You've been doing your business accounting since ever, you know what you need, and you know the drill but want to supercharge your reporting process and focus on what really needs your indispensable input. Otherwise, you're just setting up your company, everything seems to need your focus, you're challenging your abilities and expertise on every level and accounting software to ease the headache that the running of a business brings with it sounds so sweet! Whether you better relate to the former or the latter, or even if you perhaps find yourself somewhere in between the two extremes, here's what you need to know about your accounting software.
One of the most important features of accounting software is the ability to generate financial reports, such as income statements and balance sheets. These reports provide businesses with a clear overview of their financial health and can be used to make informed decisions, invoicing and billing.
Integrated Financial Reporting
Financial reporting is a vital aspect of accounting as it allows businesses to track their financial performance over a period of time. It helps in identifying trends and patterns that can help businesses make informed decisions. Accounting software with robust financial reporting capabilities can provide businesses with a wide range of reports, including:
Income statement: Also known as a profit and loss statement, an income statement shows a business's revenue and expenses over a certain period of time. It helps businesses understand how much money they are making or losing and where their money is coming from and going.
Balance sheet: A balance sheet shows a business's assets, liabilities, and equity at a specific point in time. It helps businesses understand their net worth and assess their financial position.
Cash flow statement: A cash flow statement shows a business's inflows and outflows of cash over a certain period of time. It helps businesses understand their liquidity and identify any potential cash flow problems.
Budget vs. actuals report: This report compares a business's budgeted financials to actual financials, which can help identify variances and take corrective action.
Other reports like Accounts Receivable, Accounts Payable, and General Ledger reports
Having the ability to generate these reports with the click of a button, and the ability to customize the reports based on the business's needs can save businesses a significant amount of time and resources. Additionally, having the ability to export these reports to different formats like excel, pdf, etc, can make it easier to share them with stakeholders or use them in presentations.
Automated Invoicing and Billing
Accounting software should also have the ability to create and send invoices and manage bill payments automatically, scheduled or in bulk. This can save businesses time and reduce the risk of errors associated with manual invoicing.
One key advantage of using accounting software for invoicing and billing is the ability to automate the process. Businesses can set up recurring invoices for regular customers and set up automatic reminders for overdue payments. This can save time and reduce the risk of errors associated with manual invoicing.
Accounting software should also provide businesses with the ability to customize invoices to reflect their branding and include important information such as payment terms and contact information. Additionally, it should also allow for multiple payment methods, such as credit card and bank transfer, to make it easy for customers to pay.
Another important aspect of accounting software is the ability to track and manage outstanding invoices. This feature allows businesses to see which invoices have been paid, which are overdue, and which need to be sent out. It also allows businesses to set up reminders for overdue invoices and generate reports on outstanding balances.
In summary, invoicing and billing is a crucial feature of accounting software. It allows businesses to streamline the invoicing process, reduce errors, manage payments and track outstanding balances. This can save time and increase efficiency, allowing businesses to focus on growing their business.
✔️ Saves Time
✔️ Reduces risks of errors through automation
✔️ Tracks and manages outstanding invoices
Bank and Credit Card Integration
The software should be able to connect with a business's bank and credit card accounts. This feature allows businesses to connect their bank and credit card accounts to the software, which enables the software to automatically import and categorize transactions. This can save businesses a significant amount of time and effort when it comes to tracking financial transactions and reconciling accounts.
One of the key benefits of bank and credit card integration is that it eliminates the need for manual data entry. Instead of manually entering each transaction into the accounting software, businesses can simply connect their bank and credit card accounts and the software will automatically import the transactions. This reduces the risk of errors associated with manual data entry and saves businesses time.
Another benefit of bank and credit card integration is that it allows businesses to have a real-time view of their financial transactions. This is particularly useful for businesses that need to make quick decisions based on their financial performance. By having real-time access to financial transactions, businesses can make more informed decisions and respond to changes in the market more quickly.
In addition to these benefits, bank and credit card integration also improves the accuracy of financial reports. By having all of the transactions automatically imported and categorized, businesses can be sure that their financial reports are accurate and complete. This is especially important for businesses that are subject to audits or need to provide financial reports to investors or other stakeholders.
✔️ Eliminates the need for manual data entry
✔️ Automatically imports transactions
✔️ Real-time view of their financial transactions
Accounting software should have the ability to assist with tax compliance by generating tax reports and helping businesses stay up-to-date with tax laws and regulations in any country your business is operating in.
One important feature is the ability to generate tax reports, such as sales tax reports and payroll tax reports. These reports provide a detailed breakdown of transactions and can be used to determine the amount of tax that needs to be paid. Additionally, accounting software should be able to calculate and automatically file the necessary tax returns, reducing the risk of errors and ensuring that the business is in compliance with the law.
Another feature that can assist with tax compliance is the ability to track expenses and deductions. Many businesses are eligible for tax deductions and credits on certain expenses, such as employee benefits, equipment purchases, and research and development. Accounting software should be able to track these expenses and provide detailed reports that can be used to take advantage of tax deductions and credits.
Lastly, it's important for the software to be able to adapt to the tax laws changes, for example, if there's a new tax law that is implemented, the software should be updated and ready to implement the changes. This will ensure the business is always in compliance with tax regulations.
✔️ Assist with tax compliance in any country your business is operating in
✔️ Positions you to take advantage of tax deductions and credits
✔️ Ensures the business is always in compliance with tax regulations
The software should be accessible from any device with internet access, allowing for real-time access to financial data and collaboration among team members. The present-day term is usually referred to as SaaS or Cloud Software. Additionally, it should also have a user-friendly interface that's easy to navigate and understand.
The accounting software should also be accessible on multiple devices, such as desktops, laptops, tablets, and smartphones. This allows users to access and update financial information on the go, which can be especially useful for businesses that frequently travel or have employees working remotely.
Another important aspect of accessibility is the ability for multiple users to access and update financial information simultaneously. This can increase collaboration among team members and reduce the risk of errors associated with manual data entry. Some software allows for role-based access control and user permissions, enabling businesses to limit access to sensitive financial data to specific individuals or groups.
In addition to accessibility, the software should also have a user-friendly interface that's easy to navigate and understand. This can help to reduce the learning curve for new users and increase productivity. Good accounting software should have intuitive features, such as drag-and-drop functionality and context-sensitive help, that make it easy for users to complete tasks and access the information they need.
✔️ Accessible from any device
✔️ Increase collaboration among team members
✔️ User-friendly interface to reduce the learning curve
These are the essential features that accounting software should have, however, other features like inventory management, payroll, budgeting, and forecasting can also be important depending on the business's needs and industry. It's important to evaluate the software based on the business's needs and budget.