Accounting software is a computer software used by accounting professionals to manage accounts and perform day to day accounting operations.
Accounting is an organized practice, work or process of communicating and recording financial data. A business organization use accounting software for various purposes including internal and external audits, required reports and financial analysis to meet legal or internal managerial requirements.
Accounting software ranges from simple and easy, single-entry programs for individual record-keeping to more urbane, double-entry systems that can process accounts receivable, accounts payable, payroll and inventory, among other functions.
Top 10 Accounting Software
- QuickBooks Online
- SAP Business One
- Sage Intacct
- Microsoft Dynamics GP
Key benefits of Accounting Software-
The major advantage of accounting software is that it saves a lot of time over manual bookkeeping. With a computerized accounting system, front end business documents and back end transaction recordings are accomplished simultaneously. For instance, one can create customer invoices, prepare bank deposits and write checks in the program, with the added benefit that the system records each transaction. The software also helps to manage all over the working of accountancy within few times.
As compared to the manual accounting system, the computerized accounting system enables monetary articulations for any time frame to be created with the snap of a catch. This allows a business head to continuously monitor an organization’s monetary execution and address any issues before they get to be risky.
Cash Flow Management-
With accounting software, it enables you to record receivables and payable in every system. This allows the system to estimate your cash flow position into the future. For instance, if you have submitted all your bills and customer invoices in the system with their due dates, the system provides a print report that will give clear picture if you will have enough money between what you have now and what you expect to be coming in to cover the bills that are due. It provides a detailed record of all bills and invoices. This future planning tool helps you avoid overdraft charges and late fees and fines.
If a company owner wants to select a single suite of digitized resources to boost results, accounting software should be his / her first choice. Such programs dig deep into organizations’ most inefficient, day-to-day operations, gather, arrange, and analyze their most valuable data and what is most important, allow more efficient use of their resources.
Another major benefit of accounting software is learning curve, especially if one hasn’t used it before. Generally small business owner face difficulties to spare time to learn how to use the system appropriately, which leads to errors and reconciliation issues. Proper training is crucial to get most out of your accounting system. It becomes easy to cope with errors in small businesses.
Features to be considered in best Accounting Software-
Analysis and Report-
Analysis and reporting are one of the crucial features the best accounting software must possess. Reports record maintenance is a key requirement of any business to analyze and report in the critical financial situation. Easy and quick access to the records can enable the major tasks and meetings within organizations. This analysis and report will help the management during key decision making and save their maximum time as well as the stress.
This is also an important feature a top accounting software should have. User-interface of any software is the core of attracting users. Generally, not every person has the sound technical knowledge and if a software interface is difficult to understand user might get more tangled. If the software isn’t user-friendly it will take more time from the accountant to understand its procedure and use the software.
Integration of billing and invoicing features with inventory management-
Generally, all accounting systems have different basic functions and features, and most of them offer basic billing, invoicing, and inventory management. But, if all of them are integrated in one system, then it will help to reduce a significant amount of time transferring or migrating data from one system to the other.
Secure sensitive data-
Financial information is crucial and sensitive data, and it should never go into the wrong hands. Keeping this in mind, the best accounting software should provide complete and solid security features. Go for user-based access features, as this is always a good security measure. With this feature on place, a best accounting software can only be accessed by an authorised person in your finance team with a permit. Moreover, their access is restricted only to what their tasks are. For instance, the person assigned to payroll management will only have access to data relevant to payroll needs.
A top accounting software is customizable according to the business need and requirements. Each business has its own measures and ways of handling modules. If a software is not customizable then it may create hurdles for the accountants and finance team to work according to the organization needs and requirements. The software must be convenient in customization of data and reports according to the client’s ease and requirements.
The Future of Accounting Software-
1. Artificial Intelligence Reduces Redundancy
Artificial Intelligence (AI) will never fully replace your accountant, but AI-based accounting software is already performing several tasks. One of the major achievements of AI is automatically matching transactions from connected bank accounts to invoices and expenses. This helps to reduce the amount of time needed for bank reconciliation. Additionally, with an AI-based system there is no need for more pressure over paper statements every month to make sure the transactions match your journal ledger. By permitting AI to handle redundant tasks, the margin of error is much lesser. Obviously, some tasks will always need oversight, but AI-based accounting systems will alert you whenever data needs a human touch.
2. Blockchain Will Make Accounting Simpler
Disruptive and driving technologies like Blockchain, which is at the core of cryptocurrencies like Bitcoin, are making waves because of its resistance to fraud and ability to record transactions without a middleman. For instance, businesses must use a third-party (bank or payment gateway)to accept money from a client. But with blockchain technology, transactions take place instantly and are digitally recorded without the use of a bank or payment gateway. In accounting, blockchain technology helps to automate the auditing process and reduce the frauds or almost impossible. But it is too early to see any extensive changes yet as the technology is still flourishing.
3. OCR Eliminates Manual Receipt Entry
With so many destructing and driving technological developments like AI and blockchain, it almost appears unfortunate to talk about a technology that has been in development since as early as 1914. The beginning of converting characters into telegraph code is now standard practice in the financial sector, where OCR (Optical Character Recognition) saves too much of processing time by means of machines to read handwritten characters and interpret them into electronic data.
Today, users can take pictures of receipts with their smartphones and upload them to mobile versions of their accounting software, which automatically generates expenses complete with vendor name and amounts. This significantly reduces data entry time and manual errors that come along with it.