Accounting is often one of the most-time consuming and costly parts of running a business. It requires a lot of manpower and information needs to be updated frequently in order to keep things running smoothly. Additionally, as businesses grow, accounting can become a very frustrating procedure. However, there are now numerous accounting software programs available to take all that aggravation out of business accounting. These accounting programs can help you deal with your accounting needs quickly and easily. Whether you are interested in increasing the efficiency of your employees or if you want to find a way to improve the way you function in your job, consider becoming more familiar with accounting software.
What is Accounting Software?
Accounting software packages are designed to make business accounting more straightforward, less time consuming, and (dare we say it?) even more enjoyable. Accounting software is basically any type of computer program that helps you to record and process all of your financial information. These computer programs offer unique ways to store and retrieve vital financial records and help you to process all of your accounting transactions automatically. Accounting software packages help to limit the time spent on various accounting procedures, like bookkeeping, payroll maintenance, and tax claim preparation. They also allow you to get an immediate and accurate picture of your company’s financial status.
Types of Accounting Software
There are three main types of software for accounting.
- Off-the-Shelf: Off-the-shelf accounting software packages can be bought at any well-equipped software store. They include a set of basic and fixed applications that can be very helpful for those involved in small business. Off-the-shelf accounting software is the cheapest form of accounting software.
- Purpose-Built: Purpose-built accounting software is designed to meet the specific needs of a particular company. It is usually designed by a software team for larger businesses and companies. These software packages can be very expensive, sometimes costing upwards of $100,000.
- Add-On: Add-on financial accounting software is designed to be added on to an existing software program. This type of software offers extra accounting features necessary for a growing business. Add-on features may include online bill payments or internet postage.
What are the Different Features of Accounting Software?
Every type of accounting software program offers a set of basic features. These features may be added on at a later date if the software allows for it. Most programs include the following features:
- Accounts Payable: This feature allows you to track you accounts payable, permitting you to write checks, track product returns, and even make online payments.
- Accounts Receivable: Most accounting software will allow you to track your accounts receivable. This feature allows you to receive and manage payments, print invoices, create credit memos, and track the status of incoming payments.
- Inventory: Accounting software programs often allow you to manage your inventory. You will be able to track your inventory items, create automated purchase orders, and track the cost of your inventory.
- Fixed Assets: The appreciation and depreciation of fixed assets can also be determined by using accounting software programs.
- Analysis: Computerized accounting programs provide you with the ability to create daily, weekly, monthly, and yearly financial statements as well as check on cash flow and payments that are due.
What are the Benefits of Accounting Software?
There are numerous benefits to implementing an accounting software program in your business. No matter what the size of you company, accounting software can help you:
- cut accounting costs
- save time performing accounting procedures
- access financial data quickly and easily
- prepare financial statements in advance
- improve the overall efficiency of your business
Choosing the Right Accounting Software
Choosing the right accounting software can sometimes be quite difficult, simply because you have so many options. In order to make sure that you make the correct decision, here are some tips on how to select the right program for you:
- Create a list of all the features you want your software program to have. Take this list with you as you meet with various software dealers.
- Try out demonstration products before you choose your program. This will allow you to get a sense of how easy it is to use and how well it actually works.
- Be sure to take cost into consideration, but remember, you often pay for what you get. Cheap software programs may not be up to the job, particularly if you are involved in a large business.
- Remember to take the future into consideration. If your company is going to grow substantially, you may want to get an accounting package that will grow along with it.