As most of us like to have a professional look for our business activity, so does the software. The accounting software helps you to keep an eye on various activities of your business and manage them as per your requirements. It is important to choose right kind of software as it helps in providing better results.
In this post, we review the Different Kinds Of Accounting Software, what is accounting software, features of accounting software, and What is most common software used for accounting?
Different Kinds Of Accounting Software
It’s easy to get overwhelmed with accounting software. There are so many different types, and they all have different features. Plus, the more advanced your business is (and the more money you make), the more complicated your accounting needs become. So we’ve broken down some of the most common types of accounting software and how each one can best meet your needs:
- Accounting Software For Small Businesses
For those who are just starting out, or have a small business, there are many options available. These include:
- Accounting Software For Mac and PC
- Accounting Software For Cloud-Based Platforms (i.e., Google Drive) The cloud-based option offers the greatest flexibility, but it can also be expensive and difficult to use if you’re not tech savvy. If you opt for this kind of software, make sure that it offers adequate security features – otherwise your information may be at risk!
When it comes to accounting software for businesses, there are two main categories: desktop and cloud-based. A desktop version is installed onto your computer and you can access it from multiple locations and on multiple devices. Cloud-based services are accessed online through a web browser. While both types of software offer some benefits, they have their disadvantages as well.
Here’s what you need to know about each type:
- Enterprise level software is expensive.
- Enterprise level software often requires a high degree of technical expertise to use.
- Enterprise level software is often too complex for small businesses, mid-sized businesses and even sole proprietorships.
Do you have a sole proprietorship?
If you’re the sole proprietor of a business, your accounting software should be simple enough for you to use without help. You will likely already have most of the information you need to track your business’s finances, such as sales figures and accounts payable/receivable amounts. A good accounting solution should also have reports that can help with tax time or when preparing financial statements.
A sole proprietorship is one of the simplest business structures in existence; after registering with your local government, there are no legal formalities required to open up shop. You don’t even need a separate bank account—your personal funds can be used for all operations related to your company. Since there is no legal entity separating the owner from his or her business (except in certain cases), there aren’t any double taxation issues either!
Do you need industry-specific features?
- Are you in an industry where specialized features are required?
If you’re in a specialized industry, then it’s important to find accounting software that supports your business. For example, if you work in manufacturing or distribution and need to manage inventory and purchase orders, then you’ll want software that can do those things for you. Depending on your needs as a business owner, there may be additional features available from the same vendor. Software vendors will often have different solutions depending on where their product fits into the spectrum between home use and large enterprise solutions.
- How do I find out if my industry is supported?
Most vendors offer free trials of their products so that customers can test them before committing to buying it outright. Testing the product will give insight into how well it works with our specific needs and how much effort would be required by us to integrate new features into our existing processes (or perhaps even repurpose old ones).
Do you need to track inventory?
If your business has inventory, you’ll need to know how much of it is on hand. This is crucial for keeping an eye on your financial health and making sure that you don’t run out of product—but it can also help with tax purposes and planning for growth.
If you have no inventory, this section doesn’t apply to you! But if you do, here are some things to consider:
- Do I have the right amount? If too much of what’s in stock isn’t selling as fast as planned (or at all), then your business could be stuck with slow-moving items that aren’t being used up quickly enough. However, if something isn’t selling because customers don’t want it anymore or find it difficult to use or buy from somewhere else instead, then having plenty on hand might not be helpful after all—you’d just end up wasting money by having extra units sitting around collecting dust. So make sure that what gets tracked within the system matches up with real demand for your products or services before trying anything else
You can best choose your accounting software by thinking about what kind of business you have and what kinds of features you need.
You can best choose your accounting software by thinking about what kind of business you have and what kinds of features you need. If you’re in a creative industry, for example, it may be helpful for your accounting software to include an inventory management system that tracks how many units are produced or sold. On the other hand, if you’re a retailer who specializes in jewelry or clothing, customer information tracking is probably more important than inventory management.
If you want to take things even further and make sure your accounting software has all the features that will help your business succeed, do some research into industry specific features (like those mentioned above) before making a purchase so that they’ll be available when it’s time to use them!
what is accounting software
Understanding Accounting Software
Accounting software is an invaluable resource for modern businesses. Software allows detailed tracking of financial transactions and near-instantaneous reporting and analysis. Before accounting software, these tasks had to be performed by hand, using large transaction journals.
Ad hoc reporting was generally impractical due to the labor involved in consolidating the manual entries. Accounting software automates these tasks, reducing the costs of accounting and allowing better financial decision-making through timely reporting.
Accounting software also allows for the storing of numerous amounts of data without having to take up physical space. This results in companies needing less office space because they no longer need large file rooms to store binders of data. Less office space allows for cost savings.
The ability to easily access accounting information through accounting software makes it easier to complete audits, particularly those that require evaluating information from years prior. This not only assists with internal audits but also assists external groups, such as the Internal Revenue Service (IRS), in case they need to investigate financials for tax purposes.
Accounting Software Choices
There are accounting software packages for all companies, from Intuit’s Quickbooks for small to midsize businesses to offerings from Microsoft, SAP, and Oracle for large enterprises. Some of the distinguishing features are functionalities in expense reporting, LIFO and FIFO inventory reporting, point-of-sale integration, batch management, document management, and multi-currency transaction recording.
Also important is where or how the accounting software is deployed: on-premises, hosted as software-as-a-service (SaaS), or in the cloud. There are generic accounting software packages that can be used right away for all types of companies, while other packages require customization for the specific needs of an industry or business. As with other types of software packages, pricing for accounting software can take the form of a flat-rate (e.g., a monthly subscription), time-based, per user-based, and tiered-rates depending on the level of service.
Depending on the accounting software chosen, representatives from the software company may visit a customer’s office and demonstrate the accounting software as well as implementing it properly and securely within the firm’s accounting department.
features of accounting software
Accounting software can be invaluable for any business, regardless of size or industry.
This has resulted in a growing market for accounting software, making the task of choosing a well-performing accounting solution quite a challenge.
Every vendor provides different solutions with different levels of functionality and scalability at different price points.
Deciding on the right features and the ideal accounting software for your organisation should therefore come down to understanding which solutions are available on the market, what they provide, and how they relate to your business needs.
Here’s why it’s important for your business to have an accounting solution in place and what capabilities you should look for in good accounting software.
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The Value of Accounting Software
Some people may not think accounting software is required for their business, depending on whether they have internal accounting/bookkeeping staff or use an outsourced firm as and when they need it.
However, having access to an accounting software solution can be highly beneficial for internal teams and help to both increase productivity and minimise expenses.
We’ve previously discussed how to calculate the ROI of your accounting software, but there are also other benefits to implementing an established, reliable accounting solution.
It will allow your business to perform larger-scale accounting tasks more frequently and accurately without having to hire additional members of staff.
Accounting software is easily accessible for anyone, even non-accounting specialists, which can ease the workload on your finance team and remove to need to recruit or outsource work during busy fiscal periods.
It also ensures transparency and accuracy by presenting accounts through intuitive dashboards, providing accurate calculations, and avoiding human errors.
Accounting software performs the most essential functions that help companies fulfil their daily tasks, but it also organises and analyses accounts data to provide greater financial insights.
Likewise, it can help make an accounting team’s work easier through tax compliance features, particularly in software that is dedicated to payroll assistance, as well as automated transactions for accounts payable/receivable.
The result of this is that your business accounts team will not only be more productive but also more credible and able to process transactions faster.
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6 Essential Features of Good Accounting Software
Now that you understand the benefits offered by high-quality accounting software, it will be much easier for you to determine what type of solution your company will need.
To ensure that your company finds reliable and efficient accounting software that will accelerate your company’s growth and achieve its goals, we’ve gathered six essential features to watch out for when undertaking an accounting software procurement project.
Modern accounting software is often designed with maximum ease of use in mind. However, it’s still important to look at the software’s interface in detail to determine if it is intuitive enough to be used by anybody in your team – even those who are not accounting or tech-savvy.
In addition, your choice of software should also be flexible and highly functional. We recommend options offering multi-dimensional reporting features that enable your team to come up with reports that are customised according to your company’s needs and targets.
Integrate billing and invoicing features with inventory management
Accounting systems will have different basic functions, and almost all of them will include billing, invoicing, and/or inventory management. However, if you have all of these basic features integrated into one system, you’ll be able to cut a significant amount of time transferring or migrating data from one system to the other.
Identify and prevent errors
Accounting solutions can bring more accuracy and efficiency to your organisation. This means that errors can be minimised, if not eliminated. As such, the software you choose should have features that automatically check for errors (dynamic ones). For example, when someone places an order for a product that is currently out of stock, the system can identify the action and send an immediate alert. We also recommend looking for features such as automatic calculation, which are essential in preventing users from making errors.
Easily connect with stakeholders
Your company needs accounting software that makes it easy for you and your finance team to coordinate with customers, suppliers, banks, and all stakeholders. Documenting and checking accounts, bank statements and balances, monitoring and managing credit, and tracking payments and due dates with suppliers and customers are all essential factors in proper accounting management.
Secure sensitive data
Financial information is sensitive data, and it should never fall into the wrong hands. You should always choose accounting software that provides complete and solid security features. Purchasing from reliable vendors – one that has a trustworthy reputation in the industry – should also be a top priority for you. Look for user-based access features, as this is always a good security measure. This means that the software can only be accessed by you and those in your finance team with a permit. Additionally, their access is limited only to what their tasks are. In other words, the person assigned to payroll management will only have access to data relevant to payroll needs.
Choose the Right Accounting Software with YourShortlist
When embarking on an accounting software procurement project, you should determine how a new system will help you manage day-to-day accounting processes and achieve your company’s long-term financial goals.
Once you’ve settled on your requirements and key criteria for what you want your accounting software to achieve, you can begin to review and compare options.
Rather than waste time and money sorting through hundreds of potential options, why not speak to someone that can manage the procurement process, so you don’t have to?
At YourShortlist, our goal is to make technology procurement simple, transparent, and cost-effective by matching businesses with the right software providers.
We are recognised as a trusted, independent intermediary to IT buyers, with a rapidly expanding network of over 2400 technology Partners providing solutions in accounting, AP automation, ERP, cyber security, cloud migration, and more.
If you’re searching for the best accounting software for your business, discuss your requirements with a member of our team today to receive your free, bespoke shortlist of trusted software Partners.
What is most common software used for accounting?
Most accountants train to work with the simplest tools that generations of accountants before them used. However, There may come the point in your career that you will work for a company that too large or too complicated to stick by this traditional means of accounting.
Luckily, modernization has innovated most of the jobs around the world, and the accounting profession is no exception to that. Hence, to keep up with other professional, it is important that one learns about the latest and most common accounting software’s used in the market.
Many industries are being modernized right now including the automotive industry. Companies like Full Charge Energy are leaders in EV charging station installation.
Why Are Accounting Software Important?
Most accountants engage in hundreds, if not thousands, of transactions every single day. Furthermore, they would have to summarize and present these transactions with the highest level of accuracy possible. This rigorousness of their job is because, at the end of the period, these reports would be a major of basis of future decisions.
Before accounting software existed, they’d have to record each one these transactions of their books manually. Hence, not only was their job several times harder before, the accuracies of their reports were highly unreliable. Thanks to accounting software, all these changed.
Most Common Accounting Software
To help you find the best software for you and your business. We’ve listed below 5 of the most used Accounting software by companies today:
QuickBooks is one of the most famous accounting software in the market. California-based financial software company Intuit released the first version of the software in 1998 to cater for the need of simplified accounting platforms. Today, QuickBooks, according to the company, holds an estimated 85% of the retail market.
QuickBooks Online lets you see how your business is doing instantly.
The software is available in three variants. The first one is the original desktop version of the software. The desktop-version offered the user various services such as remote payroll assistance and outsourcing, remote access capabilities, online banking and reconciliation, electronic payment functions, and more.
QuickBooks also has a cloud-based service called QuickBooks online. The product is available to users who are willing to pay a monthly subscription which provides them exclusive access to QuickBooks online platform.
Lastly, QuickBooks Point of Sale is one of the newest offerings of Intuit. It aims to replace traditional cash registers by offering other functions such as inventory tracking, customer information, sales, and more.
Unlike QuickBooks, the New Zealander Rod Drury and his personal accountant created the software more recently in 2006 to compete with what he believed were outdated accounting software in the market.
Xero is offered as a “software as a service” product where users can access the platform by paying monthly subscriptions. Since its initial release, the product is now available in over 180 countries worldwide.
Some of the major offerings of the software are automatic bank and credit card account feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, and standard business and management reporting. Some of which are not available to others.
FreshBooks Cloud Accounting
FreshBooks caters specifically to smaller service based businesses. The original version of the software was created in 2003 by Canadian entrepreneurs Mike McDerment and Joe Sawada. Three years later they rebranded it to FreshBooks to suit the changing taste of internet users.
The all-new FreshBooks is accounting software that makes running your small business easy, fast and secure. Spend less time on accounting and more time doing the work you love.
One of its biggest advantage over its competitors is its responsive mobile app. Users can access the software while on the go making the product easy to use for freelancers and small businesses. Furthermore, it also offers some necessary functions such as cloud invoicing, reporting, and payment processing.
Launched just in 2009, Wave Accounting is one of the newest players in the accounting software market. According to their website, they manage at least $175 billion in revenue and expenses of their customers worldwide annually. The company initially offered the software as a double entry accounting tool.
Wave Accounting Inc. then made available other financial services such as Payments by Wave (credit card processing), Receipts by Wave, Invoice by Wave, Payroll by Wave, and Lending by Wave. All of which is available to anyone for up to a certain number of employees.
Sage 50 Accounting
Lastly, Sage 50 Accounting, formerly known as Peachtree, is offered by the third largest supplier of enterprise resource planning software worldwide namely The Sage Group Plc. It is a subscription-based business management software available to businesses of all sizes.
[Sage] delivers built-in accounting best practices to keep your business finances on track and help you stay compliant with taxes and reporting requirements.
Users can integrate the software with the functions of Microsoft 365 making reports easier to process. Furthermore, it offers an integrated data checker to weed out common mistakes committed by accountants, security functions that allow the users to track who is entering their database, stock management and more.