Accounting software is now less of an electronic bookkeeping system and more of a business management tool, according to Softline Pastel MD Steven Cohen.
He says a longstanding source of management frustration has been the separation of the accounting database from the remainder of the business.
"But the accounting system keeps the business functioning and we're starting to see software that uses accounting information as the foundation on which to build other applications such as customer relationship management (CRM)."
He says modern business can no longer function with a wall between the accounting data and other critical data such as customer information, helpdesk management and credit control.
It is important for a company to be able to communicate with its customers and staff, he says. "This is why more organisations are configuring their IT systems to make the accounting software database, the central application from which other business modules extract their information."
Cohen says modern accounting systems are able to provide executives with powerful analytical tools. "Using the information contained in the accounting software, decision-makers can extract important patterns in their business. For example, you can ask the accounting system to show you your 100 most profitable customers and where they are situated," he says.
Logistics planning, including transport and warehousing, benefits from the use of accounting software. Delivery time can be reduced and product shelf-life extended.
"People are looking for more control over their businesses and they get it by building processes around their accounting software," says Cohen.
Accounting systems are moving away from their traditional paper-based format into an electronic form. The Electronic Communications & Transactions Act, introduced about a year ago makes certain electronic documentation legal.
Cohen says that as with any electronic communication, there are threats.
"Network security needs to be tight in the online world. Accounting information is particularly sensitive and needs to be protected. The same is true for payroll software, which contains confidential information about employees.
"And it's not just data thieves or hackers that are a problem; computer viruses can wreak havoc with a company's accounting system if it is not well secured and managed," says Cohen.
He says accounting software has evolved slowly over the past two decades but a big change is taking place now. "In the early days, accuracy and efficiency were the most compelling reasons for companies of all sizes to move their accounting systems from paper to computer. But it took a long time. By about a decade ago most firms had accounting systems and in smaller companies, these had moved from the character-based Dos environment to the colourful and graphical Windows environment.
"Now the pressure was on for developers to help companies make their accounting systems even more useful. Accounting software was made compatible with Internet banking systems - that was a big step. The company's accounting information could be measured against transactions. And companies had a way of sending their accounting information electronically to accountants.
"Developers are now working on making accounting software the centre around which other programs run," says Cohen.
It will probably take a long time for larger companies to move away from their existing enterprise application software systems. But smaller companies are likely to add services such as CRM to their accounting systems and use accounting software as the central IT pillar of their businesses. In 20 years, accounting software has moved from a "nice-to-have" to the dominant business management tool.
