Accounting software are computer-based programs aimed at helping business owners and accountants in reporting a firm's financial transactions. Accounting technology has played a crucial role in keeping track of numbers, invoices, and transactions that are vital to an organization. In the early centuries, business relied heavily on manual technology and paperwork, calculators and ledgers.
Subtle changes took place in the field of accounting field in the 19th century with the introduction of the Codex machine invented in 1870 by Leonardo da Vinci to record digits and the calculator, which, helped make work easier for accountants. However, the job remained the same, as there were torrents of paper records. In 1970, the introduction of computers and the advancement of technology led to the development of accounting software, which made work easier for accountants. Accounting and invoicing software eliminated the need for adding machines, pencils, and ledgers in one swoop. It became easier for accountants to integrate transactions, keep track of information and eliminate mistakes. This led to greater efficiency and accountability in the field.
Description
The advancement in technology and the adoption of accounting software in businesses was a major milestone in the 20th century. Most businesses were able to carry out basic accounting functions with their desktops and personal computers. With more advancements in technology and the need to integrate company information, cloud-based accounting is being adopted globally. Many businesses are migrating to cloud-based accounting software, as it is a viable solution to the tedious and limited hardware based accounting programs.
Cloud based accounting entails the hosting of accounting software on remote servers and all application functions are performed off-site and returned to the user. Users are able to access the information through the internet from a cloud application service provider. Cloud accounting software free businesses from installing and maintaining software on every employee's desktop.
Cloud storage only provides account access to authorized personnel, gives real-time data on demand and instantaneously update data. It also provides visibility within the organization by ensuring the integration of data between various departments. Subscription-based models of cloud accounting have become common with providers such as SAP Business One, Oracle and Deltek providing business with installation and maintenance services. The initial cost of installation may be higher for cloud-based software, but cheaper in the long run since updates are done at cheaper costs.
Purpose of accounting software in Business
Accounting and finance are a vital function in any business organization. Ideal accounting and invoicing software by firms help them shift from traditional numbers role to advanced systems for recording and accuracy. Accounting software has helped businesses in a number of areas such as
- Providing access to professional financial statements: Through accounting software, businesses are able to generate income statements, balance sheets, and cash flow statements, which help in evaluating business performance
- Proper audit proofing: Accounting software help businesses in providing reliable proof to the state tax department during annual audits
- Easy input of data: Manual recording of data is time-consuming and prone to errors and fraud. However, with the use of accounting software, it is easy to record large amounts of data accurately