Quick Guide on Accounting Software: Types, Must-Have Features and more!

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October 25, 2018

accounting tips

Entrepreneurs, you can find them in every sector or industry. Where there’s an innovative cloud-based solution, a unique hairdressing services in the city, or a freshest farm product delivery service, there’s an entrepreneur. What unites them all, is the need to keep an accounting. Frankly, few people enjoy this rather monotonous and not very creative activity. Most entrepreneurs consider bookkeeping as a «necessary evil» and either entrust this activity to professionals or spend valuable time trying to figure out all the intricacies of bookkeeping themselves.

Business is not always a wealth of information analytics. At least not from the very beginning. At the beginning of its activities, the only valuable information resource of the company is data on the state of its property, liabilities and capital. That is accounting data. In addition, the first step to global automation of business processes may be the choice of an accounting program.

Before you choose one or another program for accounting, you need to analyze the work of your company. It is on what documents you use, what system of taxation and reporting applies, and the choice of program will be based.

What features do accounting software offer?

The functionality of programs for accounting vary greatly, depending on the selected program, but you can usually expect the possibility to create an invoice, invoice seal, control and payment. Additionally, you might want to explore:

  • Recognition of income and expenditure.
  • Balances control.
  • Listing (providing services, performed services, transfer and acceptance, etc).
  • Pay assessment.
  • Report generation for tax agency.
  • Pension fund and social insurance fund.
  • Online reporting.

Besides that, most programs that work over the Internet securely encrypt and protect transmitted data, so you do not need to worry about security. Some programs also provide the ability to collaborate with an accountant, tax calendar and scheduling, and even embedded social networks for sharing business contacts.

Classification of accounting software

Programs for accounting can be conditionally classified by the following features:

  • Free and paid.
  • For small, medium and large business.
  • With the ability to integrate external components (online bank, access for an accountant, etc) and without it. You might want to discover the amazing possibilites integration offers.
  • Working offline, online and based on cloud technologies.

It is surely one of the possible classifications only.

Be ready!

Choosing a program for accounting, you need to be clear-eyed about your needs and capabilities and, at a minimum, answer the following questions for yourself:

  1. Can you afford the paid version or should you stop at the free one? If you are just starting your business, you probably have every penny in your account and it may make sense to start with a free or budget program and purchase a more expensive one when the business starts to generate a steady income.
  2. What does your company do? If you provide, for example, consulting services, it is likely that you will not need an inventory accounting module.
  3. What are the legal form and tax regime used by your company? Therefore, individual entrepreneurs do not need the VAT settlement function, if they do not buy goods or services abroad and do not conduct a foreign economic activity.
  4. How standard are your operations? Most of the budget and free programs are designed for more or less normal business operations. Consequently, if necessary, to carry out a non-standard operation, the user of such programs may have difficulties. What if there are many such non-standard operations?
  5. Do you keep records yourself or use the services of an accountant? In the former case, you hardly need the function of remote access for an accountant, while in the latter case, you should think about it.

Benefits of a Cloud Accounting Software

  • Saving of time and money: No need to build it yourself or hire an entire crew to develop your accounting solution.
  • Flexibility: Usually, cloud-based accounting solutions can adjust to the company size. They often offer features you can add to your configuration.
  • Try it first: All of these tools have free-trials available, so you can actually test out several tools until you find one you like.
  • Access from any decive: With cloud-based tools you have access to your accountancy information wherever you are (if you have internet, of course)

So what are you waiting for? Go find your ideal accounting software!

About Melisa Marzett

Melisa Marzett is a blogger who works for onlineclassmentor.com at the moment. She likes travelling and working as a freelancer makes it to where she is able to travel twenty-four-hour.