What Is Accounting Software?
Accounting software at a minimum keeps track of financial transactions to record profit loss and better improve business finances and overall cash flow. Core functionalities include general ledger (GL), accounts payable (AP), and accounts receivable (AR). Common additional functionalities include payroll services, billing, project management, and inventory management data.
Many industries have customized financial management functionalities/requirements like fund accounting for nonprofits, job costing for construction firms, or DCAA compliance for government contractors.
There are also different ways of conducting your accounting process, such as single-entry or double-entry accounting.
In larger organizations, the terms “accounting software” and “ERP” are often used interchangeably. The right software will provide the data management tools you’ll need for accurate account balances and let you be ready at tax time.
Features of Accounting Software
Business accounting software has features and applications that can be broken down into basic categories, such as common (typically found in all accounting software), industry-specific (only found in certain types of accounting software), and advanced (only used by mid-sized to larger businesses).
While many top accounting software features exist to benefit your business, lets focus on some of the essentials.
What Accounting Software Does Your Business Need?
Creating financial management reports with your data, using mobile apps, finding a new support vendor, or finding the cheapest cloud-based accounting option; everyone has their main motivation for finding a new solution.
The buyer trends report mentioned above reviewed more than 3,000 accounting software projects and found the needs and motivations of many buyers. While many types of buyers exist, most can fit into these common categories below.
New Buyers and Small Businesses
New buyers will likely desire a basic solution that can easily and automatically manage their finances and help them pay bill. 37% of the companies we surveyed are buying accounting software for the first time. Many small business software buyers were looking for increased functionality over their current methods, which ranged from a manual bookkeeping method (pen and paper) to a popular starter solution such as Zoho Books or Sage 50c (Peachtree).
Existing Users Desiring Functions Beyond Core Accounting
Over 20% of buyers said they need more software that handles payroll, inventory management, and invoicing. These features are common in enterprise business accounting software. A growing business also has more users in the system, which means vendor support may be needed more frequently if your staff isn’t trained properly.