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What is Custom Accounting Software? Why is It Essential?
Custom accounting software is a tailor-made software program designed to address your business-specific accounting needs, such as cash flow tracking, tax calculation, internal auditing, financial transactions, invoicing, reconciliation, business analysis, reporting, and more.
Streamlined accounting is the lifeblood of your business. It boosts your profitability and productivity. However, most accountants end up spending their precious time on countless spreadsheets and mind-numbing reconciliation jobs. Custom accounting software saves your accounting department’s time and improves their efficiency by automating several repetitive tasks and adapting to the needs of your business.
Streamlined accounting is the lifeblood of your business. It boosts your profitability and productivity.
Custom Accounting Software Allows You To:
According to Reportlinker, the global accounting software market size is expected to reach $45.3 billion by 2028, rising at a market growth of 19.6% CAGR during the forecast period 2022 to 2028. The growing requirement to modernize financial operations is fueling the adoption of custom accounting software.
Custom Accounting Software vs. Off-the-shelf Accounting Systems
Every business is unique in terms of their nature, way of operation, and size. So are the problems faced by each business. Standard accounting system software is not sufficient to handle the unique challenges affecting each business. For example, some companies want an application to streamline their inventory and asset management, while some require a solution for invoice processing or payroll management.
Traditional accounting software solutions offer a one-size-fits-all approach that fails to address specific business cases. They provide a set of standard features which can’t be customized to handle your unique needs. This is where custom accounting software comes into play.
Here’s a quick comparison of custom accounting software vs. off-the-shelf accounting solutions that will help you choose the right option:
|Evaluation Criteria||Custom Accounting Software||Commercial Accounting Systems|
|Features and Functionalities||Exclusive feature list customized to your specific needs||Standard set of features built for the mass market|
|Development Time||Long development process, but a guaranteed investment for a profitable future||Faster to implement with the vendor’s support|
|Development Cost||Requires significant upfront investment, but the costs will pay off in the long run||Moderately priced, but forces the user to pay for unwanted software features|
|Support and Maintenance||Software is fully supported and maintained by your developer||Risk of unplanned downtimes, support will be based on the vendor’s terms and conditions|
|Compliance to Business||Built to comply with your organization’s ecosystem and standards||Requires a high level of customization and extra components to function|
|Third-party Integration||Enables seamless integration with compatible external apps||Inherently inflexible, doesn’t support deep customizations or integrations|
|Scalability||Highly scalable and adaptable to your future business requirements||Time-consuming and costly customizations needed to address the rising needs|
|Data Security||Highly resistant to cyber infiltrations, tested thoroughly at each stage of development||Vulnerable to cyber attacks and software glitches|
Benefits of Custom Accounting Software
Custom accounting software provides your business with a powerful tool to manage volumes of financial information, significantly reduces your cost of operation, and improves your business efficiency. Tailored accounting software offers several benefits, including the following ones.
1 Improves Operational Efficiency
Financial accounting software tailored to your business has the ability to process large volumes of data and give accurate results in minimal time. Process automation doubles the efficiency of your internal accounting, so you can complete tasks more accurately and faster. Leaving the time-consuming, automatable financial and accounting tasks with custom software helps you focus on business areas that need more attention.
2 Saves Time and Costs
Custom accounting software allows you to perform more demanding tasks like data entry in less time, so your team can focus on business growth and expansion. Through process automation, the accounting software does all the heavy lifting which helps in bringing down your staff hiring and maintenance costs.
3 Reduces Human Errors
Every business needs an accounting system software regardless of their size or nature of operation. Managing all the financial and accounting functions by hand is a daunting task which will increase the chance of human errors. Custom accounting software helps perform all the functions with unmatched technical accuracy and efficiency, thereby reducing the chance for manual errors.
4 Better Financial Reporting and Monitoring
Manual methods used to reconcile data and prepare financial reports could take your valuable time forever. You can automate this mundane task with the help of custom accounting software. Automated report generation helps you get instantaneous reports in a few clicks, so you can monitor your company’s financial performance in real-time. This helps you identify and solve problems beforehand and make life-saving decisions based on accurate insights.
5 Higher Return on Investment
Implementing custom accounting software requires significant upfront investment, but it will end up paying off. When you buy a canned software, you will have to purchase additional hardware and pay extra for software integrations to make it function the way you expect. Custom accounting software is designed to suit every specific need of your business. You are free to choose the features that you require and fit within your budget. Moreover, the custom software developer provides you with dedicated support and maintenance without charging extra dollars.
Custom Features To Consider in Custom Accounting Software Development
As the name suggests, custom accounting software is designed to serve your business’s specific accounting needs. Based on our experience with custom software development projects, we’ve listed some of the top features that will make your financial accounting software more valuable.
Custom accounting software enables your accountants to generate, receive, dispatch, track, and print invoices right from the software. Your accounting department can track the invoice status in real-time, follow up with overdues, set reminders for recurring invoices, and ensure that your income doesn’t fall through the cracks due to oversight. Customizable invoice templates in the accounting software allow you to quickly create invoices, so you can process them in the order you need.
You can create custom formulas to calculate employee salaries, bonuses, overtime allowances, commissions, deductions, time-offs, and more using the custom accounting software. This allows your accountants to easily track and record payroll amounts and create customizable employee payment schedules for each month or for a specific time period.
Accurate financial reporting helps understand how your company is getting along through the highs and lows. Configurable dashboards displaying real-time updates on cash inflows and outflows, stock performance, department-wise performances, general ledger, accounts payable and receivable, current asset value, and other important financial aspects help you make better forecasting and budgeting decisions. Automation, along with highly customizable reporting templates help create reports more quickly and accurately. For instance, reports like balance sheet, profit and loss statement, tax summary, equity changes, revenue recognition, customer statement, and more are made accessible at your fingertips through the custom accounting software.
Tax calculation based on user-defined parameters and region specific tax rates and regulations has always been an accountant’s nightmare. Custom accounting software makes the whole process easier by automating tax calculation based on custom formulas. Let it be VAT, sales, income, withholding, or any other form of tax, rule-based and region-specific tax filing can be done on time with the help of custom accounting software. You can also set up periodic tax payment schedules to avoid huge penalties and compliance risks that could affect your business.
Streamlined inventory goes a long way in reducing your expenses and adhering to your budgets. Real-time tracking of raw materials, goods in-production, finished products, and goods moving in and out of your warehouses located in multiple regions is an important feature that any accounting software should offer. Inventory records based on purchase orders and returns will also help you understand which of your products are doing well in the market and which ones aren’t. Automated and optimized inventory workflow enables you to avoid stock-outs and react quickly to customer needs.
Integrating your account software with important business management systems, such as CRM, ERP, e-commerce application, HRM, asset and inventory management system, bank accounts, and electronic payment applications will simplify your accountant’s job. The best part of using custom accounting software is that it’s designed to comply with all the other platforms that you would require for accurate asset calculation and faster bank reconciliation.
Go-to Integrations for Custom Accounting Software
We work with our clients to build them a holistic custom accounting software integrated with their corporate financial planning systems and multiple transaction sources, so they benefit from error-free accounting as well as time and cost savings.
1. CRM Integration
Accounting software-CRM integration will allow your accounting department to track all the sales orders, quotes, invoices, customer data, payment terms, quantity and price of goods ordered. Your team doesn’t have to manually dig out the entire data from your CRM as the integration helps auto-populate the same data into your accounting software.
2. Inventory Management Integration
Integrating inventory makes your accounting software capable of generating stock position reports in real-time. You can track how your inventory is being purchased and utilized, which of your products are fast-selling or slow-moving, how you can avoid embarrassing out-of-stock situations, and maintain more accurate records on inventory values.
3. Asset Management Integration
It’s important for your business to know the levels of utilization, maintenance, and depreciating value of fixed assets. By integrating custom accounting software with your asset management system, you can track the position and value of your assets.
4. Procurement System Integration
Procurement management, also known as the source-to-settle process, can function effectively only when it’s integrated with sourcing, supplier management, contract management, risk management, requisitioning, purchasing, invoice processing, and accounts payable. The integration works best when you choose to develop a custom accounting software.
5. Cash Management System Integration
Integrating your account software with your cash management system ensures that all the journal entries in your general ledger and sub ledgers are up-to-date with real-time data on financial transactions across operating, investment, and financing activities of your organization.
6. Financial Planning and Analysis System Integration
With a single source of true financial performance data, you can make accurate and insightful decisions related to financial planning, forecasting, and budgeting. By integrating your custom accounting software with analytics and reporting, you don’t have to switch between multiple tabs and applications to gather the right data.
7. HRM and Payroll Integration
Integration with HRM software helps automate your payroll management, making it easier for your accounting department to calculate salaries, commissions, bonuses, incentives, allowances, tax deductions, and more in a matter of minutes.
8. Bank Accounts Integration
Linking your bank accounts to the custom accounting software allows your team to handle funds quickly without process delays and service interruptions. It makes your bank account reconciliation seamless and faster and also helps in monitoring credit and managing checks.
9. Electronic Payment Gateway Integration
In-app payment options that allow users to make payments without leaving the customer portal is a must-have feature of e-commerce apps and web stores today. Custom accounting software integrated with bank accounts and payment systems allows your customers to pay directly from the application using their cards, credits, payment processing apps, or through their bank account. This enables you to keep a record of payment history and receipts.
Significance of Small Business Accounting Software
Custom accounting software helps automate several mind-numbing and repetitive to-dos, so you get more time to focus on the key areas of your operation. Effective monitoring of financial situations through accurate reporting enables you to plan, identify potential problems, solve challenges, and improve business viability. Tailored accounting software is highly beneficial for small business owners in many ways.
Unlike the traditional manual ledgers and spreadsheets, custom accounting software helps organize your financial data, which makes your turnaround time faster. Data is structured and recorded in a way that makes it easy to find. The software also simplifies data exports and imports and increases the speed of data processing. For example, just by clicking a customer or vendor ID, you can track the bills paid or overdue, transaction history, or any other details pertaining to the user, all in one spot.
With a custom accounting software by your side, you don’t have to juggle multiple applications to track your inventory levels, payrolls, financial statements, employee data, assets, procurements, sale orders, invoices, and more. Personalized account software centralizes the key areas of your financial administration, so you don’t have to implement and maintain separate tools for managing each operation. Centralized financial management helps in saving your time and money.
Personalized accounting system software offers customizable journal entry templates that help you create, evaluate, update, and approve journal entries in the general ledger (GL) as well as subledgers without breaking a sweat. Using the software, you can maintain accurate and real-time records of internal and external financial transactions, multi-currency exchanges, GL balances across multiple branches or business entities, and more. Staying updated with your accounts in real-time helps you detect potential cash flow problems at an early stage and identify customers who could cause a credit problem for your small business.
Custom-built software offers you the freedom to define who could access your data. For instance, you can share access with team members who need to send invoices to clients or who are responsible for paying company bills. Similarly, you can share the software access with your accounting department and professional tax practitioners to save your time and money.
Financial statements like balance sheets, profit and loss statements, credit reports, bank account statements, and cash flow statements come handy especially while asking for a loan or predicting your company’s taxes. With all your business accounting data in one system, report generation becomes much easier. The analytics capabilities of the custom accounting software lets you create complex reports quickly and helps you with proper financial planning.
Cloud-based custom accounting software allows you to manage your bookkeeping ledger, accounts payable, accounts receivable, invoices, and costs all in one place, and access the required details from anywhere, at any time, using any computing device. You can simply create, send, track, and record invoices or generate expense reports in a few clicks to analyze your company’s financial position using the accounting software.
Types of Accounting Software
Accounting software helps you monitor the financial health of your business and understand your company’s strengths and weaknesses. The software gives complete visibility on your income and expenses as well as sales and profits. If you are planning to choose an accounting software package for your business, it’s important to understand the different types of accounting software and in what circumstances each one should be used.
When it comes to managing your day-to-day financial data, Microsoft Excel could be the first tool that would come into your mind. Tools like Google Sheets and OpenOffice also help you with bookkeeping. However, businesses with only basic or minimal financial operations can rely on spreadsheets to manage their accounts. If you have more complex requirements or need to handle complicated accounting procedures, it’s better to build a custom accounting software that can handle all your requirements effectively. Moreover, there is a high risk of data loss, data manipulation, entry duplication, and oversight errors when using spreadsheets. Custom-made software helps avoid such errors through in-built automation and logical workflows.
Commercial Accounting Software
Most of the small and medium businesses worldwide use commercial off-the-shelf (COTS) accounting software. However, most of the COTS software are designed for the mass market and are, therefore, moderately configurable to your business’s specific needs. COTS accounting software can be installed with the help of a consultant and often requires a lengthy installation process. On-site collaboration is required to manage bug fixes, patch updates, and version upgrades. Commercially available software may offer numerous features which aren’t meant for your industry, so you end up paying more on several unused features.
Enterprise Resource Planning (ERP) Software
ERP software is a suite of applications built to manage and integrate your day-to-day business activities. These activities may include procurement, production, project, human resource, finances, inventory, and so on. ERP applications are designed to eliminate the problem of data silos across different teams and departments of a business. However, ERP implementation is required only if you are a large organization managing complex business functions and multiple departments. ERP application is an example of accounting software that provides stakeholders with accurate and real-time data to make informed decisions.
Custom Accounting Software
Custom accounting software development is the right option to go for when your entity’s needs are so specific that they cannot be met by an off-the-shelf solution or a commercial ERP software. The software complies highly with your business’s ecosystem and is scalable to your future requirements.
Custom accounting software supports integrations with complementing software apps, which makes it capable of addressing more unique business scenarios. Instead of spending heavily on third-party licenses and subscriptions, you just have to pay for its development, which means that all rights on the custom accounting software are reserved to its payer.
Is your off-the-shelf (pre-packaged) solution meeting only 60% of your operational business needs?
Cloud-based Accounting Software
Also known as online or web-based accounting software, this type of accounting software operates through a cloud application service provider, leveraging internet connectivity. Businesses using cloud-based accounting software don’t have to make any large-scale hardware investments. You can access the accounting software using your login credentials and make use of the features available in your software subscription package. This type of accounting software is highly beneficial for remote teams and businesses with multiple branches. An example would be Software as a Service (SaaS) based accounting applications that require only minimal upfront investments. The Pay-as-you-go model allows you to start with a small capital and expand later when you anticipate better business growth and profitability. SaaS application deployment takes less time and money when compared to a traditional on-premise system setup.
Steps To Build Custom Accounting Software
To develop and integrate custom accounting software into your business, you must lay out a software development roadmap and deploy a team of experienced software professionals. To learn valuable insights on how to hire the right software development outsourcing partner, read our recent guide on points to consider before choosing the best software development company. To get started with the development process, follow these steps.
Define Your Idea
Got an excellent idea for your small business accounting software? It’s the first step to start your development project. Expand your idea into an actionable strategy. Motivate your team to take the initiative, brainstorm ideas, perform analysis, and identify the practical functions and features that would be needed in the accounting system software.
Design The UX/UI of Your Software
After assessing the project idea, the next step is to work on the prototypes and design mockups. The cost of software development is often based on the number of features the solution requires. As a business owner, you can ask your custom software development partner to design mockups or prototypes of the accounting software according to your business needs. Working prototypes allow you to decide the required and essential software features during the project’s initial phase itself. This helps avoid time-consuming reworks and redesigns. Once the software’s framework and future design are accepted, you can determine the accounting software’s functionality.
Prepare a List of Features and Functionalities
Prepare a list of features and functionalities and share it with your custom software developer. Here are some of the important features that you could include while building a custom accounting software for your business:
Develop The Software
Laying out a proper design for your custom accounting software is a complex and time-consuming process. However, using a questionnaire-based development approach, you can simplify the design and development process.
Custom software development companies like Fingent ask their team of designers and QA engineers to compose test cases covering diverse user scenarios before beginning the actual development process. This helps avoid software bugs and makes your application more stable and functional. At Fingent, our developers look out for the latest UI/ UX design trends and develop applications using configuration management techniques to ensure that proper software development methodology is being followed throughout the project.
Deploy and Maintain The Software
Post development, the custom accounting software is implemented and integrated into your environment. The software is made ready-to-use after several rounds of testing and quality checks to ensure the best user experience. Right after implementation, the software may need close monitoring and improvements for a few days to increase its relevance and stability. Most custom software development companies provide you with dedicated application support and maintenance as long as you use the application. The team helps you in resolving issues related to your software’s usability, bugs, and other technical glitches.
Cost of Custom Accounting Software Development
Custom accounting software development cost depends on the software’s features and functionalities, frameworks and toolkits used for development, and various other factors including the ones listed below.
Offshore providers across different countries charge different rates based on their region’s outsourcing regulations. Based on Fingent’s experience, developing a custom accounting software of average complexity costs around $200,000 – $400,000, while personalized financial accounting software development for a large enterprise may require $500,000+ in investments.
Custom accounting software saves more than 50% of your business’s expenses and efforts.
When Custom Accounting Software Is Your Best Choice
How will you know if your business needs custom-made accounting software? Here is a checklist to help you with the analysis. If you tick any of these boxes, it might just be time to get that ball rolling on a custom software solution.
You need a business accounting software that provides 100% compliance with the local regulations in the regions where your business operates.
If your business handles highly sensitive financial and business data, you need a custom-built software that provides advanced data security features.
Integration with other systems
Your accounting application requires smooth and effective integration with legacy systems or other platforms that you’ve been using for a while.
You need to make smart and accurate general ledger predictions by account and make timely financial decisions based on real-time data and insights.
If you want to apply user-specified events into your transaction processing workflow, custom software development is the right choice.
Implementing custom rules for payroll scheduling, tax calculations and employee reimbursements is much easier when you have a custom accounting software.
Business expansion also means technological growth. It’s not practical to change your software every time a component of your business grows. With custom accounting software, you can easily upgrade the application and add more features as you scale.
Want to enhance your existing software with custom features?
Custom Software Development: Choosing The Right Partner
Choosing the right custom software development company from hundreds of capable contenders is easier said than done. Most of the firms have years of experience, industry knowledge, and technical expertise required to stay relevant in a highly competitive and volatile market. It’s indeed a very tricky job to pick out the right one, but we have tried to make this simple for you with our checklist given below.
Make a precise list of your requirements. Write down what you expect the custom accounting software to do. Talk to your employees and stakeholders to evaluate the problems and analyze the solution. Create an outline of the solution based on your objectives.
Research and list all potential custom software development partners who can deliver the required services. Also, find out from others to see if they have any recommendations. Learn more about each prospective contender, so you get a fair idea of their technical skills, knowledge of their team members, domain experience, project portfolios, awareness of the latest technologies, and work experience in domains similar to yours. This allows you to filter the list and narrow down your research to 4-5 companies.
Assess the software development company’s flexibility to adapt to changing environments. Look up their client base and client relationship history. Ask for customer references who can provide you with genuine feedback. Check out their ratings and reviews on B2B rating platforms like Clutch, GoodFirms, and others. Take a look at their social media content. When interacting with their previous or current customers, try to understand more about their vendor’s communication effectiveness, scheduling and service quality, costs, development methodology, engagement model, and so on. This will help you identify if the potential custom software company’s way of operation and objectives align with your requirements.
How long would it take to develop the custom accounting software? This is a critical question that needs to be discussed before choosing the right partner. For certain circumstances, you will have a deadline that you need to fulfill. Avoid haste and plan all company commitments accordingly and ensure that the software’s quality is not affected to comply with strict timelines. It is recommended that you often reserve additional time for checking and debugging applications before they are approved for widespread usage.
The legal implications of hiring a custom software development partner shouldn’t be overlooked. Ensure this gets done properly during the technical and strategic vetting of the selected company. Keep in mind that the development partner would invariably be getting access to your company’s confidential data, such as intellectual property, business strategy, or trade secrets. Perform extensive background checks to ensure the integrity and reliability of the partner.
Verify the software developer’s security policies, certifications, and accreditation. Before signing a contractual agreement with the firm, understand their terms and conditions properly. Custom software development allows you to own the product entirely unless you decide otherwise. Ensure that all rights on the custom software are reserved to its payer.
It’s important to match your project requirements with the right-sized organization. Not all companies undertake any size of custom software development projects. Find out if the custom software development company’s experience is sufficient to handle your project requirements. Read up their case studies, take a look at their website or visit their online profiles to understand more about them.
Custom accounting software is meant to handle confidential company data. It’s important to understand your software development partner’s physical and cyber data security policies. Find out how they will be handling your data and assets. Review their integrated security and/or IP protection program. It’s good to undertake an intellectual property due diligence enquiry before finalizing the software development vendor to safeguard your enterprise’s IP, and determine which functions need to be kept in-house or outsourced.
Determine if the cost of the project fits your budget. Be sure of the guaranteed ROI, so you won’t go bankrupt after purchasing a high-priced software that automates parts of your business. That said, you don’t have to compromise on the AR quality of the software for low costs either. Certain companies overprice their solutions just to portray themselves as a bigger and better company. Always look for hidden or additional costs in the contractual agreement, such as additional payment for document management, annual setup/ maintenance in addition to monthly support charges, in-person training, etc.
Even the most perfect solutions guarantee only 99.9999% up-time. Unfortunately, there are no 100% perfect solutions. There is always a 0.1% chance of things going wrong after delivery, especially in the case of software. So make sure your vendor company provides direct access to the technical team and offers good support, periodic maintenance, cloud-based updates, software upgrades, and troubleshooting services for a fair period of time after sales.
Most software development companies are willing to provide their customers a free trial to understand the quality of the features, benefits, and usability of the software. This is usually done through prototypes and mockup projects featuring a particular aspect of the envisioned software. Running a pilot project allows you to find out if the software development company is capable of meeting your expectations. Ask the vendor as many questions as possible during the trial phase.
How Fingent Helps
Fingent’s end-to-end custom software development process is tailored to meet our clients’ business needs, challenges, and goals. We understand your requirements and turn your ideas into tangible deliverables with maximum business proficiency. Let it be anything – custom software development, web and mobile app development, cloud migration, enterprise software applications, modernization of legacy software, or SaaS development – we offer innovative and reliable software solutions that will delight your customers, simplify your team’s job, and help your business scale.
Our custom software development experience spans across multiple industries and advanced tech, including data analytics, augmented and virtual reality applications, artificial intelligence, robotic process automation, internet of things, and more. We follow an impeccable workflow and a set of best practices to foster structured software development and reduce the cost of your business operations.
“We don’t simply initiate your project. We step into your shoes and understand your business landscape to give you the most purposeful solution.”
Frequently Asked Questions on Custom Accounting Software
Custom accounting software is designed exclusively to address your business’s specific accounting needs. The top advantages of customized accounting solutions are:
- Business efficiency improvements
- Reduction in human errors
- Time and cost savings
- Better financial monitoring and reporting
- Faster and accurate data processing
- Seamless integration with other business software
- Anytime, anywhere accessibility
- Improve compliance with tax and legal processes
- Streamlined payroll management
- Better traceability of invoices
There are different types of accounting software designed to meet various small business accounting needs. Some of the leading examples of accounting software are:
- Pre-packaged accounting systems
- Enterprise resource planning (ERP) software
- Online accounting software
- Custom-made accounting software
- Cloud, hybrid, or on-premise accounting software
When choosing to build your own accounting software, you need to keep in mind your business’s long-term growth plans. Make sure that the software you’re going to build encompasses all the features and functionalities that you will require to drive your business in the right direction. For instance, the number of application users may grow from 10 to 100 in no time or you may open new branches of your business. Make sure the custom accounting software is scalable to meet such scenarios. Also, check if the custom software development vendor provides you with an option to add new features or upgrade the software in future.
You can access your accounting software through mobile, if it’s a mobile-enabled application. Most of the custom software developers develop mobile applications if you have a specific requirement for the same. Be it iOS or Android, you can easily access your custom accounting software through mobile. Mobile access allows you to generate invoices, record expenses, manage clients, monitor cash inflow and outflow, and do a lot more even when you are away from your desk.
Yes, you can. Custom accounting software can be integrated with your key business applications, including, ERP, CRM, HRM, inventory, payroll, and so on. Through data flow customizations enabled via APIs and integration plugins, you can easily import or export data to and from your custom accounting software. Discuss your requirement with your custom software development partner to enable seamless data transfer between applications.