Accounting is not for everybody. But if you're a small business owner, one way or another, you have to find a way to face it to keep your business running smoothly. Fortunately, technology brings a huge improvement in accounting.
Accounting software solutions are becoming popular among business owners. They are not only exclusive to medium-sized businesses and large enterprises. There are also suitable accounting software for small businesses.
This blog post will discuss some important questions to ask yourself when looking for the best accounting software for your business.
Will business accounting software solve my accounting dilemma?
Choose a small business accounting software with careful consideration. Though accounting software all have basic accounting features, some have more to offer. Before you find the right accounting software for your company, it's likely that you'll try many other programs.
However, keep in mind that changing software often will require exporting huge amounts of data which can be time-consuming. So, to minimize this, your first question should be what problems your accounting software can solve.
If you spend too much time creating invoices, does your accounting software have invoicing features to speed up the process? If you have employees, the time tracking feature will help you monitor them properly to give them the right compensation.
List down the specific troubles your business is having to help look for the features you need in accounting software.
What are the features I need to prioritize?
Small business accounting software have different features. So make sure to maximize the features that come with the software when you buy it. But, of course, it's also a waste of money if you won’t use the advanced features of your accounting software.
Here are some accounting software features that may apply to your small business.
Invoicing software
Invoicing is an important feature of accounting software. Whether selling products or offering services, sending invoices is crucial to keep track of your accounts receivable. This will enable your clients to see their bills and also help you track late payments.
Furthermore, invoicing tools make invoicing automated. These features also include preloaded templates. This will enable users to duplicate and automatically send recurring invoices.
Bank accounts and credit card reconciliation
Integrating your business bank accounts integration is one big benefit to accounting software. This feature will give you real-time updates on all your bank transactions, credit card payments, and cash that goes through your banks.
With this feature, you can have real-time income and expense tracking. Some accounting software even lets you pay your dues directly from the software. Furthermore, check if your accounting software has multi-currency support. This add-on is especially useful if your products are sold worldwide.
Accounts payable
Of course, businesses also have to pay bills. Whether it's for suppliers, raw materials, advertising costs, or rent, it's the owner's responsibility to account for the business's payables. You can input your accounts payable in your software, and the system will automatically notify you if you have upcoming dues.
Moreover, the system can show a summary of your accounts payable. From there, you can identify where your resources mainly go and if there are possible solutions to cut them down. This feature will help you manage your budget effectively.
Inventory management feature
An inventory management feature is a must for small business accounting software when you have a product-based industry. Inventory management effectively gives you an overview of your stocks and supplies. It can give comprehensive data on the stocks that easily run out and those that have a slower turnover.
This will help determine which products you should invest in more. Furthermore, other accounting software have multi-warehouse options. This feature allows you to centralize your inventory management to control your inventory in multiple locations through a single accounting software.
Payroll features
The best small business accounting software includes a payroll feature. Obviously, very small businesses are usually run by one person. But as a business expands, it will need employees. As a business owner, it's your responsibility to handle their payroll.
The payroll features will allow you to manage your employees’ payroll conveniently and error-free. The system can automatically send the payment on the schedule you set. It can also automatically calculate the correct amount your employee will receive. Furthermore, the payroll feature can process necessary deductions such as payroll taxes and other government contributions.
Financial reporting
To understand how their business is doing, small business owners need financial reports. Reliable business accounting software should be able to produce financial reports instantly. Accounting is the language of business, and these reports will help you better understand the areas that need improvement.
Some financial reports crucial to small businesses are income statements, balance sheets, monthly, quarterly, and annual reports, and cash flow statements. These reports will help you strategize how to distribute and allocate your funds more effectively.
Bookkeeping software
Some accounting software also include bookkeeping software for small businesses. Knowing where your money is going is crucial. Bookkeeping software keeps you in the loop on where all your resources go. Furthermore, this feature is a more secure way of keeping your books instead of manually writing them down in ledgers.
With a bookkeeping feature, you can easily tell if you are making a profit or not. Some bookkeeping features are also automated. For example, you can simply snap a picture of receipts and transactions, and the system will automatically record it.
Why Should You Use an Online Accounting Software?
Most accounting software is installed or downloaded on personal computers. However, because of its efficiency, online accounting services are gaining more popularity among business owners. Here are some features of online accounting solutions worth considering.
Easily accessible
One of the top features of online accounting services or cloud-based software is its easy access. Unlike traditional accounting software that requires a program, you can access online accounting software through a browser. You don't need to install any program on your computer.
You simply need to put in your credentials, and you can use the accounting software anywhere and on any device. This way, you don't need to scramble and find a computer when you need to see data or perform accounting tasks.
Top-notch data security
Security is one of the top priorities when choosing a small business accounting software. One of the safest solutions for accounting software is a cloud-based solution. Since it does not store files on your computers, there is a lesser chance that unauthorized persons will access your accounting data.
Furthermore, cloud-based software have bank-level security. Only the people who have the credentials can access the data. Cloud software also does regular backups, so you can worry less about your data getting lost.
Unlimited users
Growing businesses will need more hands on deck to run smoothly. Reliable accounting software can help manage your workflow. Some cloud-based accounting software allows access for unlimited users, so you can have an accounting team that can work simultaneously. It also makes collaboration easier.
How responsive is the customer service?
Looking for an accounting solution with responsive customer service is essential, especially when facing technical issues. It's important that you can contact technical support and receive feedback to resolve the issue.
Does the accounting software fit your budget?
It's normal for small businesses to allocate their resources to immediate business needs. Therefore, getting accounting software for small businesses is oftentimes not a priority. Even if you do set a budget aside, keep in mind that accounting software may vary in price depending on its advanced features.
Only pay the price of the features you will use. That's why it's crucial to know the inclusions of each software. There are also free accounting software you can use. All of your accounting needs can be met by even their most basic features. Utilize free trials to test out several programs and get the best accounting software for your small business specifically.
Is accounting software for small businesses enough?
No one can deny the convenience that accounting software brings. It has inventory tracking, income and expense tracking, bookkeeping, payroll, time tracking, bank account reconciliation, and many more features. In a single software, you can manage the tasks of different people. But again, ask yourself, is it enough?
It will also be handy for growing businesses to get help from an accounting professional. Accounting is broad and covers more than just sales and income. It also involves taxes, budgeting, and business planning. A professional is better suited to handle these areas.
Final Thoughts
Whether you own multiple businesses or are just starting out, accounting software is a great help in managing your finances and performing other tasks like payroll, bookkeeping, and inventory tracking. We hope this blog helps small business owners like you ask the questions to find the perfect accounting software for your business.
If you're looking for the help of professionals, Unloop offers different services to help you run your business. We have bookkeeping, accounting, forecasting, and tax filing services. Book a call with us today!