While selecting accounting software for your business, it becomes very important to understand the needs first. Not only that, but you should also know about what features to look for before you start.
Currently, the market is full of different accounting apps that come with various capabilities. So, it can be a very difficult task for businesses to select a specific system.
Though it also helps in prioritizing the features you want based on pricing, usability, and accounting needs. This guide tells you about some of the integral features in the accounting software which can help you to select the best system for your business.
Various Accounting Features to Consider
Accounts Payables and Receivables
Almost every accounting system helps to record both the accounts payable or the specific money which you owe your vendors and the accounts receivable or the specific money which your customers owe you.
Accounting software also helps in the efficient management of the receivables. This involves the creation of professional invoices, using the payment gateways at the time of collecting online payments, and sending the payment reminders.
With its help, you will be able to know how much you have to pay to your customers. Your software will be very helpful to keep tabs on your payables which involve operating expenses and vendor bills. As a result, you will receive reminders that help to ensure the employees are paid on time.
Accrual Based and Cash Based Accounting
For doing accounting for your business, you can use any of the two methods – the accrual method and the cash method. The cash accounting method will suit you better in case you are a small business and record transactions based on cash in flows and outflows.
But, in case you have a large business, the most suitable method is considered to be the accrual method. This is applicable also in the case if your business records account payable and receivable and buys and sells on credit.
Nowadays, several companies are focusing to start accounting by making use of the cash method. After that, they switch to the accrual method with the growth of their business. Your accounting software should be able to provide the necessary opportunity for your business to select between the two methods. It should also let you make the transition from the cash method to the accrual method smoothly.
Payment gateways tend to provide a secure and safe online payment means to your customers. You can offer multiple and convenient payment options such as debit cards, credit cards, and online bank transfers by integrating with the payment gateways.
The status of the conforming invoice will be automatically updated in your system whenever the payment is completed through the gateway. In this regard, a wide variety of payment gateways are present where they charge diverse transaction fees for your transactions.
As soon as you find your preferred gateway, you need to make sure that the accounting system which you are considering connects to that particular payment gateway.
Time Tracking and Projects
You will need such accounting software that can easily handle the project-based billing at the time you run a business that undertakes the client’s projects. Also, you can bill your clients on an hourly basis or by setting a fixed cost for every project.
All that you need is to look for such software which helps to track the time that you spend on individual tasks in case you bill based on time. After that, you will be required to convert those timesheets into invoices.
To prevent incorrect billing, you need to make sure that the system lets you approve the time records before the creation of invoices from them.
This is considered to be an integral part of your accounting. All that you need is to opt for such an accounting software that can help you in fetching your bank statements automatically.
With its help, you can also set up custom criteria along with the bank rules which automatically categorize and match your imported bank transactions. Again, this will allow you in the quick reconciliation of the accounts and keeps your business audit-ready.
One of the major benefits of good accounting software is to be tax ready. Your accounting software should be able to calculate your tax liabilities and work with multiple tax rates and generates tax reports.
This will help you to comply with the tax rules on time which are laid out by the government and avoid the penalties.
Another integral feature of an accounting software is known to be automation. This helps you to achieve more in less time. You can automate recurring transactions at the billing and invoicing level with the help of this feature.
Apart from that, you can send out payment reminders to your customers and auto-charge credit cards of the customers for recurring payments.
Auto-scan is considered to be another major feature of the accounting software automation which aids you to capture data from the receipts and ultimately convert it into transactions with less effort.
In this regard, it becomes important for you to concentrate more on the core accounting process by effectively selecting accounting software that ends to reduce manual intervention and automate tedious processes.
This feature is responsible to make your accounting software much more flexible. Along with that, they allow you to work with diverse apps and for this, you do not have to leave your accounting platform.
Any sorts of the changes which are made in the integrated applications are updated automatically in your accounting platform. This effectively helps to remove the need for repeated data entry.
For example, the information of your customers will be linked to your accounting system by the integration of CRM software with your accounting software. Also, any of the updates made in the CRM will be reflected in your accounting app. As a result, all of your teams remain on a similar page.
The accounting software that you select should be able to integrate with third party services such as project management tools, CRMs, inventory management systems, and much more.
It is very important to monitor the health of your business efficiently. This is possible by keeping track of your business performance by selecting such a software that can generate financial statements like income statements, balance sheets, and cash flow statements.
The software selected by your end helps in the generation of reports for diverse accounting departments such as projects, inventory, accounts receivable, and payable along with taxes.
These reports will tell you about the performance of your business in certain areas. Also, you will get to know about the specific areas that need improvement and where you are doing well.
Features Related to Usability
The processes of accounting are not very easy and so, you should be very careful while choosing the software for your business. Also, the software that you select should provide an environment that works with your financial data easily.
A neat user interface helps you spot integral aspects related to accounting. It also involves built-in functions for doing your calculations related to accounting. This will eventually ease the overall work for you or the staff handling your accounts.
The software which you choose should be very easy to navigate and it should complete your tasks as quickly as possible.
We all know that financial data is considered to be very sensitive. So, the accounting software which you select must provide high-security levels for protecting your crucial data.
It is important to opt for the apps from renowned vendors which tend to provide Two-Factor authentication, encryption, and secure communication. But, before you start using them, you should be well aware of their security mechanisms.
Mobile versions of the cloud-based apps allow flexible as well as easy access to your numbers. Also, you can manage the overall business accounting process when you are not present at your workplace.
You should select mobile versions of the software in case your work requires frequent traveling. This will let you accomplish your accounting easily on your desktop or the mobile device.
Specific accounting areas need to be kept secure from unauthorized access. As the admin, you must decide who exactly gets access to what. The presence of the best accounting apps on the markets lets you give role-based access to your employees to certain accounting modules.
For example, you can exclusively designate employees as timesheet staff to provide access to the timesheets so that they can log time for their specific tasks.
While you are selecting accounting software, it is important to ensure that it provides selective access so that you can also limit your data to the authorized personnel.
Features Related to Pricing
Most of the accounting solutions are available with multiple packages with diverse price points based on the specific features that they include. One should look for an overall plan which is inclusive of the multiple user fees, maintenance fees, and support fees, and there are no separate charges for basic features.
The software selected by your end should provide a free trial. The free trial provides you an idea regarding how your software works. This lets you ensure that all of your requirements are effectively met by the system before investing in it.
The accounting process needs to be initiated in the right way. Accounting involves keeping a track of integral business processes such as bank reconciliation, accounts payable and receivable, billing and invoicing, reporting, and tax compliance.
It can be a difficult task to get everything in the right way. But good accounting is considered to be essential for the success and growth of any business. The initial steps are very important while you begin your accounting, and selecting the right software is the ultimate key.
With this regard, you should thoroughly evaluate your accounting needs and prioritize features based on those needs. You should select such an accounting software that can offer the features that you require and provide you with the best accounting experience.