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Accounting Software – How to choose the right accounting software for your business?

Accounting Software – How to choose the right accounting software for your business?

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.

  • Expensive

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.

The key benefits include: 

  • Security

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.

  • Pocket-friendly

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.

  • 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.

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.

  • 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.

Conclusion

Picking out the right software – one that meets your business needs isn’t an easy ordeal & requires your 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 – an online accounting software 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.

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