Accounting software today is almost nothing like it was two decades ago. Unfortunately, the prevailing wisdom on how to use an accounting system in the Philippines has not changed much in the same period.

Filipino business owners, particularly in more traditional SMEs, still treat accounting software as just a tool for helping perform basic accounting functions. New software has taken these core functions well beyond their obvious limits, allowing for an extremely wide range of useful automation in different business processes.

While this automation can take in virtually any business operation, operations related to the inventory and supply chain are some of the most easily automated by modern accounting systems. Here are just some of the ways updating your accounting software can benefit your supply chain.

1.) Effective demand forecasting

New accounting systems allow for real-time monitoring of inventory, which makes it a relatively simple matter to forecast real demand. This forecasting can be used both for monitoring and projecting needed materials for the manufacturing process as well as keeping tabs on the popularity of different items for sale. Some accounting systems may also include sophisticated demand modeling and automatic ordering so that you always have the optimal stock of whatever item you need.

2.) Lean inventory

Effective forecasting also allows you to use your stockrooms and warehouse spaces more efficiently, as there is much less of a need to stock items for the long term. This can allow a business to effectively use storage and reduce the costs associated with maintaining an overstock. This can sometimes remove the need for large stock rooms altogether, which further reduces the business’s expenses.

3.) Reduced operations expenses

We’ve already mentioned that updated accounting software can reduce a business’s storage costs. However, it can also help operational efficiency in other parts of the supply chain. For instance, there is a much-reduced opportunity cost due to more effective use of storage space. Losses due to human error can also be reduced significantly with the incorporation of different automation features. Internal audits can be done faster and with fewer errors as a result.

4.) More accurate reporting

Whether you’re trying to forecast future demand for stocks or materials or simply want to know how much of a certain item is left in different physical locations, the incorporation of real-time reporting features in modern accounting software can truly make these systems a potent tool not just for improving efficiency, but for giving the business a true picture of what is going on. In terms of the bigger picture, this can be invaluable for attracting investors, making strategic moves, and complying with different government regulations.

Conclusion

Despite the term still being commonly used in the Philippines, “accounting software” does more than just accounting. It has immense potential for improving efficiency and profitability for any business and may even be useful for nonprofits as well. Not only can it help you balance your books and do your payroll, but it can also directly impact your supply chains and, by default, your sales, and marketing strategy as well.