The world is getting more digitized, Artificial Intelligence (AI) makes things easy in almost all sectors including Accounting and taxation. There are plenty of accounting softwares available in the market such as sage 50 which have pre-build accounting templates which makes the business owners and freelancers life easy so they buy and put the data in the pre-build accounting templates, automation make it more quicker and simpler and the job has been done, but practically it’s not that simple as we believe.
Accounting standards keep updating very frequently, IAS and IFRS have complex issues to be tackled which probably pre-build templates not cater easily. Also, it’s quite true thinking that the latest high-tech online software makes it easy to complete accounting, but when we talk about finance and accounts, we should be more careful as there’s always a risk of human error and at the end of the day you are responsible for this as stricter accounting, auditing and tax laws imposing and their scrutinization doing by the authorities. So why not make sure you have an expert on hand to provide you with an extra layer of assurance?
Smart technology and cleverness of algorithms make sure to prepare a complete financial statement, provide a range of accounting, there are still services offered by accountants that software simply cannot match.
Software versus accountant – the pros and cons
Budget, Time, and Experience
These are three major reasons which at initial point simply help us to decide what should we have to do, whether buying an accounting software with pre-build accounting templates is the good option or should we hire a professional accountant as software can be a cheaper option as need to pay monthly or annually for a cloud-based or in-premises such as Quick books, Sage 50, Tally ERP or Zoho books but also not cater all accounting standards and industries plus you need to put time to enter the data or even synch the data but need to overview closely.
So, if you have time, hands-on accountancy experience and small budget then software is the right option but again it depends on your nature of business, volume of transactions and applicable laws and regulations.
A professional experienced accountant has hands-on expertise and fully updated with the latest changes in the accounts and tax laws, so if you are looking for tax planning advice then hiring a professional accountant would be the right choice as compared to accounting software. Software can calculate the tax filing accurately, based on the data entered, but tax saving or tax advising would require a current scenario, specific to your industry under the applicable tax laws which an accountant can better advise.
Complex Accounting Issues
Accounting software are highly accurate and continuously updated by the experts behind these software companies but there are many transactions and accounting standards which state differently when applied in different industries and in different countries as GAAP and IFRS also have differences in calculating Fair value, intra-group transactions and many more cases. So, it is better to have an accountant to deal with these issues timely and ensure to prepare the Financial statements as per applicable standards.
Frequent Changes in Accounting Standards, Adding New concepts
Doing it by yourself requires time, not to put the data only but also updating yourself with the recent accounting standards, changes, and new concepts which most of the time business owners do not have time to do whether they prepare accounts on old concepts or make incorrect accounts. So, it’s recommended to hire a professional accountant, if you are running even a small business so you do not need to keep these hassles to yourself by reading all tax and accounts recent changes, better to focus more on business growth and revenue.
Compliance with Local laws and Taxation
A good professional accountant has more hands-on experience and is updated with the local laws and regulations, also aware of recent tax changes so he ensures compliance-based accounting and makes sure your business stays compliant and you are not overpaying or underpaying on any tax.
The guidance provided with the accounting software may be helpful as software is compliance based and updated frequently, however sometimes it takes a human expert to explain things in the most understandable way and apply an applicable scenario-based approach.
Financial and Investment Adviser
Accounting software can prepare the accounts accurately, but a professional experienced accountant would do financial planning for your business. He/she will be a great asset for you to allow you better understand the financial situation, have similar industry experience before, and advise you how to save money and where to invest so you get a reliable source for your financial and investment decisions.
Organizing Your Data and Continuous Support
A professional accountant not only keeps digital copies ready through software but also ensures hard bills arranged in the orderly form which helps in auditing and tax surprise visits too as well as support you in other administerial and business tasks whenever required.
Hope the above pros and cons can help you to decide which one is a better choice for you in the best interest of your business.