Accounting Software - Different Types and Which One You Should Use

Monday, February 26, 2018

Accounting Software - Different Types and Which One You Should Use

The right software packages benefit your business in numerous ways. Everything from word processing to customer relationship software helps build your business. One of your most important decisions relates to financial management. The right accounting software helps you scale your business and grows with you.

Accounting or financial software provide a dedicated system for managing business financial information. Learning how to conduct virtual bookkeeping can save your company both time and money in the long run. Many companies offer traditional software you purchase and install on a computer or tablet.

Benefits of Accounting Software

A quality financial software package helps a company cut costs, forecast expenses and increase productivity. It lets accountants automate some actions, record transactions, monitor metrics, analyze expenses and quickly generate reports. The right accounting software offers eight key benefits. Good software simplifies data entry and management, reduces costs by letting you automate some tasks, provides financial transaction transparency, and provides accurate trend and pattern analysis and forecasting. It also enhances productivity by collecting and organizing data to enable quick reporting and analysis, makes tax preparation easier by automating tax document generation, improves customer relationships by improving billing and invoicing, enhances security of financial data.

Accounting Software Types 

Five categories of accounting software exist. If you choose to digitize all of your financial activity, you'll need a comprehensive accounting software. If you choose to ease into it with piecemeal software, choose from these four categories to start:

  • billing and invoicing, 
  • payroll management, 
  • enterprise level resource planning, 
  • time and expense management.

Billing and Invoicing

A billing and invoicing software enables you to cut checks, generate timely invoices and bill accurately. Examples of this software include Envoice, FreshBooks and the Zoho products Books and Invoice.

Payroll Management

A payroll management software or payables and account receivables software helps you calculate position salaries, figure deductions and automate salary direct deposits. Examples of this software include AccountEdge, Xero and Zenefits.

Resource Planning 

Resource planning software provides the ability to plan products, purchase materials, manage inventory and distribution and conduct planning in the areas of accounting, finance, HR and marketing. Examples of this software include Brightpearl, Intacct and Odoo.

Accounting Software

Time and Expense Management

Time & expense management lets the user automate billing cycles, approve expenses and generate graphical time and resource reports. Examples of this software include Expensify, FreshBooks and Zoho Expense.
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What to Look For in an Accounting Software

Regardless of the type of application with which you choose to begin, the best software for you provides flexibility and scalability. The perfect application for your next door neighbors firm may differ radically from the best one for yours. Choose a software that lets you customize it, is easy to use, provides strong security, integrates with existing apps or software, provides mobile access, falls within your budget and provides quality customer service.

Software should allow you to set up your own business rules. It should also grow with you. If you start out purchasing an enterprise or corporate software as a sole proprietor, you'll pay for features you don't need... yet. If you choose a SaaS solution, you can choose an appropriate subscription level, then move up a subscription level when your business grows.

Keeping It Simple

Ideally, your accounting application will make things so simple that every employee could do their own data entry if it came down to it. Look for a well-organized user interface that provides information at a glance.

The same app should also provide the security that ensures only employees who should have access, do. It also should ensure no one outside the company can access your data. The right software integrates seamlessly with your existing applications. Look for a system that integrates with your online systems via open API. The software should also provide for mobile access via a website and apps. Most vendors now offer Android and iOS apps. This lets employees enter information on the go and the employer approve information on the go.

Both free and expensive software exist. A free software won't help your business if it doesn't do what you need. Most vendors offer a free trial. Try each application to see what works best for your company. The testing time you invest can save you money. Along with free trials, most vendors have quality customer support. Not all provide it though, so check this carefully. A good on-boarding program can make the difference between employee ease of use or frustration.

Choosing the right accounting package gives you multiple benefits that can help you grow your business. Your choice takes time and research, but provides you with the automation to free some of your time and the data analysis to make more informed business decisions.

By  Mark Palmer Embed

Author Bio - Mark Palmer is a small business expert and has a passion for helping entrepreneurs make the most out of their company. As a freelance writer, Mark hopes to influence others so they can have a positive business experience.


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