If you’re a fresh business owner stepping into the entrepreneurial world, understanding all the nuances of your business can be a daunting task. Managing the team, the projects, multiple business operations, and especially the finances can complicate things further and give you mental stress.
Manual book-keeping is tiresome and everyone can vouch for it. This holds valid especially when you’re a small enterprise who’s constantly juggling between a large number of clients. If we look at the current scenario, such days are nothing but a long-forgotten memory.
Today, the evolution of technology has paved the way for dedicated online accounting software at the forefront of every business. However, if you’re still the old-school kind who relies on managing the finances via paper ledgers, it’s time to switch to the 2020 mindset & start using accounting tools.
In this blog post, we will walk you through different aspects of accounting software, majorly covering the following 4 topics:
- What is accounting and accounting software?
- Offline Vs Online accounting tools: A quick comparison
- Benefits of using online accounting software
- Pointers to keep in mind Before subscribing for a cloud-based accounting software
What is Accounting & Accounting Software?
Accounting is often called the “language of business” and is a means of keeping a record, measuring, and communicating all information pertaining to a company’s finances and the transactional record. In general, accounting is a combination of four components namely:
- Recording/Bookkeeping – keeping a systematic & manual record of all the transactions the firm enters into. Though, it’s not
- Summarizing – the classification of data into categories for decision making. Whenever a transaction occurs, two things occur, first – an individual record is made, and secondly, the summary record gets updated
- Reporting – A way for investors & stake-holders to keep themselves updated about the company’s state of affairs & learn how their money is being invested for the upliftment of the organization. Regulated by government bodies, the reporting is done in the form of financial statements.
- Analyzing – Conclude after analyzing and summarizing the results to determine the overall performance of the business
Accounting software is a one-stop solution for business owners and accounting professionals helping them manage their various bookkeeping tasks. It not only stores the entire financial data of the organization but is often used to perform business transactions. Giddh offers one of the best cloud-based accounting software in India with features that empower your business.
Offline Vs Online Accounting Tools: A Quick Comparison
When it comes to storing the data online, almost everyone gets equally skeptical. However, the latest improvements have made these tools much more secure and efficient making them a perfect replacement for desktop accounting software.
In this segment, we compare why offline accounting tools like Tally are no longer considered and why is cloud accounting software a better option?
5 Pain Points of Tally: A Not so Friendly Accounting Tool
Although the accounting software landscape is a packed one, small organizations still rely more on offline accounting tools like Tally for their daily financial needs. However, there are some general pain points that you must understand like:
- Keeping traditional accounting tools & the data they hold updated is a task
- The offline software might run into licensing issues quite often and the renewing process can be quite expensive
- With desktop software accessible on certain devices, data sharing through USB or e-mail is quite normal which further comprises the security of confidential data
Major Disadvantages of Tally
here was a time when Tally was one of the widely used accounting software in India, however, the advancements, the release of better software, and internal loopholes of Tally made it outdated and harder to use for the organizations.
Some major disadvantages of Tally include:
- Non Newbie/User-friendly
The first sign of good software is often checked in the form of its user-friendliness. Though Tally is a great accounting tool, it fails to be a user-friendly software. It has a complicated GUI and is a complicated tool for new users especially the ones who aren’t aware of accounting basics. Even the latest version of Tally v9 looks like old DOS-based accounting software.
Every new business keeps a tab on their expenses and it isn’t easier for them to incur expenses without long-term benefits. Many retail stores still consider Tally an effective tool for their accounting needs, but one can’t deny that the tool is quite expensive making it hard for businesses to utilize it optimally.
- Limited Accessibility
We’re living in a wired age wherein we need access to everything Anytime, Anywhere, however, the same can’t be said for Tally. As a tool, it doesn’t allow multiple access limiting the execution cycle and the lack of real-time synchronization further complicates things.
- Steep Learning Curve
Unlike other desktop application software, Tally is quite hard to grasp. It offers limited customization options, doesn’t include any default setting option to make changes in the product (as per the requirements), and has an unfriendly user interface. These little yet large gaps make it even more difficult to use (for both the fresher & the experienced folks) on a daily basis.
- Piracy Issues
Owing to pricing issues, it’s quite common for the resellers and common folks to download pirated versions of the software from the internet and sell it at cheaper prices. Business owners buy these pirated versions to save money, but this doesn’t go quite well especially if you’re looking for a long-term setting. Further, relying on pirated version can have its own set of cons like –
- It triggers a cycle of data corruption
- You fail to get any tech support for software issues
- There’s a limitation on how many users can work on the tool at any instance
- It doesn’t allow you to run multiple copies & is executable only on one device at a time
- You are vulnerable to software raids that cost crores in fines
Why Cloud-based accounting software?
Given the general drawbacks of offline accounting software, it’s best to implement dedicated cloud-based accounting software for your bookkeeping tasks. These cloud software’s are easy to start with due to the following reasons:
- They don’t require any installation, but a simple sign-up online and you can start uploading your transactional data
- No hassle of remembering to manually update the product. Online software’s are always up-to-date
- Anytime, Anywhere access is no longer a dream. Cloud-based accounting software features also include allowing its users the option to access the software from any internet-enabled device
Benefits of Online Accounting Software
There’s no denying to the fact that cloud technology is revolutionizing our daily lives on both the personal and professional fronts. Today everything is available & accessible to us at the tap of a single button. From project management to social media, everything is happening in the cloud.
But can the same be said for business tools and accounting software? Yes, definitely, since one of the recent & emerging trends in accounting includes the usage of cloud-based accounting software. Every day a greater number of enterprise owners are stepping forth and starting with the cloud to manage their financial affairs owing to the multiple benefits these software offers.
If the bookkeeping process seems overwhelming and tedious, and the thought of creating financial reports frustrates you, then it’s time to consider opting for a cloud accounting software. Cloud-based accounting software available in India helps streamline your accounting processes and it will benefit your organization in various ways.
The key benefits include:
With desktop accounting software, security is a major concern since all the data is stored on local hard disks. As users often share the data through USBs or via email, there’s always a risk of data getting corrupted due to virus intrusion further compromising the data.
However, no such issues pop up on cloud accounting software as your entire data is stored on remote servers with world-class security protocols. The entire data is encrypted online safeguarding the data contents and users also need to login into the cloud software to access the data.
Offline or desktop-based accounting means heavy expenses in the right hardware as you need a proper server at your workplace to manage the software and the data it holds. You also need to hire and pay an IT expert to regularly maintain both the server and your office network which is nothing but an additional expense.
Online accounting software, on the contrary, needs no such infrastructure setup as everything runs online. You simply pay for the license fee including the GST applicable with no hidden charges whatsoever. Another significant benefit is that they allow flexible monthly payment helping you manage your business cash flow. However, if you go for yearly payment upfront, you can also benefit from a discount.
- Easy Sharing and Collaboration
Not so long-ago business owners relied on old, desktop-based software for managing their accounts. The limited accessibility made sharing and collaboration between the users a tedious task as it triggered a series of emails back and forth between multiple parties or saving the data on USB drives which were again time-consuming. Thus, to minimize the overall processing time, the concept of cloud accounting came up.
By incorporating cloud-based accounting software in your operations cycle, you can instantly share your financial records with your business partners or advisors from any geographical location & mutually work on it. You no longer need to transfer bulk files via e-mail or rely on third-party tools for sharing as everything can be accessed using the cloud.
Online accounting software is perfect if you don’t like compiling financial reports. This is because the software will store all your financial information on the cloud, and it can be accessed from any location as long as there is a basic internet connection. You can set up access for your accountant, this will help them log into the software whenever they need it.
- No Hassle of Manual Update
Do you remember the time when you used to take a daily backup of your work or manually update the software every time a new version got pushed out by the vendor? If you do, then you clearly understand how time-consuming and full of boredom the entire process was. However, if you’re using a cloud platform, backup of data and manual software updates are a thing of the past.
Timely backups, auto-save functionality, data encryption, automatic software updates are some of the most common accounting system features that you can take the benefit of while using cloud software. On a cloud, you are always logged into the latest version of the software and you also get real-time updates to your data saving both your time and money.
- Paperless and Minimal Discrepancies
If you regulate your finances using old school techniques aka a pen-paper methodology, you give open & unauthorized access of your confidential data to everyone and run the risk of losing it. Anybody who gets a hand on your data can misuse it for illicit purposes, harm your financial status and hence you constantly have to safeguard your accounting data from prying eyes.
However, with cloud-based accounting software, you can easily manage your entire financial documentation online making the environment go paperless. The software also minimizes your manual errors and you’re able to see results in a faster, more efficient manner allowing you to stay abreast with your finances.
- Easy GST Compliance:
Many small business owners dread filing their GST returns, and they want to make it as easy as possible. So, to make the filing process easy you can consider using a GST enabled online accounting software because it will automatically apply GST to all your invoices. The software will allow you to store, srt and retrieve important financial documents when you have to file the returns. The accounting software features will also include a reminder that will help you file the returns. All you have to do is set up the software by entering the monthly, quarterly, and yearly dates for the GST returns.
- Automatic workflows:
Cloud-based accounting software will help save time with automation. Most accounting system features include accounting solutions that let you come up with automatic workflows that will help save time and increase productivity as well. For instance, a cloud accounting software will allow you to send recurring invoices to customers.
- Real-time data:
Indian cloud-based accounting software helps you connect your bank accounts and it will help you track inventory, expenses, and sales. If you keep all the information up to date, regularly, then the data shown on the software will be portrayed in real-time as well.
- Accounting software boosts accuracy:
Once all the financial data is stored in one place, all you have to do is enter the necessary information in one place. With the right software, you lower the risk of accounting errors. Cloud-based accounting solutions are easy to use, they let you enter expenses and income, and you can categorize all the transactions according to date or vendor. Hence, whenever you pull any financial reports you will know that the information is correct. To get accurate reports, you have to ensure that the information is entered regularly.
Planning to switch to a Cloud-based Accounting Software? Keep These 4 Pointers in Mind
Having understood how cloud-based accounting software can benefit your organization and manage the complete financial data, it’s time to make a purchase. But wait! How will you pick the best of the lot from the plethora of options out there? How will you figure out which tool would fit best as per your requirements?
Understanding the gravity of the problem & your dilemma, we bring forth this segment wherein we would highlight some of the key pointers you must consider before making the final purchase. Let’s check out each pointer in detail here:
- Budget Constraints
No two businesses can ever run on the same financial budget. The budget of each organization varies based on their business type, the market size they capture, the infrastructure, and more. You can find multiple business accounting software available outside that fits all budgets, so take note of your budget, the features you need, and accordingly make a choice.
Once purchased, you can easily customize it according to your business requirements. The higher your budget, the more benefits and customization options you’ll get. Always prefer taking up a trial of each accounting software so that you have a basic idea of what all features you’ll get after the purchase.
In most cases, basic accounting software can easily take up all your financial reporting, billing and invoicing, and that is what most businesses look for in software. Ensure that your chosen software can perform the following tasks:
- Creating invoices
- Generating financial statements
- Paying the vendors
- Recording all customer details & history
- Bank account integration
Also, take note of the additional costs that you might be charged later. Some software asks for additional fees while providing you services like invoice creation, customer service, etc.
- Easy to Use
Another prime factor that you must keep in consideration is whether the software is easy to use or not. The software should help both the financial professionals and even the ones who are quite new to accounting. Before purchasing any software, you must check if it comes with a dedicated dashboard or not, if it’s easy to set up and can be managed on a day-to-day basis or not.
Having a unique dashboard at the forefront is a signature sign of the software being user-friendly. Such software allows you to keep a tab on the financial status of your company, invoices owed to the firm, bills that are due, and even shows you the list of user activities all in one place. The idea of using such accounting software is to simplify your bookkeeping & accounting tasks and not complicate it further. Another benefit that a user-friendly accounting software gives you is the ability to make smart financial decisions. You must also consider whether your chosen software provides free resources & customer support for additional help. If not, then clearly it isn’t your best bet since you can’t invest all your time in learning the nitty-gritty of the software.
To ensure that you are choosing nothing but the best online accounting software for your business, you must have a clear idea about how you want to use the software, where to use it, and who else will be using it. Some usability factors that need to consider if you are planning to purchase the best accounting software in India are as follows.
Multiuser Access: Generally, accounting software support multiuser access, where you can invite other users to the system and allow them to access their tasks and control some part of the data. For example, you can provide complete access to your business partner while enabling partial access for a certain department where the members can only track their time and invoice customers.
The pricing plan is set accordingly. Some software may allow you to invite multiple users without any cost, while others may allow you to provide free accountant access and charge extra for adding other users to the system.
Multiple Business Support: An accounting software can help you to manage multiple small businesses under one account without any additional charges. In other cases, you may have to spend extra on setting up separate accounts for each business.
Cloud-Based Software: Almost all of the accounting systems are cloud-based. So, you don’t have to worry about accessing your account from any place or time. All you need is a computer or device with internet access and you can run your business remotely from any corner of the world.
Carrying out your tasks on the go has been an emerging trend in accounting and financial management, and much cloud-based accounting software also offer a mobile version or apps to help you do that. Besides, some offer different apps with access to limited accounting software features like time tracking and submitting expense receipts. An important point to note here is that the features in mobile apps can vary. So, if you want to invest in a mobile app, first check whether it can support the functionalities that you need rather than just following the recent trends in accounting. You will also have to ensure that it will work on the platform that you prefer to use for your business processes.
- Cross platform compatibility
If you travel a lot due to work commitments, then relying on online accounting software is your best option. By using a web-based accounting software using an internet-enabled device, you can easily collaborate with your entire staff, keep in touch with your financial data on-the-go and share invoices with your clients without geographical location posing a hindrance.
Two additional benefits that online software gives you is the ability to share financial reports easily with other users who can easily access it from their respective locations. It also encrypts your data on a centralized repository online safeguarding your data from unauthorized access & virus intrusion which is quite normal in the case of desktop software. Cloud-based tools like Giddh only require a browser, irrespective of what device you are using, in order to function.
- Secured Environment & Auto-backups
With technical advancements, there’s a considerable rise in the cybercrimes cases and this makes people skeptical to store their data on online servers & they constantly live in the fear of losing their data. Hence, if you’re planning to opt for accounting software, pick one that comes embedded with advanced data security and encryption functionality. Also, ensure that the software comes equipped with Data backup & restoration ability to keep your data secure & intact even in the case of unwanted data loss.
Generally, advanced protocols set at TLS 1.2 Transport Security with AES 256-bit encryption (HTTPS at SSL level) and backup frequency (set as per your requirements) are ideal choices and ensure that your data is offered the highest levels of security.
When you are planning to invest in accounting software, talk to your software provider about their pricing plans in detail. Some providers may charge extra for up-gradation or support, while some may offer a basic software for a low price and then charge you for add-ons and maintenance. So, it is better to ask them questions regarding every feature and cost associated with the software that you want to go for. Moreover, you can also go to their website and check their pricing page. Any additional accounting system features and services they provide will probably be mentioned there.
This is something that individuals often tend to overlook when they are purchasing an accounting software. Even if you have chosen a high-quality software program, you will definitely come across a point where you will need support. Sometimes, you might also need support right after you buy the software.
Cheaper software programs usually do not offer support as an inclusive feature. In this case, you can pay extra for after-sales support as it will be worth the money. If you wish to check the quality of the support they claim to offer, try to make a call to their support line or drop them a message. Based on the time they take to respond to your query, you can judge how their support operations are going to be.
Picking out the right software – one that meets your business needs isn’t an easy ordeal & requires you to understand what is accounting and also put in equal efforts and finances. So, don’t rush while choosing a particular software as once you make the purchase, switching to another accounting system won’t be easy.
Giddh, one of the best cloud-based accounting software in India, provides you powerful solutions, encompasses features like bank reconciliation, invoicing, etc. and is your go-to place especially if you’re a small or medium business owner in India & are looking for cost-effective alternatives to manage your financial data.
The pricing structure of Giddh is quite user-friendly and is categorized into three parts based on user demographics. If you’re a teacher/ student/startup, you can use Giddh for FREE for up to 500 transactions. The second tier includes CAs, NGOs, CS folks who need to pay INR 800 per organization/year for transactions up to 10,000.
Growing businesses who’re dealing with 40,000 transactions on an average need to shell out INR 4,000 per organization/year and if you’re a multinational enterprise, reach out to Giddh directly for pricing details.