All company transactions are meticulously documented in the accounting books. Nevertheless, as companies grow larger, their transactions become increasingly substantial and complex. Consequently, manual recording is no longer as effective, often leading to data inaccuracies. Presently, numerous companies in Singapore employ an accounting software. Xero, Quickbooks or Wave, to name a few, streamline the documentation of their financial transactions.
Accounting software, in essence, is a specialized system designed to gather and report information pertaining to financial activities. This adoption of accounting software offers various advantages, including heightened effectiveness and efficiency in financial control. Furthermore, it ensures more precise data and facilitates automatic calculations. The most significant advantage lies in the ability to generate real-time transaction reports.
For further insights into accounting software in Singapore, please read on below.
Accounting software explained
An accounting software serves as a powerful tool for efficiently managing and documenting an organization’s day-to-day financial transactions. Its functionalities encompass diverse tasks. Part of this is overseeing fixed assets, controlling expenses, monitoring revenue, managing accounts receivable and accounts payable. Moreover, it include subledger accounting, generating comprehensive reports and analytics. A robust accounting system is specifically designed to monitor an organization’s assets, liabilities, income, and expenditures.
These financial transactions are promptly recorded in the general ledger, which gives CFOs, treasurers, and controllers immediate access to precise, real-time financial data. Additionally, it equips P&L (Profit and Loss) stakeholders with valuable insights into their operational-level performance.
By systematically recording these financial transactions, organizations can produce quarterly and annual financial statements, including balance sheets, income statements, cash flow statements, and statements of stockholders’ equity. Accounting software serves as an indispensable component within the framework of an enterprise resource planning (ERP) system.
ERP systems consolidate critical business functions, encompassing accounting, financial planning and analysis (FP&A), supply chain management, inventory control, and procurement. These applications are seamlessly integrated into a unified user interface and data model, eliminating the need to switch between systems or integrate isolated data sources when managing various aspects of your business.
Basic components of an accounting software
Accounting software plays a pivotal role in enabling organizations to streamline their day-to-day business operations, ensuring that business leaders maintain a firm grasp on their company’s financial well-being. Here are its basic features:
a. General ledger (GL) and subledger
Majority of the latest accounting softwares facilitate both manual journal entries and automated subledger entries, populating the general ledger in real time. This empowers managers and controllers with an updated financial overview.
b. Accounts payable (AP) and accounts receivable (AR)
A comprehensive accounting software solution extends beyond mere fundamental accounting tasks. It aids organizations in minimizing redundant record-keeping, enhancing budgeting and forecasting processes, and facilitating meticulous and well-organized expense management. Furthermore, it seamlessly integrates with banking systems, ensuring more precise audits and maintaining exhaustive tracking records for both assets and liabilities.
Features and Advantages of an Accounting Software
A comprehensive accounting software solution goes beyond basic accounting functions, minimizing redundancy in records, enhancing budgeting and forecasting, and enabling meticulous and well-categorized expense management. It seamlessly integrates with banking systems, streamlines audits, and maintains detailed records of assets and liabilities.
Accounting software’s cash management capabilities ensure accurate cash position tracking by automatically reconciling cash transactions with bank statements. These features enable companies to make timely decisions regarding investments, borrowing, and other cash-related matters through automated cash forecasting based on payables, receivables, payroll subledgers, and external transactions.
Modern accounting solutions facilitate the complete financial lifecycle management of assets, encompassing acquisition, capitalization, depreciation, and retirement. This comprehensive visibility aids businesses in providing accurate financial statements related to asset appreciation and depreciation.
Risk Control and Compliance
Incorporated security, risk management, and audit controls within accounting software act as a robust defense against fraud and unauthorized user access. These internal controls and separation of duties (SoD) ensure compliance with Sarbanes-Oxley (SOX) regulations while providing a secure, authoritative data source for enterprises.
Credit and Collection Control
Effectively managing customer collections is a vital capability of accounting software. A comprehensive collections management system simplifies customer ranking, strategy establishment, payment management, and late-stage collections for financially distressed customers.
Embedded revenue management capabilities within accounting software automate the use of analytics to maximize revenue and profitability.
Reports and Data Analysis
A complete accounting system not only records financial transactions but also incorporates reporting and analytics features. Pre-built dashboards enable finance leaders to gain a deeper understanding of their organization’s financial health and access more detailed information. These dashboards measure critical financial KPIs in real time, including current ratio, quick ratio, debt-to-equity ratio, net working capital, and inventory turnover, among others.
Productivity Solutions Grant for Xero Accounting Software
As a certified Xero Advisor and pre-approved vendor for the Productivity Solutions Grant (PSG) in Singapore, Aura Partners has over 10 years of experience providing top-notch accounting and corporate services to SMEs across various industries. It’s expertise includes Xero accounting software implementation and training, bookkeeping, payroll services, GST registration, corporate secretarial services, company registration in Singapore, and more.
Take advantage of the Productivity Solutions Grant (PSG) from the Singapore government, which provides financial support for eligible companies to adopt pre-approved IT solutions and equipment aimed at improving productivity and streamlining business processes.
By adopting Xero software, businesses can simplify their accounting needs and make tax returns a breeze, freeing up valuable time to focus on revenue growth. As a pre-approved vendor, we are well-equipped to help SMEs transition to cloud technology for their daily tasks such as bill payment, expense tracking, bank account integration, payment processing, invoicing, and more.
Find out if you’re eligible for the grant and learn more about the application process by contacting us Our Xero-certified accountant is here to help with all your queries. Our team experts are happy to work with you for your accounting requirements as well.