How to Choose Accounting Software

Accounting is an operational requirement for all businesses. It does far more than just evaluate sales, cash flows, revenues and other financial dynamics of a business. It also plays a pivotal role in calculating and predicting future growth. The ability to track your most important assets, liabilities, receivables, and payables allows you to make sound business decisions for the future based on the metrics of the past.

These days, many companies make use of small business accounting software that can handle all their bookkeeping and accounting needs. This type of software is extremely versatile, generating recurring invoices and logging all operational expenses to make a business run smoothly. From displaying visually pleasing reports to automatically adding late fees to the client bills, you can virtually do it all using one of the best business accounting software on the market.

What is accounting software?

Accounting software, sometimes also referred to as bookkeeping software, is a comprehensive, all-in-one financial logging, management, and auditing solution. Whether looking at small business accounting software, personal accounting software, or enterprise-level, most systems come with invoicing, expense management, reporting, cash-flow monitoring, and client management features. Most bookkeeping software will also auto-generate important financial documents like balance sheets and income sheets for you.

Most of the best accounting software for small businesses is available as a web-based solution, with the back-end deployed in the cloud. This makes it easy for users to access their business’s financial data from any internet-enabled device. They can also invoice, add expenses, or view important reports on-the-go without having to log on to their laptops. Small business accounting software helps businesses save a lot of time and money while improving productivity levels. It provides a digital interface to perform most financial transactions. It also automates some of the most routine accounting chores like accounts reconciliation, ledger management, and transaction matching.

Most recommended accounting software

These are some of the most recommended accounting software on the market:

Different types of accounting software

There is a wide range of accounting software available in the market to help businesses fulfill their accounting needs. Some of them provide only a few basic features such as data management. Others offer more comprehensive solutions with a vast range of features. Generally speaking, the following are some of the major types of business accounting software:

Payroll and accounting management systems

Payroll software is comprised of the fundamental tools and reports that you need to fulfill your business’ accounting needs. These systems cover payroll management as well as general accounting tasks.

This type of software has many features. Some of these features include managing accounts receivable and accounts payable, entering incurred expenses, calculating employee salaries, generating cash flow reports, and creating late payment reminders. Some of the accounting software service providers also allow you to customize your software to cater to your industry-specific needs.

Enterprise resource planning systems (ERP)

ERP systems combine all the necessary systems involved in financial planning, inventory management, accounting, distribution, finance, marketing, HR, and more. Enterprise resource management software normally consists of a range of beneficial accounting tools and reports. It also includes some other exciting features like inventory control and point-of-sale functionality.

This kind of software also often includes a customer relationship management module. ERP accounting systems are best for large companies that have many departments and a widely-distributed workforce. They are also suitable for companies that need detailed accounting records across a large and complicated system. They help streamline processes vertically throughout an organization.

Billing & invoicing systems

This type of accounting software covers the day-to-day tasks involved with check writing and updating customers about payments due. Billing and invoicing systems help maintain accurate accounting figures and are used to generate professional-looking invoices or bills to the end recipient. These tools keep track of your company’s financial activity so that you’re ready for auditing.

Small business accounting software woman looking at accounting charts

What are the benefits of accounting software?

Some of the most tangible benefits of small business accounting software include the following:

Save time

While you might think that using dedicated accounting software might only save you a few minutes each day, this time seriously adds up. Companies usually see a high ROI very quickly once users are onboarded and using small business accounting software for everyday tasks.

The software lets you generate an invoice within a few seconds as opposed to spending minutes generating it manually. You can quickly log your expenses with a few keystrokes instead of wasting time writing them down on a notepad or in a spreadsheet. A small business accounting system will also automatically add expenses to the specific client’s bill later on. Similarly, since all accounting and financial tasks are automated, your time will be freed up to focus more on other important business tasks.

Invoice customization

Accounting software also allows businesses to customize their invoices according to their needs. There are options such as the ability to choose an aesthetically pleasing theme for your invoice and to add your terms and conditions at the bottom. You can also make any invoice recurring for long-term customers, associate late payment reminders against an invoice, and add personalized notes with the invoices.

Get real-time financial overviews of your company

Life without accounting software can be laborious. For example, to generate financial statements and understand your business’s financial health, your accountant will have to do a lot of lengthy reconciliation, auditing, and calculations.

However, with accounting software, you can generate informative reports within seconds from the data that is regularly stored and sorted in the system. You can almost instantly generate current, important financial statements like cash flows or income sheets using bookkeeping software. This means you don’t have to wait around for an accountant to crunch your small business’s numbers since you’ll have all the data at the tips of your fingers.

Reduce human error

Another tangible benefit offered by the best accounting software for small businesses is that you will see an immediate reduction in human error. By automating most tasks that are normally done manually, you’ll decrease the probability of making errors. Regular, tedious tasks can cause users to lose focus and make mistakes. By automating these tasks, you’ll see more accurate reports and save valuable time fixing errors.

Current trends in small business accounting software in 2019

Accounting software has evolved enormously over the past few years. Here are some of the current accounting software trends.

Cloud accounting

There are two options available when it comes to accounting software deployment. You can either employ the solution “on-premise”, which involves maintaining the server along with any other hardware on your own. The other type of deployment is called cloud-based accounting software. This is where a company purchases bookkeeping software as a “software as a service” (SaaS) subscription. Currently, cloud-based accounting has become the norm because it gives users ubiquitous access to all their favorite features.

Automation

We’re seeing an industry-wide trend of automation, and accounting software is certainly not immune. Today, many accounting software products allow you to automate much of a business’s accounting work. Simply take a picture of a receipt to log an expense, or utilize artificial intelligence to self-learn, track invoices, costs and sales without the need for human intervention.

Best Accounting Software Looking at charts

Collaborative accounting

Globalization means that many businesses operate with employees and offices located around the world. As a result, there’s a need for these distant departments to continue to operate efficiently and within the same accounting and financial structure. They need to be able to access the same accounting information and system in order to streamline the business and avoid mistakes.

With an accounting system, data entered by someone in one location should be instantly integrated seamlessly into the system that everyone sees and uses. With the advent of multiple-user accounts, modern accounting software has provided businesses with these crucial abilities, also helping to avoid discrepancies. Multiple users can access the application at any time and can make any required additions or changes – all without running the risk of comprising the integrity or consistency of the data.

Must-have accounting software features

Not all accounting software is made the same. When searching for accounting software it’s important to decide which features are most relevant to your business needs. Below are some features that are useful for most businesses.

Visually appealing reporting

Reporting is one of the most important aspects of accounting software. If you’re in the market for bookkeeping software, make sure you carefully evaluate the reporting features of all the options. You should pay attention to the reporting settings and layouts to make sure they fit your needs and that you can easily find the information you’re looking for.  It’s a good idea to look for an accounting system that has nicely-displayed, multi-dimensional reporting.

Dashboards

Dashboards serve as a great way to quickly get an idea of your business’s financial situation. Most of the top accounting software for small businesses take you to the dashboard when you log in. This is where you can get an idea of the financial health of your business without having to do any searching. Many also have customizable dashboards so all your most important details are easily available.

Cloud-based access for multiple users

Another must-have feature for any modern company is the ability to access accounting software via a cloud-based application. It’s a must-have feature if you have employees that are on the go and need to be able to log in on any device. In this case, it’s important that the accounting software you choose also offers multi-device support, such as desktop, mobile, and tablet. Also, be sure that the software supports multiple user access so that users won’t inadvertently kick each other off when logging in to the system.

Third party integrations

Online accounting software should integrate seamlessly with your other business applications. Some important integrations include customer relationship management systems (CRM), email servers, marketing automation, enterprise resource planning management systems, and more.

Expense management

Expense management should also be a part of the accounting software you purchase for your small business. By providing an easy way to log your expenses from anywhere, accounting software can help you ensure that you pay the right amount every time.

Recommended accounting software

Above we discussed in detail the components of accounting software and what makes it so necessary for all businesses. Let’s take a look at some of the most recommended options available in the market right now.

Freshbooks

Freshbooks is one of the market leaders in the small business accounting software industry. With a myriad of beneficial features (like recurring invoices, late pay reminders, etc.), hundreds of third-party integrations, and a simple user interface, Freshbooks has attracted millions of users from all over the world.

QuickBooks

QuickBooks is an accounting software that is full of features like invoicing, expense management, vendor tracking, and billing. It’s very easy to set up and even easier to use. It’s a great small business accounting software option.

Sage

Sage is another name to know when it comes to leading accounting software. The cloud-based application is accessible on-the-go and offers exciting features like real-time financial overviews, information backups, and data syncing with your bank.

Conclusion

Accounting software can offer a variety of useful features to your business at a very fair price. Whether you want accounting software for your small business or large enterprise, the first step in your search should be to read available reviews and compare leading brands.

Come up with a list of the most important features that your business can’t live without, and carefully evaluate your top choices based on the list of features mentioned above. Harness the true potential of modern accounting technology by investing in accounting software. Not only can you save a lot of time, energy, money, and resources, you can also improve your company’s internal financial processes and evaluate your business to promote future growth.

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