Accounting software gives you a clear and transparent view of your company’s money flow and financial position. Although the features of accounting software might differ from one software to the other, they all automate the recording of transactions, creating reports, and tracking account balances, among many other financial activities.
Accounting software enhances business efficiency by managing and monitoring your company’s cash flow and outflow. Therefore, before you finally decide on a software solution, it is important to be well aware of the software’s ROI.
What Is An Accounting Software?
Accounting software is a tool built to assist businesses and manage their financial activities automatically. Such software takes control of multiple tasks along with bridging the gaps of human errors. Some of the major features of an accounting software include:
- Tracking and recording expenses and income.
- Generating and forwarding invoices.
- Tax filing and calculation automation.
- Creating detailed financial reports.
- Streamlining multiple accounting workflows.
Common Costs Of Accounting Software Integration
The cost of integrating accounting software depends on several factors, such as the complexity of your accounting requirements, the size of your business, and other features that you need. Some of the common cost components of accounting software include the following:
- Subscription fees or software licensing fees: A company must pay these costs to use the software. For any cloud-based software, you need to pay a certain annual or monthly subscription fee. In addition, an on-premise software might come with a one-time licensing fee.
- Implementation charges: Implementation charges for accounting software include the fees to install and set up a particular software, transfer data from the old system, and integrate the software with other software or systems.
- Training cost: Your company’s employees must be well-versed in using the software in the best possible way. You might have to pay a training fee for this. This might consist of fees to be paid to the software provider, in-house training fees, or training fees to a third-party trainer.
- Maintenance cost: When using on-premise software, you must budget for periodic upgrades and ongoing maintenance. However, for cloud-based software, such charges are included in the subscription fee.
- Customization charges: If you are willing to customize your software and include premium features, you might have to pay an additional cost for this.
The ROI Of Accounting Software Integration:
Even though you might get your hands on accounting software that aligns well with your budget, it is crucial to analyze the return on investment to benefit your business in the best way possible. Some major points to consider when measuring the return on investment are:
- Cost reduction via automation: One of the most crucial points driving return on investment in integrating accounting software is its potential to boost cost savings. By automating labour-intensive and repetitive tasks in a company, a business can minimize its dependence on manual labor, which eventually reduces staffing costs and enhances efficiency. In addition, automation also reduces the risk of discrepancies and errors, which might otherwise result in major and costly financial mistakes.
- Reduce errors and improve accuracy: Automation improves the reliability and accuracy of your company’s financial data by minimizing human error. Manual processing and data entry are quite prone to mistakes, leading to serious losses for financial decision-making and reporting.
However, when such tasks are automated, companies gain confidence with better consistency and accuracy in their financial reports and records, ultimately reducing the risk of audit findings and costly errors.
- Flexibility and scalability in accounting operations: Accounting automation provides flexibility and stability, helping businesses to adapt to fluctuating demands and needs. As companies evolve and grow, their accounting needs also change. Hence, automation offers the agility to diversify operations as required without any manual restructuring or intervention. Such scalability by accounting software ensures that a company can continuously gain ROI from its investment in accounting software integration for long periods.
- Time-saving: By streamlining major financial processes and reducing manual intervention, automation offers finance teams more time to focus on more productive and strategic initiatives rather than performing repeated tasks. This eventually enhances efficiency and boosts a company’s productivity.
Conclusion:
Your company’s decision to integrate accounting software must be made after a careful and detailed analysis of both the costs involved and the return on investment. Even though the initial charges may be substantial, better cash flow, time savings, better decision-making, reduced errors, and flexibility offered by the software can eventually grow your company financially.