What Are the Features of Accounting Software?
Features of accounting software are varied but essential to consider when deciding what is right for you. Typically, accounting software is paid for monthly recurring instead of an upfront license fee (software as a service). The features vary by vendor, but all modern systems include essential functions like invoicing and payment reminders. Many also enable customers to make online payments, reducing staff admin issues and speeding up payment collection. They can also generate customisable reports with a spare interface that gives you a clear picture of your financial situation.
|Top UK Accounting Software
|Sage 50 Cloud
|The Smallest Businesses
|Novice Microbusinesses with 0 Employees
|Sole Proprietors/Small Businesses
|Most Small Businesses
What Are the Main Features of Accounting Software?
Here are some standard features you can find in accounting software:
- General Ledger: A central repository that records and organises all financial transactions into different accounts.
- Accounts Payable: You can manage and track money owed to suppliers and vendors, including recording invoices, tracking payments, and managing expenses.
- Accounts Receivable: Helps you track and manage customer invoices, monitor payments, and handle outstanding balances.
- Bank Reconciliation: Streamlines matching your recorded transactions with bank statements to ensure accuracy and identify any discrepancies.
- Financial Reporting: Generates various financial reports such as balance sheets, income statements, cash flow statements, and profit and loss statements, providing insights into your business’s financial health.
- Invoicing and Billing: This enables you to create and send professional invoices to customers, track payment statuses, and manage accounts receivable.
- Expense Tracking: You can record and categorize business expenses, track spending, and generate expense reports.
- Tax Management: Assists with tax-related tasks, such as calculating taxes owed, generating tax reports, and ensuring compliance with tax regulations.
- Budgeting and Forecasting: Helps you create and manage budgets, set financial goals, and forecast future financial performance based on historical data.
- Payroll Management: This enables you to handle employee wages, deductions, and tax withholdings and generate payslips.
- Inventory Management: Tracks and manages inventory levels, stock movements, and cost of goods sold.
- Multi-currency Support: You can manage transactions and accounts in different currencies for businesses operating internationally.
- Integration: Accounting software often integrates with other business tools, such as payment processors, e-commerce platforms, CRM systems, and payroll software to streamline data flow and avoid duplicate entries.
- Security and Data Backup: Ensures the security of your financial data through features like user access controls, data encryption, and regular backups.
Remember that the specific features offered may vary depending on the accounting software provider and your chosen pricing tier. Exploring different options and comparing features is advisable to find the software that best meets your business’s accounting needs.
Features of Accounting Software: Accounts Receivable
Accounts receivable are a category on the balance sheet itemising the unpaid amounts your company owes from customers. These funds are considered revenue and current assets since they will be paid into the business shortly. Accounting software allows you to track your invoices and payments and run reports that help you analyse sales trends and manage cash flow. It also automates processes such as invoicing, billing and online payment.
This helps reduce manual errors and improves efficiency. It is also intelligent, allowing it to track payment deadlines and send reminders. This feature also reduces the time spent tracking down payments and can be integrated with customer relationship management systems to improve workflows. Look for an accounting solution that can connect to other apps like your bank or credit card processor and auto-reconcile reports to streamline the process.
Several solutions offer this feature. Look for shipping label printing options and the ability to estimate shipping costs from your products’ weight and travel distance.
Features of Accounting Software: Accounts Payable
Accounting software records and manages the day-to-day financial transactions of a company, including cash management, accounts payable, payroll, sub-ledger accounting, and reporting. This information feeds the general ledger in real-time, giving CFOs and treasurers immediate access to accurate financial data. The best accounting programs also help companies avoid costly errors by automating their payments and ensuring they pay the right people at the right time.
This reduces paperwork, speeds up payment approvals, and helps businesses comply with HMRC tax rules. Small business owners, freelancers, and contractors need an accounting system that allows them to send invoices quickly and track payments efficiently. They should also look for a program that supports multiple payment methods, such as direct deposit and credit card processing.
Integrated fraud detection features can help protect against bad debt by analysing various data points and alerting users to suspicious activity. This helps minimise collections expenses and improve customer retention.
Features of Accounting Software: General Ledger
A general ledger is the foundation upon which financial statements like income statements, cash flow statements, and balance sheets are built. It documents all of your accounting transactions and compiles a trial balance to show that total debits equal total credits. A double-entry system ensures that each item listed under the debit column must be reflected in the credit column to meet the basic accounting equation of money in equals money out.
It also keeps track of your accounting data in a format that is quickly reviewed and used for reporting. With the right accounting software, you can automatically document journal entries and reconcile bank statements to ensure they match your financial records. This saves you time and effort and makes your data more reliable. It also allows you to generate and access reports in real-time to correct any issues immediately. You also have the option to choose a chart of accounts that is flexible and customisable to suit your needs.
Features of Accounting Software: Payroll
A reliable accounting system has a robust payroll management module to process employee payments, track deductions and expenses, and keep up with active legal and tax commitments. It may also feature fixed asset management tools for tracking and calculating the depreciation of your business assets. The accounts payable functions of an accounting program help you stay on top of what you owe to vendors and suppliers so that you can pay your bills on time without incurring late fees or interest.
You can use these systems to automate the payment process. Most offer integrations with payment gateways that enable you to collect online payments for a faster and more convenient experience. Bank reconciliation is another feature that helps you reconcile your financial statements with your bank account balances for a smoother bookkeeping experience. You can set up banking feeds to automatically fetch and import bank transactions into your accounting software, then match and categorise them based on custom criteria and rules.
Features of Accounting Software – Other Useful links about Accounting Services:
What is the Best Free Payroll Service?
What is HMRC Payroll?
What Qualifications Do You Need For A Job In Payroll?
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