Accounting software is virtually a requirement for all businesses, and for good reason. At the beginning, small business owners might find Excel acceptable, but sooner than later, they move on to a packaged product like QuickBooks or FreshBooks. This will do the trick for the smaller businesses with the most modest of accounting demands but invoicing alone can take away precious time that could be used to build the business.
- Simpler systems are referred to as single-entry accounting functions, a cash book not unlike your checkbook. You record incoming and outgoing cash. You label columns and roll out the transactions to show beginning and ending balances. Accounting software will run these processes for you, preparing invoices, writing checks, and archiving data. This serves most of the accounting needs of many companies such as work-at-home businesses, virtual assistants, and the like.
- Double-entry systems process more sophisticated accounting and larger business requirements. Double-entry accounting software allows the user to prepare general ledgers, receivables and payables, inventory and fixed assets, sales analysis and time-billing, and more.
Perhaps unfairly, first generation programs were dismissed as mere bookkeeping systems because financial accounting usually applies to reports that are shared and public to auditors, agencies, and outside stakeholders. It is also unfair to claim that simple systems do not rise to managerial accounting with its predictive analysis that forges managerial decisions.
People Count – Forcing another Technology (HRIS)
All these systems focus on currency and calculations. These numbers provide informative data that has nothing to do with employees – on the surface. Profits, losses, expenses, appreciation and depreciation, gross and net proceeds, acid tests and other ratios – these have never been people issues in the GAAP discipline of financial accountants. This is where the Human Resources Information System comes in.
Human Resources Information Systems (HRIS) process employees the same way accounting technology processes numbers. It counts, tracks, sorts, and archives people and their administrative records. It can be outsourced, cloud-based, or proprietary in-house. It does payroll and pays related taxes and entitlements. It calculates and administers employee benefits, and it reports labor burden. The more sophisticated HRIS programs are scalable and facilitate employee self-service, track training and development, support talent management and even succession planning.
Software-Distinct
Unfortunately, single software that handles both the accounting and human resources disciplines are hard to come by – a sustaining business challenge. Interestingly, it reflects long held management biases that HR and Finance do not mix. When, as is often the case, Human Resources management reports directly to the CFO, the CFO’s primary interests lie in HR’s ability to meet managerial accounting benchmarks. Employee turnover remains a pricing issue, not a human one; Recruiting is an expense rather than a resource. In any case, HR historically was believed to not have a true grasp of the financial accounting discipline, and accountants are disciplined to see little beyond 12 columns of future.
A significant outcome of the increasing adoption of HRIS software has been the maturation of Human Resources’ strategic ambitions. As the software has relieved HR leadership of administrative tasks, it encourages them to accept chores and develop strategies that correlate with the managerial accounting futures the CFO wants to see.
Mutual Interest. Better Together.
HRIS and Financial Accounting software are not mutually exclusive and, when integrated, become indispensable tools for both disciplines. If the human resources and accounting managers are inclined, they can readily see and use their respective outcomes for budgeting, planning, and decision-making.
Accounting professionals mine historic data for its trending values; Human Resources finds history as dynamic as human behavior. The ability to integrate the perceptions reduces organizational silos and presents valuable real-time information to all stakeholders.
For example, Financial Accounting Managers want managers to assess employee performance at least annually because it is a management best practice. Human Resources want those assessments because of their predictive values. Now, there may be moments when Financial Accounting realizes the finance numbers do not promise enough future for those human performance predictive analytics to materialize. But, barring such a particular bankrupting crisis, they should appreciate that training, development, and succession-planning contribute to the return-on-investment. Today’s Human Resources Information Systems programs assure Finance executives that management is truly leveraging human capital to its maximum.
You can find and compare HR software systems using your own criteria with the HRIS Selector Tool on CompareHRIS.com.
You may also want to check out the Selector Tool on CompareAccountingSoftware.com to find and compare accounting software within your specific industry.