Accounting Software

Account Software Buying Guide

With the introduction of digital accounting solutions, gone are those days when keeping the accounting books used to be a paper-oriented process. The digital age has certainly made it possible even for a small business to use an affordable accounting tool for automating several accounting tasks. Right from bank reconciliation statement to balance sheets, the accounting programs can do a lot in no time for any kind of business.

Accounting software programs not only alleviates calculation errors but give you business insights that a paper document or report might not provide, such as overstocked items, sales forecasts, and highlighting the least profitable product or service. What can be more beneficial than having all financial data conciliated at one place for a business?

However, the market is filled with a variety of business accounting software that can track and manage all accounting information. However, it can be challenging to find the most suitable accounting software for your business. Nevertheless, you can simplify this task by identifying and analyzing your business needs.

You can then map these needs to the features and capabilities of promising programs for finding out the best one. Obviously, this mapping requires understanding of accounting basics as well. For meticulous but hassle-free selection, here are some features to consider.

Online vs Offline Accounting

While some accounting tools are desktop-based, many are cloud-based. The latter is in more demand for its anytime as well as anywhere accessibility for performing accounting tasks. It is better to go for a cloud-based program in case you are working with freelancers or have your business staff spread across geographical boundaries. Moreover, there is no need to download such a program and that even setting your account or business profile is quicker.

Number of Users

Most accounting apps are limited when it comes to giving access to users. A few might support only 10, while some might support 25. What you need to know here is that the price you pay rises directly with the increase in the number of users supported. However, you can also find a few applications that tend to support unlimited users at highly competitive price. The key to choose the right app from this aspect is to know beforehand how many users will have access to the cloud-based software.

Helpful Interface

If you are about to use an accounting software for the first time, it is truly nice to have a self-explanatory interface. It should be such you need not spend time in looking for options or in learning from too many videos. Further, it should not be cluttered.

Accounting Features

Several accounting apps come with several menus or modules such as Sales to create and track orders and invoices, Contacts to add and manage contact details of clients and customers, and Time Tracking for tracking the time of each employee or contractor given to a project. They also have bank reconciliation module that automatically synchronizes with your bank accounts to download data, Account Receivables and Payables to track expenses and income, and Quotes to create and track quotations.

If customization is what you need, look for an app that allows customizing its templates without any restrictions. There should be formatting options along with the utility to add your company logo. If you are looking for full automation, then ensure to have features such as automatic payment reminders, automatic invoice reminders, tracking when customers opened invoices, and adding mileage for tax returns.

Accounting Standards in Action

It is remarkable to note that many accounting tools follow different standards; a few supports single entry, while others implement the double entry practices. Similarly, many might switch to and fro from accrual to cash standards of accounting, influencing the reports themselves. Usually, businesses prefer double-entry standards, small businesses or startups might prefer the cash-accrual methods for fulfilling regulatory and reporting needs.

Reporting

Without reports, no tool or app can be complete! Therefore, look for a program that can give you maximum reports including cash flow statements, profit and loss statement, wages, chart of accounts, receivables, and payables. These reports are essential for tracking business, getting loans, and complying with reporting requirements of stakeholders. Small businesses would also love to have some more reports such as sales taxes payable, accounts receivable, accounts payable, and payroll deductions payable.

Automatic Entry of Data

This is the biggest selling point of any online accounting software, as the computer does all the work automatically. This simply saves a lot of time. However, note that this automation is not 100%, as you probably need to enter data at some point in time, which means data transfer through export or import might not be always error-free.

The bank statement data is the most common data that the software automatically enters either via a direct connection to the bank account and doing it on its own or prompting to download an electronic statement and uploading the same into the software. However, the best software picks up or learns certain things for simplifying the entry of information.

Integration with Other Apps

The ability to integrate with other tools is certainly a plus point of accounting software for exchanging data. A few services that you might wish to integrate include invoicing, payroll, investment tracking, inventory management, payment processing, project management and Customer Relationship Management (CRM). Good integration involves transferring data smoothly from one tool to another seamlessly as well as automatically. Such integrations also allows you to view all business information from one place for having a comprehensive look for unseen foresights.  

Data Security

Having a cloud-based accounting application without security certainly makes no sense. Most online accounting apps claim to give you bank-like security such as 256-bit encryption, intrusion detection, and regular server checks. They have strict security requirements for securing data from hackers and unintentional loss. Therefore, it is wise to choose such an accounting app.

Invoicing

It is vital to see how simple it is to create, send, and customize invoices. A good software allows selecting a customer based on which the contact information is entered automatically into a novel invoice. It also allows automatically retrievable invoices and adjusting pricing or quantities.

Document Attachment

The ability to attach an invoice to the software records allows linking any of your records to an image or document or image, such as a JPG or PDF. Because it is required to offer proof of every record, attaching a proof directly to each record is handy.

Several of the accounting software mentioned here are easier to use, and that a few of them are designed for users having no accounting background at all. As a fact, numerous tools are available, which can overwhelm you in selecting the best one. Nevertheless, the features described above can help you choose the ideal online accounting software with ease.