Most business owners know that accounting is one of the most (perhaps even the most) important aspects of running a company. Without organized finances, a business can crash and burn quickly. After all, the ultimate goal of any company is to turn a profit. Without accurate financial statements, it’s impossible to tell if the business has a profit or loss. These financial statements help owners and investors see the financial gains generated by their investments. They also help CEOs and financial officers determine where to cut back on expenditures and which budgets to increase. If any aspect of a business needs software, it’s the accounting department. With accounting, there are so many numbers and so much data to input that it’s easy to make an error — even for the pros. Thankfully, there are tons of different accounting software programs available. The best ones are easily customized to fit a business’s particular needs.
Basic Accounting Software Features
Because there are so many accounting software options available, it’s easy to find one that fits the user’s requirements. Each business is unique, but here are some common features that users consider before making a final accounting software purchase.
1. Key Accounting Features
All accounting software should include basic accounting functionality. This includes a general ledger, chart of accounts, invoicing, account reconciliation, payables and financial reports. The benefits of accounting software for these simple functions are enormous. One user reported that Freshbooks “increased the time [her] clients pay by 100%.”
2. Payroll and Time Tracking
If the company has its own employees (versus contracted employees or those employed with an agency), then payroll is a great option. Almost all payroll software includes time tracking, which is helpful for hourly employees or businesses that keep track of individual job costs. Some payroll software also include some tax integration as well.
3. Expense Tracking
If the company’s employees regularly turn in expense reports for reimbursement, some accounting software offer an option to keep track of these expenditures.
Specialized Accounting Software Features
Beyond these key accounting features, there are also more complex, specialized functions that accounting software can perform.
Many companies use multiple types of software, such as CRM or ERP systems. For these businesses, it’s important to make sure the accounting software easily integrates with other systems already in place.
2. Complex Accounting Standards or Tax Codes
While most companies will benefit from standard accounting software, some industries have more complex accounting standards or transactions that are affected by complex tax codes. In addition, there may be local or state regulations or tax codes that need to be included in financial reporting or routine tax filings.
3. Ease of Use
For a new company, any accounting software should be simple to use once the accountant has been trained. However, many companies or accounting departments already have their own strategies and processes in place. If possible, it’s best to find software that works well with these techniques so the transition is as smooth as possible.
4. International Utilization
If a company operates outside the United States or regularly works with clients from other countries, internationalized accounting software may be necessary. Not all software includes support for foreign currencies, so these businesses may have more limited software options.
Every Business Needs Accounting Software
Without a doubt, it’s imperative that every business purchase and regularly use an accounting software. In fact, it should probably be one of the first purchases that a new company makes. Thanks to the vast number of software options, businesses can find the perfect software for their needs.