If you’re an accounting manager, you must have heard of accounting systems. For those of you who haven’t, an accounting system is a type of software that records and processes various accounting transactions. Although many companies have used automated accounting systems, some still prefer the traditional way of managing their books. So, what are the differences between a traditional accounting system and an automated accounting system?
Traditional Accounting VS Automated Accounting
Traditional accounting is a process of managing books and various accounting transactions manually without the help of software. In traditional accounting, the role of accountants becomes crucial because they’re the ones that have to record, calculate, and create complete, error-free financial statements. Usually, it takes more than one person to perform all those tasks since they’re done manually.
Unfortunately, human error is unavoidable in traditional accounting. This is why many companies have switched to automated one.
Automated accounting still involves the role of humans to enter data, but most processes are automated, especially recording and reporting. With an automated accounting system, human error can be minimized so that the accuracy level is higher than that of conventional accounting.
7 Main Benefits of Using an Accounting System in Your Company
1. Saves Time and Costs
Bookkeeping is known as a very time-consuming task because there are plenty of transactions to record and count. However, with an accounting system, all the procedures can be automated so that they can be finished quickly. Your company does not need additional accountants to perform bookkeeping and other tasks so that you can save on your company’s costs for other important needs.
2. Increases Financial Visibility
An accounting system makes it easy for stakeholders to monitor the company’s financial position more comprehensively. Management can keep track of expenses and revenues as well as profits and losses across different business units and departments. With HashMicro’s Accounting System, you can even generate cash flow forecasts. You can see all your company’s financial information in a single view through a financial dashboard.
3. Minimizes Errors
Manual calculations have a higher risk of errors, because in order to ensure accuracy you have to depend on the accountant’s precision. However, with an accounting system, the calculation process is automated. Errors like duplicate data can also be detected. Accountants don’t need to spend a lot of time correcting data and can focus more on tasks that really need their skills.
4. Improves Asset & Inventory Management
A good accounting system should be connectable with your company’s asset and inventory management. This means that it must enable you to manage your assets and inventory as well. HashMicro’s Accounting System for example, allows you to automatically calculate asset depreciation, track inventory costs, and perform stock taking more easily.
5. Provides Real Time Data
Accounting software allows you to track your company’s financial data in real time. You can immediately find out the exact amount of money that goes in and out anytime. Real-time data is very useful, because it helps you come up with the right strategies and plans to improve your financial management.
6. Enhances Decision-Making Process
With complete, accurate, and real-time reports, stakeholders will be able to make better financial decisions for the company. They will be able to find out what processes cost the most, which costs can be reduced, and so on. They can also decide whether the company is financially ready to invest, expand, hire more employees, try new marketing strategies, and so on.
7. Gives You High Flexibility
Web-based accounting software gives users the convenience of tracking their company’s financial information and performing accounting tasks from anywhere. Users only need an internet connection to be able to use the app through a web browser.
In addition, web-based accounting software can also be used on any mobile device, including smartphones and tablets. With granted access rights (which can be set by admins), users can view financial statements or carry out various desired processes anytime and anywhere.