Keeping track of your company’s finances can be a challenge. Accounting software can help you simplify this process by tracking your money coming in and going out. Many programs offer features that save time on data entry. Accounting software can make tasks like invoicing customers, recording payments, and following up on overdue invoices faster and easier.

The features of accounting software can vary depending on the vendor. Some offer basic features for recording transactions, while others provide more advanced tools like automatic data transfer through bank feeds, reconciliation, and recurring invoicing.

What is accounting software?

Accounting software is a tool that helps you record your company’s financial activity and analyze its financial health. You can use it to record transactions, generate reports, manage customer and vendor contacts, create purchase orders, track inventory, send invoices, and monitor account balances.

“An accounting software package will help you organize your records and establish a systematic structure,” says Ken Stalcup, senior director with Houlihan Valuation Advisors. “This will put your company’s finances in a system that can report on financial performance and make tax time easier.”

Why use accounting software?

Accounting software can save your company time and prevent errors.

“The main benefit of using modern accounting software is efficiency,” said Fabien Dawidowicz, CFO of Spendesk. “Instead of manually entering data from spreadsheets, you can keep all your transaction information in one place. You can easily see what money has been spent or received and find this information whenever you need it.”

With bank feed features, you can connect the software to your business bank and credit card accounts to automatically update your transactions daily. Most accounting applications have dashboards that give you a real-time view of your most important financial metrics.

The software can create reports and financial statements, such as profit and loss statements and balance sheets, which are necessary for requesting funding from investors. You can also compare past and present transactions to analyze your business’s growth, sales trends, and other key metrics to make informed business decisions.

You can use accounting software to categorize expenses and schedule and pay bills. This will help you keep track of those transactions and manage your cash flow.

Accounting software automates many tedious and repetitive accounting tasks, which increases the accuracy of your data and keeps your bookkeeping efficient. If you use cloud accounting software, you can do your accounting anywhere with an internet connection.

Benefits of accounting software

Accounting software is more than just a necessary tool. It provides a variety of features that can help run your business more smoothly. Here are some of the main benefits:

• Maintain control of your finances: Accounting software helps you organize and store your financial data in one location, giving you a complete view of your business’s financial performance.

• Automate invoices: You can create recurring invoices, send follow-up reminders, and accept digital payments directly from invoices. You can also track unpaid invoices and offer discounts for early payments.

• Track expenses: Accounting software can help you prevent cash flow shortfalls by automating expense tracking. With the software, you can scan and record receipts, as well as track mileage and expenses incurred on behalf of clients.

• Reconcile bank statements: You can access your bank statements directly from your accounting software and automatically match and reconcile bank transactions.

• Stay compliant with the IRS: Many accounting software programs can automatically calculate sales tax and prepare tax forms for you.

• Reporting and analysis: Accounting software collects data through integrations with your POS, CRM, and other business applications. This data gives you deep insight into your business and allows you to easily analyze data and track performance.

• Manage inventory: You can track products sold, set reordering thresholds, and run reports on which items are selling well.

• Easy collaboration with your accountant: Your accountant can have access to the program for free, which saves them time gathering documents and information.

• Around-the-clock access: Most accounting software is cloud-based, so you can access it from anywhere with an internet connection.

Features of accounting software

Now that you know what accounting software is and why you should use it, here are some features to look for when choosing a system:

• Accounts receivable: Accounting software should be able to handle billing and track what customers owe you (accounts receivable, or A/R) and their payments. Here are some key A/R features to consider:
  
  • Invoice processing: The software should allow you to create and send invoices electronically.

• Automatic invoicing: Automate invoices to ensure revenue is never delayed.

• Payment processing: Many systems allow your customers to pay invoices online.

• Accounts payable (continued):
  
  • Purchase orders: Generate purchase orders to track your purchases and what you owe.

• Vendor credit memos: Track vendor credits to help keep costs down.

• Automatic payments: Schedule payments and automate your payment processes.

• Expense reimbursements and deductions: Manage employee expense reimbursements.

• Banking: Look for software that can link to your bank account for direct payments and real-time data import. Here are some banking features to consider:
  
  • Account reconciliation: Reconcile multiple bank accounts.

• Bank deposit prep: Ensure the software can handle basic electronic deposits.

• Check handling: Print and process checks, with features like check voiding and duplicate check notifications.

• Expense Tracking: Robust expense tracking features allow businesses to capture receipts, track mileage, and reimburse employees for business expenses promptly.

• Reporting and Analysis: Customizable reporting tools provide businesses with actionable insights into their financial performance, facilitating data-driven decision-making.

• Inventory management: An inventory management system can help you identify what you have in stock, what you need to reorder, and where you’re spending your purchasing budget.

Choosing the Right Software:

With so many options available, choosing the right accounting software can feel overwhelming. Here are some tips:

• Consider your business size and needs.
• Think about your budget.
• Read reviews and compare features.
• Take advantage of free trials.

By investing in accounting software, you’re investing in the financial health of your business. You’ll free up valuable time, gain valuable insights, and empower yourself to make informed decisions that drive growth and success.

Accounting software empowers businesses to take control of their finances. It centralizes financial data, eliminating manual data entry and streamlining processes. Repetitive tasks like recording transactions, reconciling accounts, managing payables and receivables, tracking income and expenses, and reporting can all be automated. This saves businesses time, reduces costs, boosts productivity, and improves the accuracy of financial reporting.

Ready to unlock the power of financial management with accounting software?  Request a free demo today!  Explore how GS Accounting can Streamline your business operations