Managing your business finances is a job that requires specialized tools, and small business accounting software is the perfect solution. With the right accounting software, you can streamline your financial operations, enabling you to focus on other core aspects of running your business.
However, the software market is filled with various offerings, so selecting the best one for your needs can be difficult. To make sure you’re making the right choice, you should consider a few stand-out features that can help you maximize productivity and get better business results. Read on!
What is accounting software?
Accounting software is designed to help businesses manage finances and various financial processes. With this tool, you can track expenses, generate invoices, and analyze financial performance. It’s a great way to automate tedious accounting tasks and take the stress out of managing your finances.
Using accounting software packages, you can create detailed reports on income, expenses, profits, and losses, as well as other financial analytics. It’s also possible to track inventory levels and customer payments.
Why use accounting software?
As a small business owner, you’re probably already overwhelmed with all the tasks involved in running a business. Accounting software can eliminate some of that stress by automating many tedious and time-consuming processes. Instead of copying and pasting from one spreadsheet to another and manually inputting data, you can automate these tasks using accounting software.
This makes it much easier to track your finances, analyze performance and make informed decisions about the future of your business. Plus, its user-friendly interface allows for easy navigation no matter what type of device you’re using.
Now that you are aware of what accounting software is and why to use it, let’s look at 10 stand-out features of small business accounting software.
Analysis and report
Any accounting software for small businesses must be able to generate accurate reports and give you a clear insight into your business performance. With good accounting software, you can easily track income, expenses, profits, and losses, as well as view historical trends. Many of these packages offer built-in reporting tools that allow you to customize your reports for better visibility of budgets and forecasts. Additionally, having a tool that allows you to create detailed reports based on your financial data provides you with the insights you need to create financial forecasts, set budgets, and stay ahead of the game.
Small business owners know the importance of keeping track of what they owe and what’s due. This feature allows you to monitor incoming invoices and pay bills on time, reducing the risk of late payment fees. It also enables you to keep track of payments owed and expenses incurred, helping you stay organized as your business grows. Here are some useful account payable features;
Purchase orders: one of the main tasks of accounting software is to manage purchase orders. This feature allows you to track incoming and outgoing goods and services accurately, ensuring you get the best value for your money. From generating purchase orders to tracking deliveries to reconciling invoices and payments, you’ll be able to do it all in one place.
Vendor credit memos: credit memos are valuable documents in any accounting software. They’re used to track discounts and credits from vendors, making it easy to track what you owe and what you’ve received in return.
Automatic payments: many account payable modules automate payments. With this feature, you can set up payment schedules and track your payments in real-time. This is a great way to ensure that bills are paid on time, preventing late fees and penalties.
This feature is extremely important for any business, as it helps you keep track of employee salaries and other wages. With payroll management, you can calculate employee payments bi-weekly or monthly, as well as manage bonuses, overtime hours, deductions, and more. The benefits of this feature include the following;
Variable wage schedule: this payroll feature allows you to set up different wage schedules for different types of employees. This way, you can ensure that every employee is paid the correct amount according to their job title and experience.
Direct deposit: an excellent accounting software that has the ability to make direct deposits into employee accounts. This feature makes it easier for employees to access their wages and helps you manage payroll much more efficiently.
Automatic tax collection: providing a sophisticated and accurate solution to tax collection, this feature allows you to calculate and collect payroll taxes automatically. Before making a purchase, find out if the software you are considering has up-to-date tax modules that comply with your local regulations.
Bookkeeping is one of the most tedious tasks for any small business owner, but also one of the most important. With accounting software that offers bookkeeping capabilities, you can easily manage your financial information and track your income and expenses in real-time. Tasks such as updating customer records, and tracking accounts receivables and payables are made easy with this feature. Other benefits include;
Financial reporting: whether you are preparing for taxes or just want to get an overview of the business’s performance, having access to financial reports is essential. Good accounting software will provide customizable financial statements showing your income and expenses clearly.
Budgeting: with the right records, you can easily create a budget for your business. This feature helps you track income and expenses, giving you an idea of what’s coming in and going out each month. It also helps you plan ahead by setting goals and outlining cash flow projections. You may need to also try an income tax calculator for maximum tracking.
Billing and invoicing processes
As your business grows, the billing and invoicing process becomes more complex. Good accounting software should have features that automate the process, making it easier to manage customer databases, track payments, create invoices, and generate reports. Excellent accounting software such as FreshBooks, QuickBooks, Zoho, and Invoicely enables you to create professional-looking invoices with minimal effort. Some of the best billing features include;
Recurring billing: this feature allows you to set up recurring invoices for customers who purchase regular services or products from you. This way, you don’t have to manually send an invoice every month – instead, the software will do it automatically.
Automated payment reminders: sending customers payment reminders is a great way to ensure they pay on time. Accounting software should have the ability to send automated emails or text messages that remind customers of their due payments.
This is a very useful feature for businesses with more than one bank account. In addition to helping you manage multiple bank accounts, it also provides a way to ensure all the records match up. This feature helps to ensure that the data is correct and accurate and allows you to reconcile accounts quickly and easily. Ensure that your tool has a general ledger and a reconciliation report feature. The benefits you can get from this feature include;
Bank deposit prep: accounting software with a reconciliation feature has the ability to prepare bank deposits quickly and efficiently. Instead of manually inputting information for each deposit, you can enter it in one place and have it automatically updated across other accounts.
Error prevention: mistakes are inevitable, but with reconciliation, you can reduce the chances of errors. This feature helps to ensure that all records match up and gives you an overview of your finances.
Check handling: if your business makes payments using checks, reconciliation can help you keep track of them. The software records each check that is written and indicates whether it has been deposited or not.
In general, accounting software should be easy to use, even for people with limited technical skills. The best software in the market has a user-friendly interface and provides access to help files and tutorials that you can refer to when necessary. Look for features like drag-and-drop capabilities, customizable reports, and templates, scorm export, as well as automation options that make it easier for you to manage your finances.
Furthermore, your choice should be functional and allow you to access your data from multiple devices. This makes it easier for you to manage tasks on the go and work with your team in real time.
This feature is a great selling point as it allows you to integrate your accounting software with other tools and programs. This gives you the ability to connect data from multiple applications, making it easier for you to get an overview of the business’s performance. For example, popular integrations include customer relationship management (CRM) software, point of sale (POS) systems, and e-commerce platforms. Also, choose software that can integrate with various payment options, such as PayPal, Stripe, and Apple Pay.
Automatic updates and scalability
Technology changes with time, so it’s important to choose software that can keep up with the changes. Look for a tool that automatically updates itself when new features become available, as this will ensure that you’re always up-to-date. Accounting software should have the ability to expand when needed and provide enough scalability to meet growing needs.
When it comes to scalability, you don’t have to worry about storage constraints or data limits. The best software can handle large volumes of transactions and provide a valuable solution for businesses of any size.
Customer relationship management is another essential feature that you should consider. Good accounting software will have a dedicated customer service team or provide access to helpful resources, such as forums and FAQs. Look for companies that offer regular updates on system changes and feature releases. This will keep your business up-to-date with the latest developments in the industry. Some of the customer service features include;
- 24/7 Customer support: the best software will offer customer support anytime. This means that you can contact experts whenever you need help with the system or have any questions about how to use it.
- Regular updates: this will keep customers informed about new features and changes to the system and any industry news.
- Forums: customer forums are a great way to get answers to your questions. They also give customers the opportunity to provide feedback and share ideas on how the software can be improved.
Apart from the aforementioned features of small business accounting software, it is essential to note a few advanced features that may be beneficial. They include the following;
Shipping: For an online store, the ability to manage orders and shipments can be a great asset. Look for software that is integrated with carriers to save you time and money while streamlining the shipping process. Here, vital features to consider are shipment tracking, labels printing, drop shipment, and automated email notifications.
Inventory Management: This advanced feature will prove to be valuable for businesses that stock physical goods. It helps you keep track of inventory, and determine when items need to be reordered. As well as generate reports on sales performance over a period of time. Keep an eye on capabilities such as product categorization, assembly management, and expiration date tracking.
Customization: Customization is an advanced feature that can be used to tailor the software according to your business needs. You can customize the look and feel of the tool, add features and functionalities, and create custom dashboards. This will help you streamline repetitive processes and save time for more critical tasks. For a small business, having a tool that can customize according to your flow and preferences is convenient and a great way to improve efficiency. Ensure to check software customization capabilities before investing in it.
As you can see, accounting software offers plenty of features that can benefit any business. The right software will enable you to keep track of your finances, manage invoices and payments, and stay ahead of tax filing deadlines. If you are a small business owner looking for the perfect accounting software for your business, consider the features discussed in this article. With the right software, you can easily manage your finances and make informed decisions based on accurate and up-to-date financial data. Choose an excellent software today and enjoy the success that comes with it.