There’s no denying that accounting software has become a required feature for most businesses today.
Businesses of all sizes, in all industries around the world, are using accounting software programs for bookkeeping, financial records, and tax purposes – and there are many benefits of doing so.
When it comes to accounting software, the majority of tools include a range of basic features such as general ledger, payroll, journals, accounts payable and accounts receivable, and trial balance. Accounting tools tend to have the capabilities to be used for a wide range of accounting activities from basic tasks to total financial regulation of the business. Some business owners choose to use accounting software rather than hiring an accountant or accounting firm, while others will use the two in conjunction.
What are the Main Benefits?
Before you know which features you should be looking for when you choose accounting software, it’s important to understand the benefits of these programs. Accounting software solutions can help businesses in a wide range of ways. The first major advantage is that most tend to be easy-to-use, and you do not have to be a financial expert in order to use them successfully. And, accounting software can help you save some serious time with automation features that render the need to keep paper records useless. Finally, another key benefit of opting for accounting software is that there is a much lower risk of human error, allowing for more accurate records and less chance of audits and other problems, particularly during tax season.
So, what key features should every accounting software program have?
Budgeting and Forecasting
Any good accounting software program will come with a range of built-in budgeting and forecasting features to make managing the financial side of your business easier. Some key features to look out for include:
Versioning and approvals: If there tends to be some back and forth when it comes to your budgeting process, this feature will allow for more collaboration between board members and other key players, approvals, and creating various versions in order to ensure that your company comes up with budgets that everyone’s happy with.
‘What If’: When things aren’t completely clear, this type of feature allows you to apply various changes to the expenses and revenue in order to get a clearer idea of the potential financial impact of each possible decision.
Any good accounting software program will include features that allow you to keep track of your accounts payable. It should include the following:
Payment date calculating: Automatic payment data calculation can be used to help you hold payments until they are required to increase your chance of earning interest on your money.
Vendor records management: Knowing your suppliers is key for any business. A good accounting software program will include custom vendor fields that you can create quickly.
Suspicious payment alerts: No need to worry about sifting through your financial records with a fine tooth-comb if you end up shorter than you expected to be at the end of the month or quarter; your accounting software will send you an instant alert if any unusual payments leave your account.
Advance payment schedule: If you’ve always got vendors and suppliers chasing you for that payment you forgot to make, a good accounting software program gives you the option to easily schedule payments in advance to ensure that they’re always made on time and you maintain your good relationships.
A reputable accounting software program will also include a range of features to make it easier for your business to receive any money that it is owed from clients and customers. You should expect the following features:
Returned order support: If you sell products, returned orders can create an extra hassle. A good accounting software program will include features to streamline the returns and refund process.
Invoice creation and sending: A accounting software program that is suitable for your business will allow you to create and send the right type of invoice with the required fields you need for pricing information, items or services, billing, terms, and more.
Invoice duplication: A client ordered the same thing as they did last month? A good accounting software program allows you to save time by simply duplicating the invoice.
Keeping track of inventory is key to running a successful business. A good accounting software program can help you do this in a range of ways, including:
Price management: Sophisticated controls allow you to set and manage prices on a large number of items, even with customer- or volume-based discounts in place.
Serial number and lot tracking: A good accounting software will allow you to recognize not only the type of item, but also the specific unit or batch that it is from, making it easier for warranty tracking and helping you avoid unnecessary recall costs.
Landed costs: Understanding the cost of acquiring and storing your products will help make profitability clearer.
Choosing the Right Software
These are just some of the features that good accounting software can add to your business, and there are many more including payroll features and additional financial security. Of course, not all accounting software programs are created equally, and you might find that you only need a handful of the features on offer. So, it’s important to spend some time thinking about what your business needs before you pick the best accounting software option for you.
Come up with a list of the ‘must-have’ features for your business, and consider the features that you don’t really need. For example, if you sell an online service, inventory features might not be necessary for you – but strong invoicing capabilities would be. There’s extensive information online to help you compare the different types of accounting software that you might find useful, including the linked example of Wave vs Quickbooks.
There are tons of different accounting software options out there to choose from, all offering a wide range of features for your business. Consider the must-have features for your company to help you decide on the right one for you.