To answer this question one needs to understand what these softwares are exactly. Accounting has somewhat stayed limited to traditional book keeping in many businesses, especially the small ones. The traditional way of maintain ledgers is very cumbersome and error prone. Add to that the need to hire an accountant to help with the tax returns filings and help with determining the cash flow and profits.
In the digital age, many accounting software have cropped up on the market that have given the whole book keeping a new look and meaning. These software are quiet easy to understand and use. Use of accounting and inventory software reduces human error in the accounts and eliminates the need to hire an accountant separately to handle the financial affairs of your business.
However, the most important question that crops up in the owners mind is, why should I switch to automation and buy software?
Many organizations stay with their current accounting system too long. It's comfortable to use something that's known and understood. There's usually fear involved (or atleast a strong apprehension) with switching to something new and unknown. Plus, there are significant time and resource issues, including the cost to change and the time needed to learn the new system. But comfortable doesn't always cut it — especially when it comes to the financial health and long-term success of your business.
In order for a system to meet your business needs, it should mesh with your existing business practices and adapt to technological innovations. Ideally, you want software that's simple, intuitive, and closely matched to how you already do business. The system can:
The price of automation is generally perceived to be high. However this is changing fast with the emergence of new, efficient and relatively cheap accounting and inventory softwares.
Such software also help owners get a good picture of the sales forecast, stocks in the inventory, and some softwares pinpoint to what are the least profitable services in your business. With your accounting software, you could handle some bookkeeping tasks that you might otherwise outsource. That can save you money, especially if you don't have significant bookkeeping needs and if you have someone who can handle bookkeeping tasks in addition to other duties.
Using accounting software enables businesses to:
If your existing system isn't fulfilling all those objectives, it's time to seriously consider a new one.
As many would say, the keyword for running a business is selling. Is it?
Well maybe. But what about the products that have to be sold? Make no mistake, your inventory is very very important. Just imagine your business without a good inventory management system.
Pilling sales due to items being out of stock, funds blocked in overstocked slow moving items, disguised gross losses due to incorrect pricing and inventory costing, unreported frauds and thefts, skyrocketing warehouse costs due to unplanned and mis-calculated order quantities, unforeseen production pauses due to non-availability of raw materials, loss of customers due to non-servicing of sales orders and the list goes on and on.
And then to think of more than one warehouses, production units, and branches not to mention goods in transit with multiple logistic partners, sales and purchase returns, samples received or sent, stock lying with job workers, work in process materials, purchase orders not yet received and the lost again goes on and on.
Is any business capable of surviving the lack of a good inventory management system? I don't think so. So unless you are planning to walk around your warehouse twice a day counting the quantities of every item in your stock and unless you have the memory of an elephant to recall this on your fingertips every time the telephone rings with a customer on the other side, you need to go out there and get yourself a good inventory management system.
An inventory management system impacts more areas of your business than you think. It is not merely about entering a set of keys to generate a list of your stock at the day end. It is about integrating your purchase, production and sales to get a comprehensive picture of your business at any given point of time.
An inventory system is the blood flow of any business which connects the brain with the heart.
Once upon a time, maybe as back as the Indus Valley Civilization, people discovered that if they have excess quantities of one item, they can exchange it with excess quantities of another item with some other person. This exchange came to be known as business and the medium of exchange quickly came to be known as money. Yes, there existed a time when business was as simple as one man buying multiple quantities of a product and displaying it for sale in the 'Bazaar'. Willing customers would walk upto to his shop. If they saw the item they liked, they would buy it. The business man would then close his shop at the end of the day, count his income and go home a happy and content man.
The 21st century business has come a long long way from that. Today we plan, we strategize, we do market and customer survey, then we invite investments – we take loans from banks, we do cross geography purchase and sales, we have post sale services, we have supply chain management, we have business risk assessment, we have accounts that need to be audited, we have forms that need to be filled, we have orders that need to be serviced on time. And then there are tens and hundreds and thousands of vouchers that need to recorded and approved and retained and MISs to be generated and stock to be managed and employees who have to recruited and managed and paid at the end of every month and taxes that have to calculated and paid before their respective due dates. Accounting and Inventory software can be as simple as a book keeping tool or as complicated as a multiple place of work supporting - real time processing - Enterprise Resource Planning tool. The type of Accounting and Inventory software that a business uses depends on its size and industry and geography of functions but what remains constant is that for a business to survive, this accounting and inventory software is inevitable. It is the backbone that keeps the business standing. It is one item which is no longer a luxury.