FreshBooks: No. 1 In Accounting Software
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What are the benefits of accounting software? You can expect the following results when you start investing in this solution. In this article, we’ll discuss in details each advantage plus the other fundamental aspects of this software category:
- Operational efficiency
- Improved accuracy
- Reduced opex
- Secure database
- Consolidated data
- Automated record-keeping
In the age of digital transformation, speed and accuracy reign supreme. This is why many businesses are choosing to automate arduous tasks that do not require extensive brainpower. From organizing financial paperwork and computing payroll to tracking inventory and preparing income tax returns, advancements in cloud accounting technology have proved useful in trimming down the hours spent on these bookkeeping and accounting responsibilities, keeping ahead of their on-premise counterparts.
With help of accounting software providers, you can get down to the nitty-gritty of your company’s finances without having to take away your focus from what you do best—managing your business. Utilizing these applications not only saves you time in handling your income and expenditures but also helps you make well-informed business decisions. This is usually done through various features such as expense management, resource planning, and financial forecasting among others. Additionally, most accounting software are designed with a user-friendly interface and straightforward setup instructions to make your adjustment period to these programs as easy and seamless as possible.
Are you still contemplating whether you should invest in financial management programs for your company? If you want accounting software explained in more detail, read on. We’ll discuss the many benefits of accounting software as well as the different features they have to offer, so you can better determine if using one is suitable for you. We also included a few examples of accounting software to help you get started. For more examples, you can always check out our top 5 accounting solutions of 2019 list.
A rich dashboard gives you a quick lookup on your key financials.
Benefits of Accounting Software
Without an accounting software, you will have to rely on your ledger and a calculator. While this process is time-tested, it could take days before you can even start analyzing the data you’ve compiled. By automating these tasks, you can accomplish more detailed reports at a fraction of the usual time. To add to that, you can enjoy these other benefits of accounting software utilization:
- Optimized Business Operations: Why waste your energy on bookkeeping when you can use it to run your business? With accounting programs, you can work smarter, not harder. Speed up your processing time by eliminating manual calculations from your daily to-do list. This helps you keep your books up-to-date without cluttering up your desk. Additionally, you can optimize your operations because you no longer have to run numbers on different applications–you can view everything on a single screen.
- Improved Accuracy: Having an accurate record of your finances is crucial to monitoring the progress of your business. Through the use of accounting programs, you can simplify aspects of accounting that may be prone to errors. Many programs can automatically make calculations as you enter data, transfer funds, and adjust assets. It can also generate analyses while reducing the chances of oversights, and if you want to check your record for miscalculations, you can easily find and correct it before finalizing reports. Some even have comment capabilities to allow you to make notes for future reference.
- Reduced Operation Cost: A remarkably small number of companies outsource their bookkeeping. This means the majority of businesses manage their finances and all the related paperwork in-house, diminishing the time they have to work on their actual operations. Now, cost reduction is but one of the many benefits that outsourcing has to offer. By installing a software that suits your business, you can save on outsourcing without compromising the creation of quality accounting reports. As an additional perk, using cloud-based or on-premise applications can help you save on printing and paper costs, as well as lessen your carbon footprint. You can read more on how much does accounting software cost here.
- Secured Database: Most accounting software can be password protected. This capability lets users protect confidential information from being accessed by unauthorized personnel. Also, by having your data stored in a software, you are facilitating its quick access, file search, and retrieval; not to mention safeguarding it from natural disasters. If your data is only accessible digitally, it is invulnerable to calamities like earthquakes, fires, and floods.
- Synchronized Files: As your company grows, the quantity of paperwork you have to track and the amount of accounting you need to perform multiplies and becomes complex. Through a software, you can access the information you need across multiple platforms and sift through computerized data without hassle. Furthermore, data migration is made easy because accounting software allows for the synchronization of online and offline databases. For your convenience, there are also applications that provide real-time status updates, so you can see the changes as they are applied.
- Simplified Tax Compliance: Tax-related responsibilities take around 175 hours per year for all companies in the USA. In other countries, they may even take up to over 400 hours. That’s a lot of wasted days that could have been used to secure new clients, create new products, or improve existing services. With the tax planning features offered by lots of accounting software, you can store receipts, invoices, and income statements in one convenient platform. Some programs even allow for integrations that let you compare ITRs and adjust calculations according to new policies.
- Automated Record-Keeping: An important facet of financial management, record-keeping can be confusing and labor-intensive. To lessen the effort you need to exert for it, various software solutions provide features that compile the data you input in different applications. Apart from merging them in one comprehensive operating system, it can also analyze business practices and identify trends in your company’s money flow. After which, it calculates your bottom line to show you where and when you are generating more revenue, which aspects of your operations you need to invest more in, and the like.
Never miss another accounts payable; bills are consolidated in one place.
Accounting Software Explained
To understand the purpose of accounting software in your day-to-day business operations, we must first understand its main functionalities and the problems it can solve. In a nutshell, it is a collection of applications designed to gather, record, summarize, and store financial data for interpretation. Programs such as these are meant to minimize the amount of effort users have to exert in computing data. Moreover, they speed up the creation of comprehensive financial reports and allow for immediate analysis of cash flows.
Some of its key features include:
- Automatic Data Backup
- Budgeting and Forecasting
- Check Printing
- Comment Capabilities
- Cost Predictions
- Customizable Reports
- External Application Integration
- Fund Accounting
- Inventory Management
- Password Protection
- Payroll Management
Types of Accounting Software
There are many types of accounting software available on the market that you can choose from. Some of them are:
- Enterprise Resource Planning (ERP) System: Commonly used by large corporations, this type of accounting software can bring your business functions together and merge them into a centralized platform for easier viewing. However, compared to other types of accounting software, this comes at a steep price and requires a long period of time to install.
- Commercial Accounting Software: The most common type of software available, ready-to-use commercial accounting programs are easy to manage. Like other applications, they can be personalized to adapt to the requirements of your bookkeeping process. So far, it is generally the most affordable option available.
- Custom Accounting Software: All businesses have unique needs. This is why companies sometimes opt to have accounting software created just for them. By going for this option, they can tailor the program according to the requirements of their operations. However, this can be more demanding to maintain compared to its commercially available counterparts.
Likewise, depending on the needs of your business, you may choose between an on-premise software or cloud-based application. If you intend on using an accounting program but want to make sure that all the data can only be accessed within your office, an on-premise software may be ideal for you. On the other hand, a cloud-based software may work best if you want to get hold of your files whenever and wherever.
With the fundamentals of accounting software explained, we can move on to steps on why you should invest in one of these programs for your company.
Tax compliance is made simple with accounting solution.
Leading Examples of Accounting Software
The purpose of accounting software is to simplify back-office responsibilities. By finding the right program, you can store, access, and process all the data you need to run your business with just a few clicks and taps. Whether you want to combine several components of your accounting tasks into one program or find specialized applications for particular facets of your business, there are options for you. Here are some examples of accounting software that you can choose from:
- FreshBooks. Widely popular among freelancers and small businesses, this accounting software streamlines your online invoicing, expense tracking and time tracking processes. It also has intuitive features for Profit & Loss, Balance Sheet, sales tax and accounts aging; plus you can create a summary of outstanding revenue with a few clicks. The software also includes a project management module, allowing you to share images and files, collaborate with clients and third parties and track project due dates.
- QuickBooks. An integrated financial software system designed for freelancers and small businesses, QuickBooks is an easy-to-manage program that lets you sync your data across devices into a single dashboard. Its features include custom invoices and estimates, instant accounting reports, payment scheduling, and real-time inventory valuation. This application also has an access privilege feature to help you select the people who can access your data.
- Xero. Ideal for startup companies and individuals who have no accounting knowledge, this software also offers a suite of tools with enterprise-level capabilities. It provides automated assistance for financial reporting, payroll billing, invoices, inventory tracking, and bank reconciliation among others. The software accommodates multi-currency data, so processing income from clients who reside in different countries is a breeze.
- Zoho Books. Designed with growing businesses in mind, Zoho Books can organize various accounting-related duties on one dashboard. From contact management and inventory organization to payment reminders and automated bank feeds, it offers comprehensible features that help you stay on top of all your financial responsibilities. Plus, it has CRM capabilities, so you can bridge the gap between your marketing and accounting processes.
- Sage Intacct. It suits businesses that are graduating from QuickBooks, adding more features to their basic accounting processes. These include fixed assets for tracking depreciation, inventory management, automated and multiple sales tax and 1099 support. Furthermore, it has bank reconciliation, trial balance and automated journal entries.
- Crunched. A cloud-based accounting software built and designed to provide freelancing professionals and small businesses with a comprehensive platform to manage their accounting, bookkeeping, invoices, payments, and expenses to name a few.