Wednesday, June 15, 2016

Some Limitations of using Trial Balance Software for CPAs

Many businesses use accounting programs to automate most of the daily accountings tasks. Apart from the number of benefits like having control over daily reports and financial statements employees also seek to get themselves working on other important and complex projects. The programs play a descent role in aiding management in decision making process. But let’s not forget that no matter how much advanced and life-saving, technology has its own limitations too. If you are operating a start-up, then along with the benefits it is important for you to keep check on limitations of using trial balance software for CPAs also.
1.       Cost
The expenses of purchasing the software does not stop there. Apart from purchasing cost, computers specifications (hard disk capacity, RAM storage, processor speed, etc.) are also there you have to see to make your system run that software without any technical glitches. Backup of accounting data also requires additional storage and you will also incur the annual licensing fees of the software. If you are not skilled in IT and accounting setups you will need to hire a consultant to do the job.
2.       Difficulty is using
Some accounting programs are specifically made for non-accountants. If you never had practice on any accounting software then you will need to learn accounting terms, their practicalities, basic software functionalities, etc. which will be more difficult than the benefits you are looking to get from it. Better to find the right balance between the complexities of the program with the benefits you will avail.
3.       Time consumption
Even professional accountants admit of sometimes taking more time entering data in the accounting program than simply entering manually in a spreadsheet. Some programs require step by step process which is even more time consuming especially for inexperienced users. If the process of entering data is eating more time than manual work, then do note that time requirements outweighs the benefits of automated tasks.
4.       Maintenance
Maintenance not only means the periodic upgrading of the accounting program but also maintenance and upgrading of your systems’ requirements. Upgrading will get your software additional features and benefits that will require some enhanced system specifications too. If you do not wish to incur additional costs for this purpose, it is best to stick with manual accounting.
5.       Risks of fraud
Trial Balance Accounting software for CPAs require extra protection from fraud and related activities. Software allows easy access that enables any personnel to alter the correct data resulting in critical situations like financial mismanagement. As a result, auditors are more importantly required to check for data inaccuracies.
6.       Human error

Even the most experienced accountants and data entry operators have their share of human errors in their career. Writing down an amount incorrectly or even worse misplacing a digit are quite easy to happen that results in serious consequences. Tracking down the cause of these changes is difficult and time consuming. On the other hand spreadsheets, ledgers and other manual accounting tools helps in easier and faster tracking of such discrepancies.

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