The Future of Accounting Software

A lot of systems are going to fall is the prediction.

As accountants, 50% of all UK practices are using IRIS (2011-12), usually linked to Sage line 5o for book-keeping.    And there are so many other systems out there that I could name that are used by the masses.  Here is an intial list: http://en.wikipedia.org/wiki/Comparison_of_accounting_software

I have personally worked with everything from Oracle to Excel, from MS Accounting to the new free online PHP MYSQL driven Front Accounting and experimented with a whole lot of others.

The mechanics remain the same and they are of course trying to achieve the same thing.  Primarily that is to accurately account and to produce valuable and timely information.

What happens next?

There are several characteristics that are here to stay, and if they are not inherent in the accounting packages of the future, then package will disappear , or at best shrink considerably  and all pretty soon.

In my humble opinion these are:

  • In the cloud.   The advantages are obvious.  Employees or outsouring contractors like us can immediately access this from anywhere in the world.
  • Multi-user.  If several people cannot work on it as with some packages, they will only remain for very small businesses.
  • Security.  I believe 32 Bit encryption for all to feel safe, is the present standard until those clever hacker chaps find a way to crack the code. This battle will go on.
  • Primary document upload facility.  All transactions need to be backed with primary documents such as invoices or sales receipts.  This needs to be smooth.
  • Drill down.  They will need to be attached to the document.  What we call the “Drill down facility” is a must.
  • Not Too simple.  It needs to report the tax position as well as other standard financial measures that I will not elaborate on.  Visual Graphs and sound incorporation is advantageous.
  • Not to complex.  With tax changes coming into force each year, and slower changes in Accounting Standards, making the package too “fixed” is a bad idea.  It needs to be somewhat flexible, so that it can change quickly.
  • Speed of process.  The scan and save uploads need to be fast, as well as entering journals and corrections.
  • Accurate.  Obvious, but I have seen all too many software patches that have needed to rectify a coding problem.  A turn off.
  • Easy downloads.  Accountant train and go to their exams with papers and pencils.  They double check the formulas and figures in the same way.  They usually download an extended trial balance and explore tax advantages using excel.
  • Easy iXBRL file interlink.  Submitting all returns to the government is compulsory now.  Some accountants do this manually, whereas some rely on automation.  Both have advantages and disadvantages.
  • Easy to Audit.  That opens another can of worms entirely.
  • Future Proof.  That is that it should evolve with the times.  Already there is talk about integrating all transactions into one hub and do away with double entry altogether.   Inherent problems with that.  Similar to why we will never go to a cashless society either.
  • World Stage.  The champion will have world vision.    The package should be able to mold fast with the rules and regulations of each country around the world.

Any Accounting developer that might by chance  come the above might think “Not too simple….Not too complex…..That’s not fair????”.   Sorry about that, but that is how I see things.  The middle road no doubt as with so many things.

There is plenty of scope for the most energetic company to take first prize, since I still have not seen one package that does it all.

Do watch out for my guide to “choosing the right Accounting package for you”, a pdf download to all newsletter subscribers.  Do register if you like the article and interested to hear your views.

http://www.vnaccounting.com/LandingPage.htm

Some other good blog that I found and that try to look further:

http://www.cloudave.com/2673/the-future-of-accounting-guest-post-rod-drury/

Vishal

http://www.vnaccounting.com

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