Your Guide to Setting Up Accounting Software
In order to run a successful business, it’s crucial to keep all your finances in check at all times. You might think that you can handle this with a tool like a basic spreadsheet. But, as your business starts to grow, you will find the need to use advanced features that make your life easier. This is where setting up accounting software for your business can make all the difference.
There are many tangible advantages to investing in and setting up accounting software. When you’re able to analyze all of your company’s historical data, you can make informed financial decisions for the future. The investment can seem overwhelming at first, especially to small businesses or freelancers with limited budgets. The upside is that users usually see a quick return on investment their investment with accounting software, so the cost more than justifies itself.
Once you’ve determined that your business will benefit from accounting software, the next step is to understand which features are important to you. There is usually a base of features that most accounting software comes with. There are also additional features that are more specific to certain industries and functions. Below are the must-have accounting software features for almost any business.
Must-Have Accounting Software Features
Many accounting software tools have overlapping features. But as we mentioned, it’s important to understand what actions you need the tools to do so that you can have the best experience for your business. There are a number of important features that should be at the top of your list:
With most of the top accounting software companies providing cloud accounting services, you can get instant access to your most important financial data and statistics, wherever you are, whenever you want.
The best accounting applications include sophisticated expense tracking features. For example, QuickBooks allows you to take a picture of your expense receipts and save them directly on the application. This removes the need for manual data entries.
It’s really important that your accounting software will allow you to create invoices with ease and with complete customization freedom. You should have the ability to add your company’s logo, terms and conditions, or change the overall template of the invoice directly within the application.
Accounting tools also allow you to view exactly how your business is doing in real-time using visually appealing reports. These reports make use of some of the most important financial metrics like historical sales, predicted sales, increase in sales, revenue, cash flows, and receivables. The software should have a clear feature that quickly generates reports and shows real-time updates on your dashboard.
Notify your clients of overdue invoices
A really useful feature that most leading accounting tools provide is the ability to automatically notify clients of outstanding fees or charge late fees on overdue invoices. This means that you no longer have to manually add the fee and notify your client of the change. The application will do that for you based on delivery dates and deadlines.
Steps to Setting Up Accounting Software
Every tool has its own set of features which will help you manage and grow your business. If you are thinking about purchasing an accounting software (or already have), we have detailed the initial steps to take when setting it up. Let’s get started with what you’ll want to cover perform before installation:
Collect all payroll information beforehand
If you intend to use your tool for payroll management, then make sure you have information regarding your workforce’s salaries, the withholding, any applicable taxes, and company deductions. Setting up the payroll can be a cumbersome task so make sure you have all the information beforehand.
Be aware of applicable sales tax regulations
All your sales tax will be tracked within the accounting application you choose. So make sure you are up to speed with the current regulations of your city, country or state.
Clients and vendors
A good first step is to compile a list of your vendors and clients. Most accounting software allows you to add your clients and record any and all expenses from your vendors. If you have all the information before installation, it’s much easier to import them afterward.
Be ready to face obstacles
If you haven’t used accounting software before, it might take you a little time to get the hang of automated accounting software. The best way to learn the software is to take advantage of the support available and any training tools offered. Check out the product videos and onboarding materials. Many applications have support staff available to help with setting up accounting software you’ve recently purchased.
Define levels of access control
Accounting software allows you to restrict the levels of access for different users and set corresponding permissions. Make sure you figure out all the access settings prior to installation.
8 Post-Installation Steps to Follow
After setting up your accounting software, there are also a few important steps that you need to perform.
1. Continue manual bookkeeping
Don’t discontinue manual bookkeeping right away. It’s suggested to do it on the side for a little while. This applies if you have been doing any form of accounting prior to making the accounting software purchase. Don’t forego your previous methods and supporting documents the moment you buy the tool. Try to run both mechanisms side by side for the first few months just in case you decide to switch your accounting software to another product.
2. Take baby steps
Don’t try to get everything set up within the first few hours if it’s your first time running an accounting application. It’s a recommended practice to set up a sample company first and try playing around with it first. This will allow you to get acquainted with the application before you start adding sensitive financial information to it.
3. Become familiar with invoicing
Create a few invoices and send them to pseudo clients. While you are still playing with your sample company, customize a few invoices and send them over to your own email or a colleague’s email. This will help you understand how the whole process works so you don’t make any mistakes once you send your first real invoice.
4. Learn expense management
Log a few sample expenses for sample vendors. If your tool provides intuitive ways to add expenses to the system (e.g. via photographs), make sure you try that too.
5. Create monthly financial statements
Create monthly balance sheets and profit and loss statements. Most accounting software automates this process for you so make sure you take advantage of this feature to the greatest possible extent.
6. Set all your company preferences
This can include associating late fees with overdue receipts, creating recurring invoices, sending late payment reminders, and adding interest rates.
7. Keep tabs on your cash flows at all times
Using the dashboards in your accounting tool, make sure you are aware of your receivables, expenses, received payments, and liabilities at all times. This will allow you to monitor your business’ financial health without missing a beat.
8. Help & Support
Make use of the help and support center whenever you feel the need. Most service providers have dedicated support for paid customers along with detailed FAQ sections and video tutorials.
Accounting software can make the lives of businesses and freelancers more efficient and productive. Manual bookkeeping is becoming less common, and with accounting software, you save a lot of time. This eventually helps you in prioritizing other important business tasks and improving productivity levels. By automating invoice creation, expense management, client and vendor tracking and giving you instant access to your business’ financial health, accounting software allows you to stay in control at all times. Check out some of the best accounting software here and get started today.