What is Microsoft Accounting Software? (With Examples)
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Accountants often rely on tools and software to help them perform their jobs, such as bookkeeping, filing taxes, financial forecasting, and compiling financial reports. One of the many tools that accountants might use is Microsoft (MS) accounting software. Understanding what MS accounting software does and how accountants apply the software in their daily responsibilities can help you perform your job more efficiently and accurately. In this article, we explore what MS accounting software is, the benefits of the software, and examples of why accountants choose this software.
What is Microsoft accounting software?
There are several accounting products for businesses and individuals, one of which is a Microsoft accounting software called Dynamics 365 Business Central. This software can help businesses compile and visualize business insights, such as financial performance, business performance, reports, and cash flow forecasts. Businesses also use this software to track vendors, expenses, and invoices to the business or a third party. Not only can a business customize their dashboard to their specific needs, but they can also choose industry-specific applications to help scalability and growth. It keeps financial data safe against unauthorized access and cloud storage for efficiency and security.
As an accountant, it's important that you have access to the business or client's financial data wherever you are. Dynamics 365 Business Central allows you to operate and help the business grow from a single unified platform that displays the essential information to help the company's clients. You have access to financial account balances, information from transactions and account activity, payments information, and financial documents. You can also have access to graphs of current financial performance, such as gross margin, operating margin, cash cycle, revenue, expenses, and earnings before interest, which can help with filing taxes.
The benefits of using MS accounting software
Accountants experience many benefits when using MS software, like Dynamics 365 Business Central, during their day-to-day operations and activities. This software can save them time and reduce errors from manual financial entries and reporting. It can also help them perform their jobs better, which increases business profit, growth, and customer satisfaction. Here are some of the specific benefits of relying on Dynamics 365 Business Central as an accountant:
Reduces manual labour
Before the introduction of accounting software, accountants relied on manual labour and methods for recording financial transactions, such as revenues and expenditures. Processing invoices and gathering information for financial reporting were time-consuming activities. This also meant that accountants may spend fewer hours interacting and helping the business or its clients. Manual labour usually creates wasted time and effort and also brings in the possibility of errors.
Accounting software can help accountants digitalize many processes that can otherwise require several hours to perform manually. The software can also complete many tasks simultaneously, such as compiling expenses and visualizing the information in a series of graphs and diagrams. This can help you save time on mundane tasks and allows you to concentrate on using the information you receive to make strategic decisions and provide useful advice to the business or its clients. Accounting software also has processes to verify the accuracy of the information you enter and automate tasks to reduce errors in the financial data.
An accounting firm might hire many accountants, depending on the types of services they provide to clients and the size of the business. This creates operating expenses because of the amount of money the business pays for salaries and wages. If the company requires accountants to work extra hours or if the firm is growing at a rapid pace, that furthers the expenses required for human resources. These human resources expenses can limit the profit potential of the business.
With the help of accounting software, the accounting firm can automate many of the tasks that the team of accountants may perform. Some of these tasks include tracking expenditures, visualizing profit margins, and forecasting future financial performance. There are fewer accountants required for financial oversight and performing daily responsibilities, and more employees to focus on providing valuable services to clients. This can reduce the time spent on administrative tasks, which reduces overtime hours. It can also allow accountants to focus on the activities that generate more profit and clients for the business.
Reduce financial errors
Financial errors can cause consequences like profit loss, loss of clients, and inaccurate information used for reporting and forecasting. These errors can cause significant damage to the long-term growth and success of a business. If accountants rely heavily on manual methods to perform their daily responsibilities, there can be errors such as duplicate bookkeeping entries, missing invoices, and inaccurate transaction records.
By using accounting software, accountants significantly reduce the possibility of errors. Accounting software usually helps simplify accounting tasks, making it manageable for you to perform complex calculations. It can also allow you to verify the information you input. Most accounting software shows where errors occur in your financial reporting and what you can do to resolve the error. This helps you validate the accuracy of your financial information, which reduces the number of errors and allows for accurate decisions and auditing.
Ensure compliance and transparency
Compliance and transparency are important for any business. You want to ensure all stakeholders in the business and client list have accurate and complete access to the information they need. Transparency helps you create a healthy working relationship with the clients and other departments within the business. It also ensures employees in other departments have the information they require to perform their duties accurately and efficiently. The accounting software provides all stakeholders with access to the information that the accountant sees. This is essential to operate a business that can efficiently scale according to the rate of its growth.
Businesses require compliance to ensure accountants are following proper accounting and tax laws. This is especially important when accountants are subject to audits and regulation checks. Otherwise, there might be penalties and fines. Most accounting software easily check reports and tax information before filing to ensure information is accurate and reported correctly.
Maximize the security of financial information
Financial records are confidential because it contains sensitive information like vendor and third party names, transactions, invoice IDs, account numbers, cash balances, and financial performance. It's essential to protect these pieces of financial information to ensure the security of clients and the business. Most accounting software has highly effective security measures in place to protect the financial data you manage on behalf of the business or its clients. These measures ensure the business stores the information correctly and authorized individuals have access to it.
Essential uses for MS accounting software
There are many use cases for MS accounting software like Dynamics 365 Business Central. It offers accountants a variety of functions that help them perform their daily responsibilities according to the specific needs and high standards of the business or clients. Here are some examples of why accountants choose MS accounting software:
Businesses have many incoming and outgoing invoices that the business prepares for partners, clients, and third-party vendors. Dynamics 365 Business Central has an invoicing feature that allows accountants to monitor all invoices associated with the business and its stakeholders. You can have access to the vendor list, the number of payments approved or pending, an invoice number and date, the transaction on the invoice, and the cash balance of the invoice.
Accounts receivable and accounts payable records
Accountants usually track the expenditures that the company or its clients receive and the incoming sources of revenue. Accounting software can make it easy for you to record these transactions. With this software, you can record the amount and date of each account receivable and each account payable.
Future financial performance forecasts
Accountants use financial data to forecast the company's future financial performance. Dynamics 365 Business Central allows you to visualize and forecast cash flow, cash cycle, days of inventory outstanding, total liquidity, and total accounts payables and receivables. Businesses and clients rely on this information to make strategic decisions about investments, company direction, budgets, and operational activities. Financial forecasts can also help businesses better plan the goals they want to set for the next year to further their growth and improvement.
Purchase and sales orders monitoring
A purchase order is an order that a business makes with a vendor or third-party company. A sales order is an order that a customer makes with the company. Accounting software helps you monitor the purchase and sales orders in a centralized location so you have records for bookkeeping and reporting.
Please note that none of the organizations mentioned in this article are affiliated with Indeed.
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