Accounting software isn’t usually described as exciting, intriguing, or mysterious. Despite its perceived reputation as a dry subject, accounting software is an essential tool for businesses of all sizes. Choosing an accounting tool that is able to integrate seamlessly with other programs will save your business time, money, and headaches.
Choosing an accounting software package is kind of like buying a golf bag. There are a million to choose from (not literally), and you want to make sure you get one that fits your specific needs (comfort, stability, ease of use, etc.). While shopping around, there is one question in particular that you need to consider: Will the clubs I want fit in the bag?
If your accounting software package is your golf bag, the software that integrates with it are your clubs—it’s not necessarily how many clubs fit in your bag that’s important, but having the right clubs definitely is.
As your business grows, so will your need to add additional software packages: payroll software, billing software and accounts payable/receivable, to name a few. To prepare for this, it’s important to think about the long-term impact of your accounting software choices. More specifically, you’ll need to account (sorry) for all of the additional products you want to integrate with your accounting package.
Payroll – Payroll software is essentially a digital substitute for old-school accountants who calculated pay and wrote checks by hand. After setting up an employee with their pay rate and tax status, this software can cut checks, record important tax information and record vacation and sick days.
There are many reasons why you should integrate a payroll program with your accounting software package. An important one is that your payroll system shows employee records, total wages paid and tax deductions. If the system is integrated with your accounting software, all of this information can be included in your financial statements automatically––this helps ensure accuracy when tax time rolls around. If the system is not integrated, it can leave a major hole in your financial statements. Without automatic updates, paychecks and other important information need to be entered manually into your accounting system. Unless you have Alan Turing running your books, it’s likely that manual input will lead to errors and duplications. As is true in most things accounting related, accuracy is key.
The development of accounting software has helped the traditional methods of invoice management—such as tracking identifying numbers, recording payments and keeping a cash receipts log—become more efficient. Integrating with accounting software allows for a much wider range of customization and editing options. Basically, it lets you personalize your invoices with whatever you want (your logo, specific payment terms, contact information, etc.). Most billing tools also come with some form of editing capabilities, allowing you to easily correct mistakes as opposed to starting from scratch. This will save you time, confusion and, most importantly, money.
Simply put, accounts payable/receivable software has automated controls to help track the money your company owes and the money you have the right to collect. When it comes to accounts payable, tracking and viewing payments, finances and reports is much easier if the data is connected to your accounting tool. The same thing goes for billing analysis, tracking invoices and staying organized with accounts receivable. These tools are a must if you aren’t planning on having an annual party with the IRS.
As you can see, thinking about what types of integrations you need for your accounting software will not only save you headaches, but will also save your business time and money. While some of these features are included in certain accounting software packages, it’s helpful to pay attention to what they have and what they work well with. It’s important to consider these integrations early on so you don’t end up wasting time and effort to streamline your finances. All in all, our hope is that these points will help you choose the right clubs for your bag.