Can an Accounting Software Replace Accountants?

Can a non-professional use an accounting software for accountants to manage business finances? Yes, he/she can, given the business is young and the customer base is limited, or the processes are simple. With a cloud-based accounting software, setting up a business, creating a couple of GST-compliant invoices (even for multi-currency transactions), keeping a record of payments, expenses, receipts, revenues, calculating profit and loss figures etc can be handled without assistance. However, with rising financial complexities resulting from an increased supply and demand, assets, stakes, investments etc the need for a professional accountant becomes inevitable.

We will illustrate why you would eventually need an accountant for your business. In fact, you might want to consult one from the very beginning, at least on a part-time basis if not full time.

Application

An accountant takes views on statutes and applies them. This is where judgement is involved which is developed through years of practice and expertise in the field; this includes Tax judgements and making sure that business processes are compliant to the Indian Accounting Standard. Apart from that, keeping a complete record of the organisation, its workforce, its current shares and stocks, position of stakeholders, directors and partners etc and matching them to the existing legal structure, preparing annual statements are some of the heaviest tasks of accounting. Delegating these tasks to a professional will ensure the smooth operation of your firm.

Keeping your Business in the Good Books, Literally

You can feed a cloud-based accounting software for accountants with data in real-time. The most that a software can do is automate 90% of the data allotment and simplify complex calculations within a few minutes. However, when it comes to creating a consistent track record of your business, a process which is popularly termed as ‘smoothing’ in the world of accounting, you need to look for experts in the domain.

Business Developments

Let us suppose you are happy with the current state of things and in a good position to consider expansion. You need a business plan and being an owner, you are aware of the strategies. However, an accountant would be able to draw a map of your business in terms of projecting budgets, graphs, determining gross profit and gross profit margin, break even points based on which you should be able to build a fool proof strategy. You would also need an accountant’s assistance while buying or selling a business or a franchise.

Current Scenario

COVID-19 and the current economic situation has given rise to many accounting complexities which only a professional can navigate. This includes labelling assets as impaired which also has its direct impact on cash management, recognizing Deferred Tax Assets considering estimated revenues have undergone major disruptions, recording non-payment of loans and dues including statutory dues (in light of current relaxations announced by the government and regulatory bodies), and finally presentation of financial statements made already complex by so many unprecedented occurrences including the viability of recognized revenue and such. In these testing times accountants would play a crucial role as advisors and help a business build a continuity or insolvency plan (if that be the case).

So, if a business with a growth plan ultimately needs an accountant, what is the use of an accounting software? Does a small business really need it? Well, if truth be told, it takes some time for financial complexities to increase drastically for a small business. Till then you can depend on a smart accounting solution to manage financial records on your own. At the most you can hire a part-time accountant. With a cloud-based accounting software you can add your accountant as a user and provide access to your financial records remotely. This way you could save more money than you would by entirely depending on a full-time accountant. A smart accounting solution helps you be self-reliant till the time your business processes become complex.