So I have an Accounting Software Program: Now What?

Perhaps, your company has grown and is now in need of a professional grade accounting package. Or maybe you just accepted a position that requires you to work with the accounting package and you feel out of your comfort zone.

It's perfectly understandable! These packages can seem a little intimidating with their various modules and functions. Especially, if you do not come from an accounting background but, once you get the hang of the terminology and understand how the various parts work together you will wonder how you survived without it.

The Basics

No matter what package you choose, be it MAS 90(or any of the Sage Software later releases), Open Systems, Intelevent or any of the other packages out there, they all contain the same thing; modules that allow you to enter and manipulate data.

While most accounting packages are windows based and very user friendly, you may encounter a few older versions that are DOS based and use the keyboard to maneuver around. Either way, you will go into various modules to enter or retrieve the data.

What is a Module?

The modules are little stand alone data entry programs. The most common modules are: general ledger, accounts payable, accounts receivable, inventory, and payroll. Although, depending on your industry there may be a few customized modules, such as purchase orders or work in process.

It is possible to have a full accounting package and only use a few modules. For example, a company may choose to use just the payroll and accounts receivable modules. Utilizing the payroll module would allow the company to cut checks and have employee information with a few keystrokes, saving the expense of jobbing it out to ADP or another payroll processing company. As for the accounts receivable, they would be able to generate invoices and post payments, affording them much quicker turnaround from invoice to payment.

The General Ledger

Still, one of the reasons a company switches over to a fully integrated accounting package is the ability to "post" the various totals from each module into the general ledger. The general ledger is where all the information for financial statements comes from. Once a company begins posting items into the general ledger all financial statements can be generated right at the office.

Does this mean your company can do away with outside accounting firms? No, most companies still rely on an outside firm to check for accuracy and verify/sign off on the financial papers.

Easy Tracking of Cash

Another important reason to have all the modules operational: it makes it even easier to track money in the bank. When the modules post into the general ledger, it allows you to do bank reconciliations within the accounting package. This means the company can track its cash position at all times.

Accounts Payable

If a company brings the accounts payable module online they will be able to quickly generate accounts payable checks, have access to vendor information and track monthly expenses.

Purchase Order

Usually, a purchase order module is used hand-in-hand with an inventory module. Purchase orders make it easy to track open orders and know exactly when an item needs to be reordered, a great money saving feature.

Inventory Control

A company can control inventory much better with an inventory module. If items are correctly entered with inventory numbers through accounts payable and purchase orders, what is on the books should be what is on the shelf. Items can also be sold out of inventory through the accounts receivable module.

Administrator Controls

If more than one person will be using the package, it is good to know that most accounting programs allow an administrator to control access to the various modules. Access to the various modules will only be available to those authorized to have access to that information.

Reporting

There is also no end to the various reports that can be found in accounting packages. Budgeting and forecasting are easy as 1, 2, 3. Most reports can be customized to give you any range and scope that is necessary for your business.

Of course, setting up a fully integrated accounting package requires a lot of data entry. It also requires setting up rules and parameters, such as no longer handwriting checks or paying bills from petty cash and all cash receipts must be entered into the system. Even with all the work associated with bringing the accounting package online, it will pay off in the long run. Quicker access to financial data and the ability to forecast and budget will help the company remain in a strong financial position.

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