The time of paper accounting is in the past, today absolutely all operations are computerized. Accounting software minimizes the risk of human error, which is highly undesirable and often encountered in paper records. It manages all the profitable business of the company, predicts sales, manages inventory, and all of this is available with a few keystrokes.
Accounting software is suitable for enterprises of any sphere and significance. According to research, about 82% of small businesses use it to conduct financial transactions. There are also solutions for medium and large businesses with a more significant list of functionality.
There is a large number of software on the market, let’s look at some tips on how to choose the right one for your enterprise.
Benefits of accounting software
If your company has just entered the market and the budget for hiring new employees is low, you can completely do without a full-time accountant by shifting his authority to the software. The main advantages of replacement:
- Saving your budget. Accounting software costs less than hiring an employee. By purchasing good software, you can be sure that your accounting is working properly and that it complies with all cash tracking and reporting standards.
- Saving time. All processes in the software occur automatically, the main task is correct configuration. To do this, it is enough to pay for one consultation of an accountant or try to figure it out on your own.
- Accuracy of calculations. The absence of errors due to the human factor is a guarantee of optimal performance of all transactions without the risk of typos.
- Single repository. All financial transactions of the company are concluded in one place. With the software, all employee payroll calculations, tax tasks and all transactions will be collected on one platform to simplify analysis and work.
If your company has a large cash turnover and many financial tasks, you cannot do without a qualified specialist. But, the software will still save the budget, because the staff will have a minimum number of accountants, and they will be able to perform all tasks faster and more reliably with the help of reliable tools.
Accounting software varies in price depending on the feature set, the number of users that can interact with it, and other factors.
Some developers offer cloud-based software that does not require direct downloads and licenses. Only a monthly fee is required to interact with the tool, which ranges from $ 40 to $ 100 per month, more powerful software options are more expensive. For regular customers, developers often offer discounts.
Integrations with other business programs are also available, which expands the capabilities and simplifies the work of the entire company.
There are free versions of accounting software, but they have many limitations, and they are not suitable for all companies. They may have restrictions on the number of users to log in, few basic features, or a minimum of allowed transactions. For those who start building a business, this will be enough.
Basic accounting functions
Accounting software allows:
- track accounts payable;
- keep records of wages;
- keep track of the company’s income and expenses;
- register payments;
- issue invoices to customers;
- create reports;
- reconcile transactions.
This is not the whole list of functions, some software offer more, but most importantly, all this is available in one place and without unnecessary integrations.
In addition, accounting software provides companies with a number of options that are worth considering before choosing.
Some software options can automatically send invoices and notifications of transactions or mandatory payments, which significantly saves company time and resources. They can even write off funds from debtors’ cards on their own.
If your company needs to send analytical data or quotations – the software can also automate this process and convert them into invoices.
To maintain inventory records, find a tool that will create purchase orders itself.
And with autoscanning, all receipt data will turn into transactions without your intervention.
Even complex operations such as tax reporting, tax rates and tax calculations can be automated using accounting software. The main task is to provide access to all calculations to your accountant, who will be able to assess the quality of calculations and their compliance with government tax rules.
Projects and time tracking
A convenient addition to accounting software will be the ability to track the time spent. For example, you will be able to issue an invoice based only on the number of hours spent on a project. Such a calculation can be carried out within the framework of individual projects without limiting their number. All timesheets will be converted to invoices and automatically sent to recipients. The main thing is to double-check the correctness of their preparation before sending reports to make sure that the settings are set correctly.
Third party integrations
Additional integrations with other applications will expand the capabilities of the software. Communication between them takes place in real time in one account, so they can freely send each other all the data they need. For example, you can connect email marketing, POS system, ERP, payment processing, or CRM. By introducing changes to one of the applications, they are automatically implemented in others, which will save time.
Accounts receivable and payable
The software will independently register accounts receivable and payable, and calculate the amount that suppliers owe you and what you owe them. This is an effective tool for your company, all processes will be formed independently after setting up. Payment reminders, creating invoices, sending notifications – everything will be done without errors and automatically.
Cash and accrual accounting
For small businesses, the cash accounting method is suitable, because the main operations for him are cash outflows and inflows. For large – the method of accrual of funds is better suited, tk. the purchase and sale of loans and the accounting for receivables and payables are added to the regular transactions.
You can start by using cash-based accounting software and then switch to an accrual basis. Therefore, you need software that supports both options, since this will greatly simplify the work of the company.
By using accounting software that supports payment gateways, you provide your customers with safe and secure online payments. For example, using online banking services or using credit and debit cards.
The work of software integration with payment gateways is as follows: the client makes a payment, you receive it, and the system automatically informs you about it and changes the status.
When choosing the optimal payment gateway for your company, check the transaction fees. It can be charged only by the payer or bilaterally. After completing the search, check if your software integrates with the payment gateway.
The most important part of accounting is bank reconciliation. When looking for the best software, be sure to integrate them. It is important that the software receives all statements automatically. The system must also comply with all banking rules, allow customization of the user interface and independently classify all conducted transactions. This will help you to analyze the work of your company faster.
Choose software with the ability to automatically generate financial reports. They will be able to independently enter data on the balance sheet, profit, loss and other monetary transactions. In addition, they will automatically generate financial reports for other departments, for example, resource inventories, taxes, accounts payable and receivable. After analyzing them, you will be able to understand in which areas everything works stably for you, and which areas should be improved.
Many features are not included in the standard feature set of accounting software. At the same time, despite even higher costs, they will become a very useful addition and will further automate your work. For example, with the help of a payroll and processing system, you will be able to settle accounts with your employees faster.
5 tips for choosing accounting software
No. 1. Assess your skills and needs
Analyze your business first. For example, if it generates revenues in excess of $ 1 million a year, you will need more advanced software than companies that make less than $ 100,000. Check out all the available software options on the market and choose the ones that are geared towards your business.
Also consider the options that are tailored to your industry, as there is specialized software for trade and restaurants, for industrial and commercial enterprises, as well as other areas of business.
The better you analyze the data, the easier it will be to manage your revenue. The software, more often than not, does not replace an accounting specialist. Skills are required to work with it. it is just a tool that you need to be able to manage. The basics of use can be learned by a supervisor, but deeper expertise will be needed for complex operations.
No. 2. Evaluate cloud apps
Today, many computing applications have become available online in the cloud, you should also pay attention to them when choosing. In addition, they are easy to interact with:
- there is no need to buy an application license;
- no need to overload the device memory with bulky files for installation;
- applications and their data are available online from anywhere in the world;
- updates and patches are installed from the server side, which minimizes the need for constant monitoring of the application;
- access can be obtained both from mobile devices and from a computer;
- additional security thanks to remote storage.
Many cloud-based accounting software integrates seamlessly with business management software. This provides additional convenience for data synchronization.
No. 3. Build on budget
The software market has many different options to suit any budget. Some applications have a free version with a basic set of tools, some require an additional subscription fee. But, if your business requires more specialized applications with individual settings, you will need to spend more budget.
No. 4. Additional features
Add-ons will expand the capabilities of your business and accounting management. For example, additional options are available for integrating software with tax, e-commerce applications, accepting payments, etc.
No. 5. Consult with experts
First of all, not you have to interact with the software, but your accountant. Check what tools he uses on a daily basis, and, perhaps, it will be possible to find software suitable for integrating with them. In addition, it will be easier for a specialist to offer an option adapted to your business.
The IT team is also worth consulting. They should evaluate the capabilities of your equipment and make a conclusion about what kind of accounting software can be installed on it. Even cloud objects require a lot of on-board memory, and if they contain large databases, then even more free storage space is needed. IT staff should also assess how easy it will be to back up.
No. 6. Rate other companies and consult
Evaluate your competitors’ market for accounting software use. To do this, talk to business partners, ask the members of the business association, or talk to your accountant, who could have worked with good software at a previous job. You can also order consultations from a separate specialist to clarify the issue.
No. 7. Rate what you want
All data has been collected and now you can start choosing. It will be difficult to find the ideal software according to the budget and parameters, but knowing all the nuances, it is still easier to do it. Highlight the most important nuances necessary for work and make a choice. Remember that you can always change the software, so don’t be afraid to make mistakes.
There are more and more accounting software options today. They vary in size, integration, capabilities and other parameters, and can also be categorized:
- Small business software and payroll. They provide all the necessary functions, tools and reports for financial data. For example, QuickBooks, which opens up multiple layers and connectivity of add-ons, and Simply Accounting, which gives 20 users access.
- For business management. These include accounting software with a lot of tools: points of sale, CRM systems, purchasing and billing software, inventory management and some corporate resources. For example, NetSuite, which contains everything you need.
- Accounting web applications. The market is pleased with the appearance of a large number of applications covering finance. With them, you can manage cash flows online.
- Free software. Don’t be skeptical about the “free” prefix. Such programs today allow you to print checks, keep track of employee salaries, create accounts and manage the finances of 20 clients in one program. This is an ideal opportunity for small businesses with low turnover.
Each category is focused on different areas of business. Analyze your options and decide what suits you best.
Choosing the required accounting functions
To choose the most convenient software, you should ask yourself a few questions:
- Budget. Estimate how much you are willing to pay for software, or you can get by with one application with some add-ons.
- The convenience of use. How many users will have access to the software, it is more convenient to use a cloud system with access from anywhere in the world and from any device or local, and what software capabilities are paramount for you.
- Details. Decide on the purposes of use, the need to maintain accounts receivable and payable, the need to generate any reports, and whether additional tools are needed for keeping track of time, payroll, etc.
Before choosing accounting software, you should evaluate all of its functions. Review all market offers before making a selection.
Research shows 91% of accountants say technology has improved their productivity. When choosing accounting software, consider all possible factors. Even an insignificant trifle can be useful in this difficult matter. Do not be afraid to consult with colleagues, accountants and IT specialists, they are an integral part of your company and can help.
Do not forget that you can always switch to other software, so in your work, pay attention to the result and usability.