How Great Custom Software Simplifies Your Accounting System
Accounting systems are notoriously complex. Complexity breeds mistakes and inefficiencies, leading to wasted dollars that could have fueled company growth. One of the practical solutions is custom software development.
It streamlines workflow and boosts productivity, two benefits that translate to higher revenue and more focused professionals. This article sheds more light on:
- Significant challenges outdated accounting systems cause
- The best features and benefits of custom applications for the industry
- How to integrate the technology into processes and teams
Are you ready to make accounting easier? Let’s go!
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Why Is Accounting Complex?
A recent poll of 500 small and medium enterprises showed that 33% of owners said they needed more time to tick off their daily to-dos. One of the reasons was accounting. At least 20% claimed that managing cash flow was the most time-consuming task. Nearly 30% blamed dealing with taxes.
Accounting has been around for centuries but has mostly stayed the same. It is one of the most fundamental and most challenging aspects of running a business.
Why is accounting difficult? The reasons are aplenty.
First are the regulations that differ between countries and states. Consider taxation in the United States.
Delaware, Alaska, and Montana do not levy sales tax. Florida, Nevada, and New Hampshire do not charge income tax. America follows generally accepted accounting principles, while most countries adhere to international financial reporting standards.
Second, complex corporate structures further complicate accounting processes. Intricate charts of accounts, detailed intercompany transactions, and multi-entity procedures quickly bewilder. So do the rippling implications of reorganizations, mergers, and divestments.
Lastly, many businesses still use legacy systems. These contribute to siloed data, inefficiencies, and poor team collaboration. Some have upgraded to more modern platforms, but off-the-shelf options also introduce issues:
- Standard packages have dense but limited features to appeal to the broadest customer base.
- The limitations prohibit easy workflow integration and use.
- Custom codes offer relief but become difficult to understand for non-tech people.
- Some software requires manual updating or new downloads, costing more money.
Soon, accounting teams drown under layers of cluttered patchwork systems. Keeping operations running eats bandwidth, leaving little left to scrutinize results or provide strategic guidance.
The Custom Software Solution
Off-the-shelf accounting platforms are better than most legacy systems. However, why settle when you can opt for customization?
Accounting custom software development simplifies the workflow and interface. It also includes features that users need. This makes it a worthwhile, revenue-generating investment.
Suppose a construction firm has complex billing rules. Projects create multiple invoices with custom terms. Here is how the workflow differs between old-fashioned and innovative accounting:
| Old Accounting | New Accounting |
|---|---|
| The project manager approves the percent completed. | The project manager logs in and updates the milestones. |
| The accountant calculates the bill per contract. | The software automatically calculates the billing per account or contract. |
| The finance department generates invoices manually or through a spreadsheet, such as Excel. | The finance department generates invoice PDFs with premade templates containing customer terms and project details with templates. |
| Another person enters these invoices into the accounting books. | PDFs auto-attach to customer ledgers. |
The steps remain the same, but they have been simplified. This saves time and prevents mistakes.
Custom software development works for the accounting team. It does not make the team conform to rigid rules and features. The tool also feels familiar and provides real-time data when needed.
Automation and Integration: The Secrets of Custom Software
Two factors make bespoke accounting software effective: automation, such as artificial intelligence, and integration.
Automation refers to computer software performing repetitive tasks instead of people. For accounting, it handles routine processes such as the following:
- Copying data from one report to another
- Calculating invoice amounts using pricing rules
- Sending payment reminders to customers
- Downloading bank transactions into accounting journals
- Producing monthly reporting packets
For example, billing automation applies predefined rates to timesheet data. It churns out high volumes of client invoices with perfect accuracy. Accountants then review invoices and handle exceptions.
The benefits of accounting automation are evident in preparing and filing tax returns. An innovative platform:
- Imports data from bank statements, payroll, etc.
- Classifies all transactions using tax codes.
- Calculates deductions and income amounts.
- Automatically populates tax form fields .
- Checks for common tax mistakes.
- Asks taxpayers questions to collect additional data.
As an example, payroll data flows into Schedule C. The system immediately considers mileage as a business deduction, along with property taxes. Customization also encodes tax rules and rate tables. Additionally, the software updates itself when tax laws change.
Automation introduces software helpers to reduce burnout. Accounting professionals and business owners gain more time for other value-added work. It includes marketing strategy, decision-making, product development, and creativity.
Key Elements of User-Friendly Accounting Software
The best custom software development agency prioritizes users. What do they need? Who will use the software? What are their business goals? How does a tailored solution help them achieve these? What is their budget? What are their pressing accounting issues?
Bespoke accounting platforms vary, but they usually include the following key features:
- Modifiable workflows that standardize processes, such as invoice generation or month-end close
- Flexible configurations that adapt as needs change
- Real-time dashboards that centralize critical financial and operational data points for rapid decisions
- On-demand custom reports that deliver additional visibility without exporting data
- Rules-based automation that encodes complex accounting logic for calculations, reconciliations, postings, and data routing
- Integrated modules that connect budgeting, billing, ordering, revenue recognition, inventory, payroll, and reporting
- A flexible chart of accounts that dynamically structures data across entities, departments, programs, and grants
- User access controls that secure data
- API integration capabilities that allow linking external programs and importing or exporting data based on triggers
- Ongoing user support ranging from help guides to email or phone assistance.
Good custom accounting software revolves around streamlined workflows and data visibility for quicker decision-making. It also values flexibility to adapt to changes and needs, security to protect confidential information, and support to boost adaptability.
3 Tips for Successful Custom Software Development
Despite the benefits, a tailored accounting solution is only as good as its development and deployment. Design, use, and integrate it with these three essential tips:
1. Collaborate Effectively with Teams
Custom software directly serves accounting teams, so accountants must steer design practices. Their direct work knowledge shapes the right solutions.
Stakeholders such as controllers and chief financial officers set project visions based on pain points. Then, users validate that custom designs fix real workflow problems.
For example, managers request a dashboard showing timely revenue metrics. Developers build slick graphs, but users need critical data grids rather than charts. The revisions reflect the required changes, thanks to good collaboration.
Good collaboration among stakeholders also looks like this:
- Step-by-step flow analysis uncovers manual inefficiencies for automation.
- User testing verifies improvements at each milestone before further development.
- Ongoing course corrections prevent feature bloat that complicates instead of simplifies.
2. Implement It Seamlessly
Switching to new custom software disrupts productivity when handled poorly. Some users might struggle to adapt to the workflow, even if the platform offers better features. Making many changes quickly might also overwhelm staff already dealing with demanding tasks.
A well-planned, step-by-step rollout is vital for better returns and adoption. This table can help:
| Phase | Description | Actions |
|---|---|---|
| Phase 1: Preparation | Setting the groundwork for the new system | - Assess current processes. - Select pilot groups. - Plan data migration. |
| Phase 2: Initial setup | Configuring the software to match existing processes. | - Import existing data. - Configure basic features to mirror current workflows. - Ensure system continuity. |
| Phase 3: Pilot testing | Introducing new features to selected groups for feedback. | - Launch new features to pilot groups. - Gather feedback through surveys and interviews. - Refine features based on comments and suggestions. |
| Phase 4: Training | Educating the staff on new features using familiar terminology and tools. | - Conduct short hands-on training sessions. - Focus on the changes and new features. - Use known terminology for easy understanding. |
| Phase 5: Gradual implementation | Slowly introducing more advanced features. | - Introduce more complex features as user comfort grows. - Ensure foundational understanding before advancing. - Monitor user adoption and provide support. |
| Phase 6: Full rollout | Launching the complete software to the entire company or department. | - Implement all features across all intended user groups. - Finalize the transition from the old to the new system. |
| Phase 7: Ongoing support | Providing continuous assistance and resources. | - Offer in-platform chat, email, or phone support. - Have floor-support staff available. - Adjust support based on usage and feedback. |
| Phase 8: | Regularly reviewing and updating the system. | - Collect ongoing user feedback. - Make the necessary adjustments. - Plan for future updates and improvements. |
The transition duration varies depending on factors such as the size of the organization, process complexity, and staff readiness. Usually, it takes between three months and a full year.
Introducing a new technology also comes with hiccups. Data migration and budget issues are common, and so are people resistant to change.
The key to a successful transition is flexibility and responsiveness. Be prepared to adjust timelines and spending. Provide additional support where needed. Communicate regularly with all stakeholders and find a reliable custom software development agency that guides you throughout the process.
3. Let It Grow with the Business
Custom accounting software must adapt as a business grows to meet changing needs.
Consider an ecommerce startup. Financial management needs are straightforward during the early stages. The system handles basic tasks, such as invoice generation, simple expense tracking, and financial reporting.
As the company grows, it deals with higher sales volume and diverse products. It also expands to more states and international markets. Accounting requirements become more complex. The software should manage multi-currency transactions and track inventory across multiple locations. It must also handle various market segments and comply with different tax regulations.
A good custom software development team avoids a “big bang” overhaul, which is often costly and prone to both mistakes and resistance. Instead, it rolls out incremental new features and upgrades unless industry guidelines dictate quick changes. For instance, if the IRS releases new tax rules.
These rollouts can be monthly, quarterly, or semi-annual. Either way, user feedback and data guide these changes to ensure they consistently align with user needs.
Developers also create flexible accounting forms for easy modifications and integrations. For instance:
- The business can add or edit fields and categories without extensive support or coding.
- Custom import tools empower executives to add external data in various formats.
- Users generate specific financial reports. These include sales performance by region or product line profitability.
- The software syncs with other systems, such as customer relationship management or inventory management tools.
- Businesses can configure alerts for specific events or thresholds, such as low inventory levels.
- The software integrates with bank accounts and financial institutions for real-time cash flow tracking and automated bank statement reconciliation.
- Users can personalize their dashboard to display the most relevant financial data and metrics at a glance.
Summing Up
Fragmented processes, siloed data, and software mismatches quickly exhaust accounting teams. Off-the-shelf options help, but many fail to meet real-world needs.
Imagine an accounting system that thinks like you do. How would that simplicity transform your daily business operations? Custom software promotes more efficient use of resources, especially budget and time. It streamlines workflows while staying compliant with industry regulations.
If you want to learn more about custom software development, contact Digital Authority Partners. Schedule a free consultation today.
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