When we think of accounting, we usually picture someone literally keeping the books and recording various financial transactions in a physical ledger. Over time, many practicing accountants have moved from using pen and paper to creating their records using digital spreadsheets such as MS Excel. Both accounting methods, while still popular in the Philippines, are fast becoming obsolete in the face of an increasingly fast-paced and demanding business landscape.
Today's world constantly encourages us to strive for progress and efficiency in all aspects of life, especially through the use of technology. Accordingly, more and more businesses have recognized the need to adopt electronic accounting methods. The Bureau of Internal Revenue (BIR), through Revenue Regulation (RR) No. 09-2009, has also made the implementation of computerized accounting systems (CAS) mandatory for all large taxpayers since January 2010. This regulation is intended to ensure that corporations and other qualified entities are able to file reports as quickly and accurately as possible throughout the fiscal year.
However, you don't have to be legally required to implement a CAS - any business can do so, as long as it meets the documentation requirements mandated by the BIR. Whether you're part of a thriving multinational or a small domestic business, there's no denying that a BIR CAS-compliant system will allow your company to manage its finances much more easily and effectively.
Computerized Accounting Systems: The Basics
Simply put, a computerized accounting system is software that can either be stored locally on a company's computers or accessed via the Internet. Once installed, the CAS serves as the primary tool for recording, organizing and reporting on the company's various financial transactions. Although the specific capabilities of the software vary by vendor, some of the features include the following
- Monitoring fulfilled and outstanding payments
- Creation of customer invoices
- Inventory tracking
- Payroll management
- Measuring revenue and customer metrics
- Consolidating a general ledger to summarize all of a company's transactions over a period of time
While many accounting software developers try to fully implement their systems by giving users access to all available features from the start, some also offer a more modular approach. This means that interested organizations can take advantage of only certain parts of the system that they need most or find most useful, usually at a reduced price compared to the full software.
The choice is wide, and there are many options for customization. So when choosing the right CAS for your business, consider its specific needs. For example, consider whether you want to completely overhaul an old system or add modern technology to existing systems. The best developers will work with you to better align the system you choose with your company's processes, and they can also train employees to manage it effectively after implementation.
Why your company needs a CAS
To understand the benefits a BIR CAS Application can bring to your business, you first need to be aware of the many pitfalls of relying primarily on an outdated accounting system. For one, manual and Excel-based accounting methods are highly susceptible to human error, making it difficult to maintain accurate records. Incidents like duplicate entries and typos are harder to spot and correct the more information your accountant has to process. If such sloppy data shows up in your final financial reports, your company can face hefty fines from the BIR.
Another difficulty with traditional accounting is that manual coding and processing of financial data is a tedious and time-consuming process. Manual coding usually slows down the entire report preparation process, which can affect a company's efficiency and harm its competitiveness in the long run. Clearly, these difficulties have a particularly serious impact on companies that want to optimize and expand their operations.
Considering the above challenges, the implementation of a CAS offers a direct and effective solution to these problems of efficiency and accuracy. Computer-generated financial records are often complete within minutes when requested, and they are also typically cleaner and less prone to error than manually generated records.
In most cases, good accounting software is even able to flag errors that enter the document during data entry and correct them later. When you're confident in the quality of your data, you can focus on what's really important: evaluating that data to make faster, more informed business decisions.
Finally, computerized accounting systems offer more security than traditional methods. Quality accounting software always has security features to protect your company's sensitive data. Most programs also offer the ability to back up, restore and/or synchronize your data across multiple secure devices and networks in case of an emergency.
The next time you're struggling to balance your company's books, don't be afraid to use modern solutions. While it can feel like an overwhelming transition, remember that implementing a computerized accounting system is meant to make your life easier, not more difficult. Once you find the right CAS for your business, you may find that your accounting problems are also a thing of the past.