Defining business accounting
Business accounting is the process of recording, analyzing, and interpreting financial transactions and information. It is the way a business keeps track of its operations. Sometimes keeping track of these operations can be difficult, which is where accounting software steps in. Watch this video to see how accounting software can make accounting tasks easy.
Why is accounting software important in business accounting?
Business accounting involves a wide range of activities in order to capture a business's entire financial picture. Done manually, it's complex and time-consuming work. But accounting software has helped simplify these processes, giving business owners more time to focus on the administration and execution of their strategies.
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Automating tasks
Manual data entry is tedious and prone to errors. With automation, accounting software keeps manual data entry to a minimum and increases efficiency. A good accounting system requires you to enter information only once and will automatically extract your data when you need to create a transaction.
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Simplifying taxes
Tax time is exhausting for businesses. Manually keeping track all your transactions, calculating how much you owe, and filing your returns is a pain. Accounting software makes this process easier by keeping everything you need in one place. Your return reports are automatically prepared and you can file returns directly from your accounting system, without having to rely on a third-party app.
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Making data accessible
Accessing your financial data is easy with accounting software. A cloud accounting solution allows you to get ahold of your numbers from anywhere, whenever you wish. All you need is a suitable device, internet connectivity, and a web browser.
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Integrate with other business apps
Business data only grows more complex with time. Integrations allow you to access and work with your data using two or more different applications from a single place. Accounting software can be integrated with online payment gateways, CRM solutions, reporting applications, and information management systems to add sales and business management functions to your accounting.
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Reduce data loss
Backing up your papers and books is a difficult task, and most people aren't willing to copy their accounts by hand. If you don't back them up, though, you could easily lose important document. Accounting software organizes and stores data in ways designed to make your records easy to retrieve when you need them. Cloud accounting systems also have regular backups to prevent data loss.
Key features of accounting software
From basic features that keep track of the money coming in and going out of your business, to other advanced features that give you more control, accounting software offers a multitude of features that help simplify accounting tasks. The features of accounting software can vary depending on vendors.
Invoice processing
Invoicing is the basic requirement of every business. Your accounting software should let you keep track of who owes you, how much they owe, and when the payment is due. It should also offer plus additional features like automatic invoicing, payment reminders, and automatic conversion of quotes to invoices.
Learn more about invoice processing
Online payments
Collecting payments is an essential part of doing business, so your accounting software should make it easy for you. Good accounting software supports payment gateway integrations, letting you collect payments online for an experience that's easier for both you and the customer.
Learn more about online payments
Accounts payable
Keeping track of your expenses and how much money you owe is crucial for your business. Your accounting software should offer features like purchase orders, bills, vendor credits, and expenses to make the payables side of your business operations as smooth as possible.
Learn more about accounts payable
Banking
Every accounting software should offer you some link to your bank, so you can make payments and import your bank statements to your accounting system. Some software goes beyond these basic functions to offer features like automatic bank feeds, transaction matching, and banking reconciliation.
Learn more about banking
Reporting
Accounting without analyzing the numbers is fruitless. All accounting software provides financial reports to analyse the numbers and make business decisions for the future. A few accounting software options go further and support functionalities like report sharing, scheduling, and customization.
Learn more about reporting
Inventory
Inventory tracking is essential for goods-based businesses. From tracking stock on hand, to sending notifications when you are running out of stock, to making inventory adjustments, accounting software with inventory tracking can help streamline your business operations.
Learn more about inventory tracking
Time tracking
For service-based businesses that charge customers for the time spent on a project or task, a time tracking feature is a necessity. Ideally, accounting software should let businesses track their projects and hours spent, run work timers within the app, and convert hours directly into invoices. The best accounting software also offers role-based access, so business owners can collaborate with contractors and employees without sacrificing the security of their data.
Learn more about time tracking
Benefits of accounting software
- Time Saving
- Increased speed and efficiency
- Reduced Cost
- Easy reports generation
How to pick the right accounting software for your business
When picking an accounting software for your business, you need to understand your business requirements and the features you need. Here are a few things you should look for in your accounting tool:
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Free trial
Your accounting software should offer you a free trial, so you have time to evaluate your choice. You'll want to enter a few test transactions to check the accuracy of the reports and the ease of use.
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Ease of use
Accounting can be a complicated process, and the last thing you need is an accounting system that is difficult to figure out. So pick a program that has an easy-to-use interface and is not laden with unnecessary features.
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Multi-user access
Most accounting systems let businesses add multiple users to the account to ensure controlled access to data. Some systems allow you to add and invite users at no additional cost. The accounting software you pick should let you invite users and collaborate with ease.
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Automation
Automation in accounting software can help with tasks like sending out recurring invoices and payment reminders, leaving you with more time to focus on the big picture of your financial health. Look for a program that offers features to save you time and keep manual intervention to a minimum.
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Online support
The first thing you need to decide when you pick an accounting tool is whether you want an offline accounting program or an online one. Your preference might depend on your business model and type. Because of it’s advantages over offline accounting solution, more and more business are opting for online software
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Data security
If you are opting for an online accounting solution, data security is one of the most important things to look for. Check with the provider about how and where they store their data. You should also find out when the data is backed up and make sure it's frequent enough for your requirements.
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Scalable
Most businesses make the error of picking an accounting program that meets their requirements at the time. But as a business grows, business owners often find that their accounting program falls short of their needs, requiring them to migrate to another solution. Pick a system that can scale with your business.
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Pricing
Your accounting software should provide you all the accounting features you need at a reasonable price. Some accounting applications charge separately for updates and support, force you to buy add-ons, or charge extra for maintenance. Pick an accounting software that has no hidden charges associated with it.
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Technical support
The accounting system you pick should be easy to use, but it should also be able to offer you assistance if you ever need it. You should assume that you will need technical support at some point and look for an accounting tool that offers support through email or phone.
