continues to expand. According to a report from Technology Business Research’s Global ERP and CRM 2011 Study, one reason for the growth in integrated accounting software is the rise in independent software vendors that sell such solutions.

The benefits of an integrated accounting software package include:

  • It’s easier to manage your business. With one system, you can do everything from bill customers to pay employees, track purchases and sales, and keep your books in check.
  • You don’t need to hire a separate accountant. An integrated accounting software package will contain all the features and functions you need to streamline your bookkeeping and tax filing efforts—and if it doesn’t have what you need, you can always add it later.
  • You can track your numbers more easily and make better decisions based on them. Integration between different modules means that data flows seamlessly between them; for example, when your accounts receivable program is integrated with your inventory management tool, it will be able to tell you exactly how many customers owe you money and how much they owe so that you can plan accordingly.

An integrated accounting software package saves you time and money. When you use one system to handle both your bookkeeping and your accounts payable, it cuts down on errors, reduces the number of steps between when a transaction is recorded and when it is paid, and lets you focus on other parts of your business.

The main benefits of an integrated accounting software package include:

  • Less time needed to reconcile payments and make adjustments
  • Less chance for human error in the payment process
  • Better visibility into cash flow with fewer steps between recording a transaction and paying it

Integrated Accounting Eliminates Re-keying

Re-keying creates two major problems. One is that it costs time and labor that could otherwise be devoted to more productive activities. The other is that that it invites errors and omissions that either go uncorrected or require more time and labor to find and fix.

A business management system or ERP with integrated accounting eliminates re-keying, which frees up staff to focus on sales and opportunities. Re-keying information from an order management system into a standalone accounting system is not an efficient use of time, and will inevitably lead to mistakes that no one wants on their books.

Integrated Accounting Provides Real-Time Information

Standalone accounting is always behind as it waits for someone to manually take information from the ordering system and re-enter it in the accounting system. That means never having the up-to-date financial information that’s required for the best decision making possible. Since data re-entry also invites human error, standalone accounting also stands a greater chance of leading to decisions based on faulty information.

Integrated accounting provides a complete real-time picture of the business at any time since information automatically flows into the accounting system as orders are processed. A web-based business management system with integrated accounting even lets you take complete, accurate financials with you wherever you go.

Integrated Accounting Can Automatically Perform Job Costing

With integrated accounting, even sophisticated accounting processes like job costing can be performed automatically — effectively as a side-effect of processing orders. Postings are automatically made to Accounts Receivable, Accounts Payable, and the General Ledger so that the accounting system automatically has the information it needs to calculate job costs and to perform other accounting processes.

Standalone accounting systems that do perform some form of job costing often run into problems. Standalone accounting doesn’t “talk to” the order management system like an integrated accounting system would and so it doesn’t inherently know which costs go with which jobs. Attributing certain costs and information to certain jobs and orders might become a new manual process in itself.

Integrated Accounting Results in Accurate Commission

Similar to the way that an integrated accounting system can automatically perform job costing, an integrated accounting system can automatically calculate sales commission including split commissions. Once again as orders are processed the integrated accounting system receives the information it needs to calculate commission.

Integrated accounting systems are especially useful for companies that make job costs part of commission formulas. By automatically performing the job costing, the integrated accounting system automates one of the major factors to calculating accurate commission.

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