The features and advantages of an Integrated Accounting System
An accounting system by itself can deliver such great benefit to a business enterprise of any size in whatever industry. Imagine how much more an integrated accounting software will do.
An integrated accounting software offers all of the advantages of a standard accounting system, and provides an additional benefit that stand alone solutions cannot.
Here are the features and benefits of an integrated accounting system:
An integrated accounting system contains both core and non-core modules. Among the core modules included in the system are accounts receivable, accounts payable, general ledger, billing, stock inventory, purchase order, and bookkeeping. Similarly, the non-core modules that an integrated accounting system may include are debt collection, electronic payment processing, expense, inquiries, payroll, reports, timesheet, purchase requisition, reconciliation, drill down, journals, departmental accounting, support for value added taxation, among others.
The modules of the integrated accounting system have the same look and feel and are compatible with each other. This is what makes the seamless integration possible.
An integrated accounting system is relatively inexpensive, especially when weighed against the benefits that it would bring to the enterprise.
Such a system could be developed in house, or bought off the shelf, or even be a mix of the two.
The integrated accounting system, because it seamlessly allows information to flow from one module to another, enables company employees and executives to be more efficient at work. They do not anymore have to encode information twice, or ensure that the data inputted in one module is consistent with that used in another one. That precious time and energy is conserved and channeled to some other productive activity is one of the things that make an integrated accounting software stand out from among the rest.
In the same manner that employees across various departments are freed up from tedious and error-prone tasks that hamper their productivity, executives and decision makers also stand to benefit from an integrated accounting system. This is because the system is able to record and store information across periods of time. Hence, detailed and comprehensive analyses can be made at all levels using the wealth of information in the accounting system.
The company’s decision top officers can thus make strategic decisions based on accurate information fed to them by the integrated accounting system. They can rest assured that the financial picture painted by the system is correct and timely. They can then modify their plans or set new targets based on what the system gives them. As a result, the business is more poised to grow and become a significant player in the industry.
In fact, that the integrated accounting system can be used by a company of any size operating in any industry is one of its advantages. Flexibility is key in choosing an integrated accounting software. It could be used in many different ways and one does not even have to choose between an in-house developed system or an off the shelf variety. A hybrid system can be adopted, taking into consideration the unique characteristics of the company and the industry it operates in.
With an integrated accounting system, it becomes easy to trace exactly how and why the business performed as it did. Because of this, the company will be able to isolate concern areas and address these issues specifically. Decision makers will see immediately how one area affects the entire financial situation of the company.
Similarly, it also becomes easier to set targets. An integrated accounting software provides information per core function as well as aggregate results. Thus, companies would know what aspects of operations they need to strengthen if they want overall figures to grow by as much.
In the beginning, accounting systems were not integrated. This caused great inconvenience to those who have already decided to computerize the way they do business. Their problem was linking the various stages of the business together and making sure that no piece of information in lost in the transition. Often, what has been inputted in one module had to be double checked and re-entered into the next. Employees were prone to mistakes and/ or fatigue, resulting in inaccurate figures in the system.
The arrival of an integrated accounting system however changed all this. It provided the benefits of an automated system where information flows seamlessly from one function to the next. After all, no piece of information exists in isolation. Every piece was a result of something else and will also affect yet another thing.
Companies will take comfort in the fact that an integrated accounting system is now the norm and hence there are many products and resellers/ implementers to choose from. The technology has been around for a while, yes, but the key now is to choose the right form for one’s unique business needs. For example, what industry is one operating in? Is the regulatory environment dynamic in this field or are the laws and regulations evenly implemented? What is the taxing situation and are there any incentives given by the government to players in a particular field? All these will have an impact on the bottom line of a company.
Other questions include, is the business capital intensive and in how many years will operations begin to be profitable? How many branches are there, in what locations, and how are these different places (local or international) linked up so that a more accurate picture of the operation is painted? Likewise, how does the performance of a remote branch affect the performance as a whole?
Finally, manpower issues are also paramount, because ultimately it is the people who make the business grow or stagnate. It is thus important to ensure that they are comfortable with the tools given them by management in order to perform their jobs. Accounting software, like accounting itself, used to be only for those with long years of training in this function. In recent years, however, the integrated accounting software available have become less complicated and easier to learn, and even non-accountants will find, to their pleasant surprise, that they could use the software to achieve the company’s financial goals.