Accounting is an essential aspect of any type of business. Small and large businesses need to keep a succinct and detailed record of their assets, capital, liabilities, income, and all costs. In short, accounting takes care of all that is valuable for the enterprise, such as assets like computers, vehicles as well as software systems, patents, and human capital too.
Today’s accounting software makes the accounting process extremely efficient and faster for small businesses. Automated accounting systems keep a detailed record and act as an ideal accounting information system.
Need for Accounting Software
Accounting is necessary for especially small businesses to keep a record of changes in the business’ assets, capital, liabilities, income, and different expenses. Thanks to advances in technology, accounting today is no longer a manual process. Automated accounting systems have improved the accounting process significantly and made it faster and more efficient, thus easing the work of accountants and bookkeepers.
Small businesses find online accounting systems incredibly beneficial for maintaining an accurate and updated account of their expenses and income, as well as compliance with the complicated local and national tax systems.
As accounting is a process that is done frequently and regularly, the software has become extremely essential for small businesses. This may explain why so many accounting businesses are currently being sold, as they are in such high demand at this moment in time. If you are reading this as the owner of an accountancy firm, you can learn how to sell an accounting practice here. Using this aforementioned software, a small business owner has an efficient way to keep records of their debts, expenses, and income. According to the recorded financial data, special features of an automated accounting system helps to produce customized data processing, and generate the necessary reports.
Automated accounting systems are cloud-based and store all data in a centralized database at an offshore location. This allows users to access their accounting details and data from anywhere and at any time. It also generates several different types of financial reports which are required by businesses for different purposes. The financial information can be sorted according to priority and preference so that the user can access the relevant information swiftly. There are also more specialized software options out there for businesses that deal with specific areas of accounting. For example. if your business does lease accounting, and you need to ensure that your documents comply with the relevant industry standards, you could use lease management software to help you to do this, plus other processes that are specific to lease accounting.
Features of Accounting Software
Automated accounting systems work as accounting information software and keep a comprehensive record of different kinds of transactions that are required by small businesses in a well-categorized system. It classified the financial information and data of businesses into accounts receivable, accounts payable, payroll, general ledger, and trial balance.
Reliable accounting systems, like Giddh, allow users to access it anywhere and at any time with their desktops or mobiles.
Some of the major features of accounting systems include:
Workflow automation – This helps to set up reminders for payments, auto-debits, and other regular tasks, which results in saving time.
Sales reports – The system is designed to supervise and manage customer balances. It reminds them of pending payments and notifies them about collectible payments.
Online payments – It helps to avoid wasting time by allowing customers to make online payments from any location.
Manual journals – It also corrects errors that can often develop when transferring balances to other accounts and also records every small transaction.
Purchase reports – The accounting system keeps track of purchases, converts purchase orders to bills, and generates reports according to your specifications.
Trial balance – This feature helps to generate financial statements, such as income/cash flow statements and balance sheets, etc. and provides balance remaining in all accounts using the Chart of Accounts.
Chart of Accounts – This is an easy way to post entries for daily accounting activities and round up vital financial data.
Balance sheet – This feature gives a catalog of assets and equities held by the company. It is useful for managing reports and making estimates of the financial condition of the enterprise.
Accounts receivable – This feature identifies deposits made to the bank accounts and uploads the information of deposits automatically to the customer account.
Account payable – This allows users to track expenses and create terms of payments for invoices. It prints computer-generated checks for easy disbursement.
Master files – This is a collection of essential customer information, such as name, phone number and address, etc.
Point of Sale (POS – This feature is useful to record transactions between vendors and customers.
Order management – It helps to manage purchases and orders from vendors and customers.
Aging reports – These reports are useful for updating reports that identify overdue payments from customers and vendors.
Account reconciliation – This feature helps to locate untracked transactions or errors in data entry and helps to synchronize the business’ bookkeeping with the bank’s account records.
Cost prediction – These reports provide comprehensive statistical analysis and forecasts that help to make feasible and informed decisions based on accurate data.
These and other such reasons are the main factors that make accounting software a must-have for small businesses today.