Definition of accounting software
Accounting software is a type of computer software used to manage accounting processes in companies and institutions. These programs offer a range of features that aid in accounting, such as:
- recording business transactions,
- payment and settlement management,
- tax recording and settlement, including keeping VAT registers.
Accounting software should also enable the preparation of financial reports and the analysis of financial data. Broadly speaking, accounting software is a comprehensive ERP system. It supports not only accounting but also most company processes. It allows for order acceptance, invoice generation, sales and purchasing management, warehouse management, finance, and production processes. As a result of advances in computerization and programming technology, modern software can automate most processes related not only to accounting and bookkeeping, but also to other areas of business and institutional operations.
How does accounting software help?
Keeping accounting records
The primary function of accounting software is to manage accounting processes within a company. Accounting is the process of documenting and monitoring all transactions (including financial ones), revenues, and expenses of a company or organization. This allows us to track and analyze the financial health of an enterprise while maintaining legal, tax, and regulatory requirements. Accounting records can be divided into:
- simplified
- full
In the case of simplified accounting, we limit ourselves to maintaining books in a narrow form solely for tax purposes, resulting from the chosen form of taxation. In the case of full accounting, we are dealing with maintaining accounting books for balance sheet and tax purposes using a chart of accounts and principles defined within the accounting policy, consistent with, among other things, the Accounting Act.
Calculating taxes
By recording business transactions in accounting records, we strive to achieve tax calculation capabilities. Accounting software, by maintaining records electronically and in an organized manner, ultimately facilitates and simplifies the calculation and verification of tax levies. Most software programs include templates and reports enabling automatic calculation of income taxes, local taxes, and VAT.
Maintaining tax documentation
Maintaining tax records is the process of maintaining all necessary documents. It requires recording economic events related to a company’s operations to meet tax requirements. This includes collecting, storing, and managing documents such as invoices, bills, contracts, proof of purchase, records of income and expenses, and any other documents required by tax law. The essence of using accounting software is maintaining accurate and comprehensive tax documentation. This is crucial for ensuring compliance with tax regulations and minimizing the risk of audits and financial penalties. Within the software, the aforementioned data is stored in the form of invoice registers, accounting entry registers, VAT registers, and SAF-T structures, with the future KSeF (National Tax Settlement). Currently, only accounting software, as IT tools, can meet the requirements of tax regulations and relevant authorities.
Financial activity support – payments and settlements
Accounting software also provides support for bank account and cash register records. This includes basic support for deposits and withdrawals, and extended functionality, including:
- support for automatic imports of transfer and operation history and export of transfer batches – integration with electronic banking,
- currency exchange and currency valuation services,
- split-payment support,
- statements of receivables and liabilities and payment estimates,
- settlement management,
- calculation and accounting registration of exchange rate differences and valuations,
- conducting and managing debt collection.
Accounting templates – automation of assignment processes
Every business transaction, within the framework of comprehensive accounting, should be reflected in the form of a decree – an appropriate accounting entry. Accounting software offers powerful automation capabilities for this process. One of the tools offered by the software is decree templates – automatic accounting templates. These templates contain instructions or algorithms indicating the manner, scope, and methods of accounting for business transactions. This applies particularly to documents, payments, payrolls, depreciation, and accounting records. In this way, accounting software users, by utilizing accounting templates, save time and energy on purely technical tasks. As a result, they gain instant access to data in the books, enabling rapid and comprehensive analysis.
Invoicing and warehouse management in accounting software
In accounting, programs often integrate invoicing and warehouse management functions to enable users to manage their businesses comprehensively. Accounting programs typically enable the generation of customer invoices based on services performed or goods sold. They also allow the creation of collective, recurring, or recurring invoices, as well as monitoring their status (paid, unpaid, overdue). In their advanced versions, ERP systems enable the recording of the entire sales process, from quotations, through orders and goods release notifications, to the issuance of warehouse and commercial documents (invoices). Warehouse management integration allows for the tracking of inventory levels, the management of deliveries and orders, and the monitoring of inventory turnover.
Accounting software as a component of the ERP system – integrated software for running the entire company
ERP systems are a separate category of advanced accounting software, supporting the vast majority of company processes and managing enterprise resources. In this software, accounting permeates many aspects of running a business. Therefore, accounting software provides advanced features that enable the flow of information between various departments within the company. As a result, it facilitates decision-making based on data from various areas of the business.
How much does such a system cost?
The cost of software depends on the scope of functionality it offers. Basic accounting software can be offered free of charge (e.g., as a supplement to a financial newspaper). These programs provide only very basic functions, primarily related to invoice recording and basic tax calculations. The more complex the program’s functionality, the higher the purchase (licensing) and implementation costs. In the case of ERP systems for corporations, including modules for management analysis, controlling, or BI, along with various access interfaces (B2B, cloud), and taking into account the company’s infrastructure (number of workstations, branches, etc.), prices can reach many millions of zlotys.
Licensing and work models
We can briefly characterize work models in two ways.
First, it involves working with the program installed locally on company computers. This model can be multi-station with a database installed on a server. Licensing can be one-time (global) or based on the number of workstations (end users). Second, the accounting software can be delivered as a “cloud” solution. In this case, licensing can be based on a subscription model (fixed subscription fee).
How to choose accounting software
To choose the most appropriate accounting software that meets the needs of your organization, you should focus on the following four aspects.
Research – searching for the best program
Your search should begin by defining the requirements such a program would meet. You should review reviews and opinions of available solutions on the market. During your search, you should also consider:
- compliance with legal regulations
- updates and technical support offered
- price
- possibility of integration with other systems
- possibility of programming and functional changes to suit your own needs
Choosing a licensing model
During the purchasing process, it’s also important to pay attention to the software’s licensing model. It’s important to verify whether it’s a one-time (proprietary) license, a per-user license, or a subscription. It’s also worth checking whether the licensing model includes update fees or not.
Adapting to your needs
It is important to choose an accounting program that, without the need for major modifications, will provide a range of functionalities and options that are most useful for the company or organization.
Budget
It is worth remembering that within the planned budget for the purchase of accounting software, we should take into account, in addition to the costs of licensing and implementation, additional fees related to ensuring programming changes, possible integration with our software (if we have any) and the cost of additional assistance for users after the system launch.
Benefits of using an integrated accounting program
Using integrated accounting software can provide many benefits to businesses. Here are just a few:
- Increased efficiency – integrated accounting software allows you to gather all your financial data in one place. This eliminates the need for employees to manually transfer data between different systems, saving time and increasing work efficiency.
- Improved work ergonomics – accounting software offers numerous features that make working with the system easier, including an intuitive user interface, customizable settings, the ability to automate repetitive tasks, and, in many cases, online access and access to online technical support. Improving work ergonomics with integrated accounting software can help increase productivity, reduce stress, and improve employee well-being.
- Greater data accuracy – by automating accounting processes, the risk of human error is significantly reduced. ERP systems often include error-checking features and automated data consistency checks, which help ensure accounting is maintained in accordance with applicable standards and regulations.
- Better financial control – accounting software allows for ongoing monitoring of a company’s financial status. This allows managers and owners to quickly access important data and analyze expenses, revenues, and other financial metrics, enabling them to make more informed business decisions.
- Better customer and supplier relationship management: accounting software can incorporate CRM and supply chain management (SCM) modules, enabling better and more effective management of customer and supplier relationships. This allows companies to track transaction history, customer preferences, and effectively manage purchasing and delivery processes.
- Oszczędności kosztów – choć początkowy koszt wdrożenia zintegrowanego systemu księgowego może być wyższy, w dłuższej perspektywie korzyści z automatyzacji procesów, zmniejszenia ryzyka błędów i zwiększenia efektywności pracy przynoszą znaczące oszczędności dla firmy.
