Accounting software helps prevent bookkeeping errors
May 21, 2015

Accounting departments of all shapes and sizes need standards and systems in place to ensure their organizations don't collapse financially. Whether a business has five employees or 500, bookkeeping needs to be accurate. Accounting departments for large and small businesses, in addition to those financial professionals in charge of managing funds for large cities, can benefit from savvy tools like accounting software.

One city's hidden funds
Last month, Jacksonville, Florida, got a big surprise - or rather, $500 million small surprises - when a special city council committee discovered many bookkeeping errors in the city's accounts. As reported by The Florida Times-Union, Councilwoman Lori Boyer lead the committee, assigning staff members to help her inspect Jacksonville's financial records after Mayor Alvin Brown proposed the city borrow $235 million for capital improvement projects. Boyer and her staff looked at 15 years of documents from more than 1,200 projects and found $500 million in errors. This freed up $50 million for capital improvement projects and $25 million to boost Jacksonville's capital improvement budget for 2015.

The mistakes Boyer and her team uncovered were, thankfully, plain human error as opposed to malicious actions taken to cover up inappropriate spending. Errors due to transposing, misplaced decimals and redundancies made up a majority of the problems the committee discovered. According to Boyer, "one mistake amounted to more than $454.9 million."

Avoiding accounting mistakes
While Jacksonville's situation may be an extreme case, the example set is a good one. Errors add up, and accounting professionals don't want to have to clean up messes left by years of unkempt financial records.

Mistakes in accounting are not uncommon when outdated software or manual spreadsheets are used to track data. Many business owners find their accounting departments are responsible for the same errors over and over, including mishandling petty cash, miscategorizing expenses, failing to reconcile books with bank statements, leaving invoices disorganized and communicating poorly with other departments. All Business stated these processes have to be managed effectively - otherwise it's just a matter of time before the business damages itself from the inside out. Luckily, all of these issues are repairable with a reliable software platform.

High-quality accounting management software allows bookkeepers to track spending, observe budgets in real-time and better anticipate financial changes in the future. It's an invaluable tool all accounting departments need for healthy business operations. Just like a committee designed specifically to patch holes in a city's budget, accounting software can identify trouble areas and help accountants fix them up.

Nexus: G-WEBCD4