Accounting Software 6 Features To Look For
Accounting Software: 6 Features To Look For
Creating businesses is never easy, let alone managing your company’s finances. Even for seasoned marketers and business owners, this specific task can be extremely challenging and confusing, more so for first-timers. If you’re having a hard time handling your company’s financial resources and expenditures, worry not, as there are plenty of available alternatives you can consider, including using accounting software and solutions.
Numerous programs and accounting software prove to be beneficial in helping business owners track cash flows, monitor finances, and plan future expenses. These solutions may also come with templates that make for efficient timesaving options, as they help minimize the time spent on entering data into a system manually.
If you’re considering accounting software, you must first know the best features to look for. To gain more ideas, you can check out this article.
What Is An Accounting Software?
Among the wide range of alternatives one can consider to aid in their accounting processes, accounting software proves to be the most efficient one. Whether it’s to assess the company’s financial condition or monitor finances, these technological advances could benefit one’s business in many ways. They could help record transactions, handle customer and producer contracts, generate financial reports, track stock levels, and audit account balances.
Accounting software also has varying features that make them unique from each other. These features make recording payments, invoicing customers, and following up on past-due receivables much easier.
Here’s a list of some important facts you need to know about accounting software:
One of the primary roles of accounting software is to help business owners monitor their finances easily. Managing a company’s financial accounts and finances can be stressful, especially for people who have lesser knowledge about it. Since these financial aspects serve as the bloodline of the business, it’s crucial to promote transparency and cohesion with financial reports.
Accounting software could help consolidate valuable financial reports, expenses, and investments made by the company and organize financial data in one location and secure the files better.
They could optimize invoicing processes and make tracking unpaid invoices. This mainly helps the business grow, as they could make the collection of payments smooth. Particularly, business owners could create recurring invoices, send follow-ups, and accept digital payments.
In terms of overseeing the company expenses, business owners could efficiently track business costs, avoid a cashflow shortage, and automate expense tracking through accounting software. By using them, one can effectively scan and compile receipts, supervise mileage, and track financial conditions.
Ideal Features Of An Accounting Software
Upon knowing what accounting software is, the next thing you need to know is which features to look for when selecting a specific system. This is essential in making sure you’ll choose one that effectively suits your company’s needs and boost its financial aspects.
Since different types of accounting software have distinct characteristics that make them stand out, ensure that they consider the accuracy of your company’s finances and have incredible account receivables, accounts payable, reporting, and banking features. Your prospective system should offer project management, inventory management, payroll tools, and time-tracking solutions.
Listed below are some of the best features of accounting software to look for:
1.Accounts Receivable
One of the most important aspects to consider when choosing accounting software is its capacity to manage billings and payments. Particularly, reliable accounting software should effectively keep track of account receivable (A/R), manage billings, and record payments.
Here are some of the key features of an A/R to look for:
Detailed Invoice Processing
Generally, accounting software must be efficient in handling invoicing process and managing the details of the payment transactions. Particularly, your chosen system must record all the valuable data about the payment, including the payors’ details, the exact amount, and the date to expect the payment. Your accounting software should document basic customer data, such as names, addresses, standard terms, and account numbers. Through this, you can scan and print accurate invoices and incorporate the company’s standard pricing for all products and services.
Advanced Collecting Processes
With this feature, accounting software could help business owners to ensure collecting revenues in due time and prevent late payments from customers. Aside from that, the software could also promote proper tracking of payments due, optimize the process of sending out financial statements and late reminders to customers, and prompt them to pay bills.
Easier Payment Processing
Gone are the days where customers have to manually pay for their invoices. With the advent of various technological innovations, they can now settle invoices online by clicking certain buttons on the electronic note you sent them. In such aspects, it’s important to look for accounting software that could help further automate processing checks and making bank deposits. Aside from promoting easier transactions, this feature could also make for greater security for payments and quicker disbursement processing.
2.Accounts Payable
Apart from the accounts receivable, another essential aspect you must consider is the accounts payable (A/P). This includes the outflow of cash and payment for third-party transactions.
Some of the most ideal features accounts payable should have:
Functional Handling of Purchase Orders
One of the primary tasks of an accounting application is to handle the company’s purchases and expenses. It’s also responsible for managing outflows of cash, purchasing orders, and making payments. Considering this aspect, your account payable system should be able to maintain the smooth processing of purchase orders and promote functional transactions between marketers and third-party companies.
Faster Tracking of Vendor Credit Memos
With many processes to supervise and complicated methods to accomplish, it’s easy for business owners to lose track of their vendor credit memos. While this is a common scenario in the business industry, you can effectively prevent such instances by selecting accounting software that could help monitor those statements handed out by credit vendors.
In particular, efficient accounting software should effectively keep track of rewards, returns, and credit announcements sent out by credit vendors. Since these memos are considered as valuable as cash, a dependable accounting system should be able to track them to keep costs down.
Automated Payment Processes
Another notable characteristic of accounting software you must consider is its capacity to automate the scheduling of bank payments and direct deposits. It should also be able to optimize the printing of checks and ease payment processes to ensure you don’t skip on the important payments.
3.Efficient Payroll Tools
If you want to improve your company’s payroll processing, you might want to opt for accounting software that offers sophisticated payroll tools. Particularly, you need an accounting system that allows companies to better calculate employees’ working hours and process payroll wages. It’s also important to search for a system that could adeptly manage wages to payroll taxes and make 401(k) deductions.
When considering some of the best payroll features, you must choose accounting software that could properly handle direct deposits to other accounts. Since most employees prefer to have their paychecks transferred directly to their bank accounts, your accounting software should make these transfers hassle-free and easier. A good accounting system can also make the scheduling of direct deposit payments smoother and uncomplicated.
4.Automatic Tax Calculations
Handling basic deductions, consolidating tax tables, and monitoring expenditures are only some of the most complicated and challenging tasks in accounting that most business owners often have a hard time accomplishing. While there are now numerous technological advances that could help ease those processes, it’s still best to look for a tool that could help you understand the intricate processes of paying taxes and calculating deductions.
You need to find accounting software that reinforces new-hire reporting, tracks expenses, and manages annual financial reports. For starters, you must know if accounting software records annual reports and returns, including W-2, W-3, Form 940, and 1099. Does it optimize the processes of stating tax returns for unemployment insurance and taxes? When choosing software, these questions are some of the most important ones you must consider first.
Lastly, you need accounting software that could handle tax deposits, compile federal tax reports like Form 941, and manage workers’ compensations insurance calculations and payments.
5.Reimbursements And Deductions
For business owners, it could be taxing to manage tax-deductible expenses of employees while reviewing all the other expenditures that come with them. In such aspects, it’s best to look for accounting software that provides easier processing of these tasks, handles travel and entertainment expenses, and accommodates reimbursements. Also, your accounting system must ensure that payments are done within the given tax deadlines and company regulations.
6.General Ledger
Aside from the aforementioned characteristics, other notable features of an accounting system that you must look for include general ledgers, charts of accounts, tax management, invoicing, financial reporting, payment records, and account reconciliation. These are considered some of the basic accounting features that business owners must consider when selecting software.
In particular, an accounting system that can be used as a general ledger could efficiently help in assisting the administration of financial rules, including state legislation and online sales tax. Apart from that, this system must also address all the transactions of the company, which include vital information about financial transactions and statements.
While this is similar to the traditional process of financial bookkeeping, using this feature could make managing finances and expenses hassle-free, as well as make the organizing of financial data and reports easier. Lastly, your next accounting software must effectively handle all financial statements, balances, bank statements, tax calculations, and cash flows.
Bottom Line
Managing your company’s finances and expenses isn’t an easy feat to accomplish, more so if you have lesser knowledge about how to do it properly. Fortunately, there are plenty of available options you can consider to effectively carry out this task, including using accounting software and solutions.
With their advanced features and incredible uses, there’s no denying the number of benefits you can gain from these technological innovations, especially in handling your company’s accounting processes. You may also consider the above-mentioned features when choosing a specific software for a sound decision.