Technology Counter Accounting Software Software Buyer's Guide
Modern businesses need a comprehensive and automated solution to manage their financial transactions. Gone are the days when an accountant could handle a significant volume of financial data for an organization. This accountant would also prepare the firm’s financial statement and help with the day-to-day financial management tasks.
But, in today’s competitive market, businesses need to focus more on productive activities rather than spending their valuable time and money on drafting financial statements. Accounting software can automate a range of financial tasks. It helps minimize the risk of manual errors, which were quite common in manual entries.
What is Accounting Software?
Accounting software is an automated computer program that is designed specifically for accountants and bookkeepers. It helps you record and reports multiple financial and monetary transactions in a systematic manner. Accounting software can vary from vendor to vendor. It also depends on the type, size, and requirements of the company. For instance, a large-scale company will need a comprehensive solution that can hold a considerable amount of data seamlessly, while small businesses may stick to off-the-shelf accounting software.
Having an automated computer solution for recording and reporting monetary transactions will not only save you plenty of time, but it is a cost-effective method to store a vast amount of data. The cloud-based accounting software does not even consume your office space. It runs on all devices and is compatible with smaller screens. The best accounting software is the one that reduces the total accounting cost and streamlines your management operations. Whether you want to record the journal entries or record a large volume of financial data, an accounting solution can manage everything.
Now that this automated software handles all your financial records and data, you don’t need to rent additional storage rooms to house binders of data. The lesser the office space you use for storage, the lower your working capital cost will be. Accounting and bookkeeping get a whole lot easier with the best accounting software. You can complete financial audits, access any information you want in simple clicks, and prepare automated financial statements from the comfort of your home. That’s how convenient it gets when you install a high-quality accounting management solution in your firm.
The modern financial accounting software can be accessed on smartphones and desktops (as long as you have a stable internet connection). In fact, you could run the system on any device as long as you choose a compatible system.
Common Capabilities of Accounting Systems
So, what all features do the account payable software offer? How exactly does it function? Do you get a chance to select the module you would like to integrate into the system? It is quite normal for business owners to think that an accounting solution offers a simplified accounting and finance management.
But, its modules go beyond the basic accounting. It comes with many add-ons that help you streamline your day-to-day management operations in the smoothest way. Here we are going to mention some of the important account and finance software features:
As the name implies, the primary function of the accounting management system is to handle accounts. It helps simplify the work of accountants and bookkeepers. That being said, accounting should be the first module you must check when investing in this automated finance solution. The common things that cross our minds when we hear the word accounting are bills payable, bills receivable, fixed assets, journal, ledger, trial balance, profit & loss account, and balance sheet. These are the basic accounts that all types of account keeping software handle. But, the advanced solutions come equipped with various add-ons.
Billing and Invoices
Some accounting software is specifically designed for billing and invoicing purposes. Their main components include billing and invoice modules that help businesses calculate and automate invoices and payments. However, most vendors consider similar functions as a vital part of a business. That is why they add all the integral financial and accounting modules to small business accounting software.
The invoice module can be customized according to your payment standards. It can generate automatic invoices and send them to the clients. The module helps businesses generate 100% accurate invoices and mail them to the customers in a timely manner. Some accounting solutions allow employees to clear their invoices right when you send them the electronic invoice via mail.
Just like the account receivable module, the accounting solution features the account payable system that helps businesses keep track of their monthly utility bills, credit repayments, payroll, and payment to the manufacturers and distributors. The accounting system manages both the cash inflow and outflow. It schedules automatic payments, which means the software supports direct deposit. Now, you can pay directly to your manufacturers, employees, and business associates via bank.
Likewise, the account payable software can generate purchase orders and allow you to make online payments. It manages your purchases quite well.
Budgeting and Forecasting
This module automates the calculation of the financial performance of the business for the previous and current years. It also helps with budgeting. You could use this system to set an appropriate sales target and plan the best and feasible budget. Based on your financial performance, you can plan your future financial goals as well.
Fixed Assets Management
Accounting isn’t just about the income and expenses of your firm. As mentioned before, it is supposed to execute multiple tasks. One such important function includes fixed asset management. This inclusive module enables business owners to handle a large amount of financial data efficiently. It manages cost records, depreciation on the plants and machinery, resource allocation, audit history, and so on.
One of the most crucial components of the best accounting software is payroll management. You owe compensation to your employees. In order to keep their motivation and offer them an accurate salary or wages every month, you need a dedicated accountant that calculates their salaries based on their performance and attendance. While startups and small-scale companies could manage it without a payroll module, large-scale and medium-sized companies need an effective payroll management solution to calculate and disburse employees’ salaries.
The good news is that you don’t need to invest in payroll software. The accounting management solution features a payroll module that calculates employees’ payment and prints their paycheck every month. The payroll solution calculates the payment according to the current compensation regulation in your state. You can even customize the solution based on the payment norms you follow. The module deducts the off-days and benefits from the final amount. Overall, you can rest assured that payroll in account management software will calculate 100% accurate compensation for your employees.
The module deducts tax and other benefits automatically. If your employees want direct deposits, then you can choose bank payments using this module. No need to print paychecks. Calculate the amount and make payments online. It is the safest way to clear your employees' salaries and make the necessary payments.
The inventory module is designed to control stock and track your Inventory Management status. It gives you complete access to your warehouse inventory. Now, you can track the movement of your inventory and the availability of products in the warehouse efficiently. The module avoids understocking and overstocking issues.
Using the automatic ordering system, you can avoid over and under order problems. You can track your inventory online and prepare the purchase order straight away. This helps you avoid unnecessary stock in your warehouse. In fact, some advanced inventory management modules support multiple warehouses. They track the status of inventory in different warehouses in one system.
In addition to the array of functions the accounting management solution offers, it has the ability to generate accurate reports. Some solutions offer the standard reports that include income statements, profit & loss accounts, accounts payable, payroll, and etc. Others offer additional financial reports that help you compare your current financial position with previous years. Some reports are customization, which means you can modify the width, length, and size of the column.
Who Uses an Account Management System?
Accounting receivable software is used for eliminating costly human errors. It simplifies the calculation process and ensures smoother management. Accounting software has become a necessity for all types of businesses and self-employed individuals out there. It isn’t optional anymore. Processing a large volume of data manually or leaving all the accounting and financial management tasks to your accountant do not seem a wise decision. No matter how many accountants you hire, you are going to need an advanced accounting system that records the sensitive information, generate quality reports, help with inventory management and payroll calculation, and the list goes on.
Startups, SMEs, large-scale organizations, and all types of businesses need accounting software. In order to automate the mundane financial management tasks, you will need to install a high-quality and premium solution. It might not guarantee success, but it does help streamline your account and finance management operations.
Why do you need Accounting Software?
We have discussed the meaning, purpose, and features of the financial accounting software. But, the question is why do you need one? Of course, it automates your management tasks and streamlines the day-to-day financial recording and reporting. But, it does a lot more than storing information and drafting financial statements.
A high-quality financial solution is capable of showing where you could cut expenses and boost productivity. It helps you with decision making and promotes a steady growth of your business. Here, we have mentioned some important reasons why you need an accounting solution.
The first and most important function of an accounting solution is the automated calculation. You don’t need to hire a professional account to operate this automated system. Even inexperienced business owners who have little to zero knowledge about accounting can run accounting software.
Instead of paying an accountant every month, why don’t you integrate this premium solution into your business and perform all the necessary financial operations on your own? You don’t need any prior training to operate it. After all, the accounting system is designed to automate financial tasks. It does all calculations smoothly.
Even small business accounting software can handle administrative operations seamlessly. With a high-quality and premium accounting solution in place, businesses do not need to outsource finance and account management to experts. Not only does it save your labor expenses, but an accounting system can save printing costs.
It enables businesses to go paperless with every financial record and the entire database stored securely in the software. You may need to pay a monthly fee to the vendor, but that is going to be nothing compared to the hefty accountant fee.
One of the major advantages of an advanced accounting solution is that it minimizes the chances of costly human errors. Recurring errors in accounting and bookkeeping can lead to delays and unnecessary losses. In fact, the regular errors and failure to report data in a timely manner can result in a business crisis. That’s when automation comes handy. It gives you financial transparency and helps avoid errors. Now that every calculation is automated, you can rest assured that your finance and accounts are managed well.
Gives Easy Access
Businesses of all sizes need to store financial information. You will need real-time data to promote your business and make strategic decisions. Having the accounting software implemented in your business, you can rest assured that all your financial information and accounting data will be accessible to you. You can generate real-time financial reports and access any information you want.
The business owner can grant the software access to the selected employees in the firm. You could provide the employees with their login credentials and allow them to access certain modules of the accounting solution.
They will be able to operate the system anytime and anywhere. Similarly, you can restrict certain members of your firms from accessing the accounting system. You can set up an account for the members and staff you want to use and operate the accounting solution. That’s how easy it is for your employees to record the day-to-day financial transactions and create financial statements.
Allocating your financial resources in the best places is one of the major challenges for businesses. In order to plan the best management strategies, you are going to need to know the current financial position and plan your management accordingly. It gives you a clear picture of your total earnings, investments, unnecessary expenses, and financial trends.
It might seem easier to manage finances and accounting for a startup. But, as your business grows, you will have to manage a significant volume of data. If you spend all your time managing your finances, how are you going to focus on productivity? Accounting software is the first step to digitizing your business. It collects, analyzes, and stores sensitive data of your company. With an advanced small business accounting software, you can focus fully on productivity.
Most accounting and GST software are capable of handling taxes automatically. These systems are designed in a way that they adhere to your state’s tax regulations and perform all the calculations according to the current financial and accounting laws followed in the country. You can make the GST software the number one source of audit as well as tax information.
You can store your tax, audit, reports, accounts, and other confidential information effectively. Moreover, you don’t need to study the current financial and tax laws anymore. Even if there is any change in tax compliance, the GST software will update automatically.
With the accounting management software, you will have the updated records of inventory, customers, employees, sales, purchases, and other components of your business. You cannot manage a vast amount of data in a spreadsheet. Even if you do that, you are going to have a hard time managing all this information.
Asset Management Software can help to avoid data management issues. It helps control the frontend as well as backend accounting operations. It saves you plenty of time on recording and managing data. You no longer need to spend your time on manual activities. The system will take care of all the hectic management tasks.
Better Customer Relationships
You might argue that accounting solutions have nothing to do with customer relationships. But, that’s not true! A majority of vendors are focusing on building accounting solutions that offer seamless invoicing and billing functions. They prevent unnecessary delays and simplify communications.
Businesses can personalize the solution according to their requirements and enjoy effective management. Customers like to collaborate with companies that ensure seamless management operations. With effective billing and smoother financial operations, a financial system can improve customer relationships.
You cannot afford to lose or hand your financial information to the wrong people. The financial data of a company happens to be the most valuable and sensitive information that needs to be protected from outsiders. Security is one of the main functions of accounting management software. It keeps your data safe. Not only does it protect the data from getting jeopardized, but an accounting system keeps a copy of all your databases to retrieve the lost information. You get to decide who you want to access your software. Business owners can limit their employees from accessing certain information.
Market trends to understand account management software
Just like any other industry, we have been witnessing several trends in accounting management software. Automation has become quite mainstream. Nowadays, software developers are trying to integrate artificial intelligence and machine learning into accounting management systems. The main goal is no longer limited to basic accounting and mundane financial management tasks.
It is rather about the overall financial growth of the company. The main purpose of the accounting solution is to automate as many hectic manual tasks as possible. Now that a majority of manual activities are automated, accountants and managers can focus on improving the firm’s productivity. They can focus on marketing functions and other such productive and important activities.
Earlier, businesses had to implement the standard and common accounting software that worked according to the one-size-fits-all approach. These solutions were not customization, neither were they capable of offering seamless integration with the third-party apps. Account keeping software has changed a lot in recent times. Vendors are more concerned about the quality of the solution. They put industrial requirements before everything.
The current market trend in the accounting software development industry is the company-specific and latest accounting software, which means an automated accounting and financial system that caters to the specific industrial requirement. As mentioned above in the post, the accounting software is customization. You get to decide the features and modules you want in the system.
Depending on your business structure and the basic practices you follow, you can select your industry-specific modules and pay accordingly. Make sure that outdated and traditional software will not help you progress or boost your productivity. It will only perform the mundane accounting functions because this is what this standard software is designed for. Sooner or later, you are going to have to replace the system with the latest accounting software. So, why not choose a wise option in the beginning and save some bucks on a replacement. It is extremely important to consider the current market trends and select an industry-specific solution that fits your business structure.
The rise in the machine-learning and AI-powered financial and accounting management has surprised quite a lot of businesses. According to the surveys and reports, the growth in AI-powered accounting is never going to end anytime soon. More and more people like the idea of leaving the hectic tasks to machines, while allowing humans to focus on more productive activities.
One of the major functionalities of the accounting management solution is the automation of tasks. Machine learning makes the overall computation a whole lot faster and easier for the accountants. Now, they will not have to waste their time on calculating employees’ salary or deducting taxes. It supports effective and faster calculations, easy fraud detection, minimized errors, and high productivity.
According to the research, software developers are trying to improve accounting solutions in terms of automation. They are now more focused on introducing changes that could automate the entire workflow. Their major goal is to automate as many mundane activities as possible so that a heavy workload burden is lifted off the accountant's shoulder. In simple terms, workflow automation is increasing by each passing day. Sooner or later, there will be no financial operation or accounting that needs to be performed manually.
Cloud-based Accounting Software Only
Gone are the days when companies would implement those complicated, on-premises solutions that took months for deployment. Still, there are many companies that rely on on-premises solutions to record their sensitive financial data and generate reports. However, software developers have started focusing more on cloud-based solutions. More and more companies will embrace this new market trend and install an automated system.
Type of buyer and which solution best fits buyers needs
While there are many types of accounting solutions on the market, you will need to select the one that fits your business requirements. Pick a solution that could be customized with your fast-growing company. One of the major concerns when it comes to selecting an accounting solution is the total price you are ready to pay every month. You will need to prepare your budget and choose a solution you can afford.
Small Businesses - The accounting software you choose for a small-scale firm can be a standard solution. You can fully customize the software according to your business structure. For instance, you don’t have to pay extra for the modules you don’t want in your business. For example, inventory management is an optional module. You can add it if you have multiple warehouses and a lot of inventory to handle. But, if that’s not necessary, you can simply have it removed from the system. There are many bookkeeping software tools that are designed specifically for small-scale firms.
On-premises and Cloud-based Solution - You can choose a cloud-based or the on-premises leading accounting software. Though on-premises software is quite outdated and is considered as a traditional form of automated accounting solution, it is still used in conjunction with the cloud-based system. Depending on your business requirements, you can set up the on-premises accounting system or install the cloud-based solution (whichever fits your requirement).
Choosing the best Accounting Software vendor
The definition of the best accounting software can vary from business to business. It mainly depends on your business requirements, priorities, and more. But, before you invest in the accounting management software, you need to keep a few things in mind. Here, we have listed some important factors to consider when selecting a financial accounting and management system for your firm.
Each company follows a different accounting and financial management structure. They adhere to different sets of laws. That being said, it makes sense for businesses to choose a solution that fits their business requirements. A one-size-fits-all approach does not work.
You will need to find a vendor that offers a full customization solution that can be modified according to your requirements. If the solution is way too complex to be customized, then look for a customization option. A flexible program is the one that can be adjusted according to your financial and accounting operations.
Ease of Use
Accounting calculations and financial statements are two of the most complicated tasks for a company. Your account keeping software must offer flexible and easy-to-use features. It must have a user-friendly interface and a robust dashboard. The information must be presented as neatly as possible. Moreover, navigation should be simple. Some businesses do not even need the training to understand different modules of the accounting management software, while others end up spending hundreds of bucks for training.
As mentioned before, bookkeeping software tools are supposed to store the most sensitive data of your business. Your financial statements, accounts, and other financial records are stored in the accounting software. Make sure you choose an established and trustworthy company for shopping for the best accounting software. You are going to share information, give software access to different employees, and perform regular finance management operations. So, security should be your number one priority.
Connectivity or integration is an important component of the accounting software. Maybe, you already have multiple cloud-based and on-premises solutions. The account keeping software you choose must be compatible with integrations. It must be easier for you to integrate the solution with different systems rather than having to change the whole software infrastructure. The best software is the one that allows open API so that users can integrate all sorts of bookkeeping software tools with the accounting system effortlessly.
Gone are the days when mobile-friendly accounting solutions were considered a luxury. Today, even small businesses prefer a finance management system that offers universal compatibility. In fact, most vendors offer iOS and Android apps that enable businesses to use the solution from the comfort of their homes. They can run any module, perform all types of calculations, and enter financial information conveniently. These apps are similar to the desktop version. So, mobile compatibility is a must in the accounts payable software.
The price of the software will depend on the number of modules you integrate into it. The more you expect from your software, the higher its price will be. If your business can afford a high-quality, advanced, and leading accounting software, then invest in it. Price varies from vendor to vendor. Some companies offer a full-featured and customization solution at a reasonable price, while others charge a hefty fee.
You never know the efficiency and reliability of a customer support team until you have a technical issue to report. Many vendors claim to offer 24/7 support, but they take days to consider your issues, let alone fixing it. So, if you don’t want to end up disappointed with the customer support, make sure to check customer service in advance.
Some vendors include FREE training with the enterprise accounting software. Training can help your employees and business associates to get familiar with the modules and applications of the system. It gives you an idea of how to use the system.
Assuming that you have read the post, you must have an idea of what type of accounting management software will be the most suitable option for your firm by now. Before making a final investment in the small business payroll software, try the free demo. Most vendors give you a quick tour around the software and explain each module in detail. So, feel free to sign up for the free trial or get a demo to familiarize yourself with the software functionalities.
Make sure that you don’t base your decision solely on price. Never invest in a solution that lacks integration and customization capability. Hope you found this post helpful.