The Key Types of Accounting Software
Introduction
Finance and accounting have always been weaknesses, I am sure like me many of you still haven’t mastered finance and accounting to date. Well, fret not, the following post is right here for you. As the name suggests the post focuses on what accounting software is, how it is beneficial in the long run and what are the top kinds or types of accounting software available around.
It’s okay to feel overwhelmed when you have too many options at your service but that certainly doesn’t mean you need to pick randomly. You see not every tool can seamlessly fit your technical skills, business goals, and most preferred operating methods. So before we directly hop on the different types of accounting software available, let us take a bit of a detour and understand what accounting software is, and why or how it is beneficial in the long run.
What is accounting software?
Accounting software is a tool that is used to successfully track different kinds of business activities, especially financial ones. Apart from this, also several perks such as managing the cash flow, and accounting ledgers are pretty obvious. Features of accounting software generally include:
To manage all accounting functions of the business
Basic tasks are well taken care of such as general ledger, accounts receivable, accounts payable management options
Inventory management, proper pricing, billing and collections
Financial report template generation options
Comply with different accounting rules and regulations, such as GAAP and IFRS.
Tax Preparation
Seamless automation of different accounting tasks such as payroll and billing
Key Types of Accounting Software
Spreadsheets
Microsoft Excel is one of the most known spreadsheet programs mainly considered for accounting purposes. You see here you are bound to learn about the basic foundation of accounting where businesses can easily track their income and expenses, create invoices, and calculate property taxes. Unfortunately, here you won’t find features such as double-entry bookkeeping or generating financial statements.
Commercial Accounting Software
The next key type of accounting software worth considering is commercial accounting software. Now this one offers a full-fledged range of features and functionalities and turns out to be the ultimate solution for both large and small enterprises.
Commercial accounting software tends to remain subscription-based and here you can find them featuring a wide range of pricing plans based on different features and functionalities. Some of the common yet pivotal accounting functionalities include:
Generating proper financial statements
Tracking income and expenses
Double-entry bookkeeping
Preparing invoices
Inventory management
Managing Payroll
Tax Preparation
Businesses nowadays tend to partner with banks as well as other relevant financial institutions that offer amazing integrations enabling businesses to successfully manage their finances in one place, it’s more like having a full-centralized system. So if you are keenly willing to streamline the accounting procedure, commercial accounting software should be taken into account.
Enterprise resource planning software
Another interesting type of accounting software that is pretty much in vogue is enterprise resource planning software. This one can also be considered as a comprehensive business solution that covers tons of aspects of a business, featuring accounts. If you own a large business and require a program to take care of all your complicated financial customized needs then this is it, you need to stop your hunt right away.
In addition to some basic accounting capabilities, these commercial solutions offer some of the most power-packed tools for financial analysis and forecasting. The only concern is, it is way more expensive than other kinds of accounting software.
Custom accounting software
The next type to consider is custom accounting software which is successfully designed and developed for a specific business in accordance with unique requirements. Such software is more expensive in comparison to commercial off-the-shelf solutions, greater flexibility and customization are what it takes when you choose a custom accounting software. As the name implies, all you have to do is ask your development company to create software right in regards to your needs and requirements and the results might come out as expectations or even surpass that as well. With custom accounting software, managing finances effectively is quite a given condition.
Cloud accounting software
The next interesting type of accounting software to consider is cloud accounting software. Another commercial software which offers services via the internet. Yes, here you no longer need to install it on the company’s servers. In other words, businesses can have seamless access to accounting data and applications from any device. The only requirement here is that it is supposed to have a strong internet connection. As far as the price is concerned, these kinds of accounting software usually come with monthly or annual subscription plans.
So what makes cloud accounting software a cut above? Well, these offer immense flexibility and mobility. In other words, it is possible for businesses to access data from anywhere and that too without incorporating any kind of complex infrastructure. So what could be the downside here? Well, businesses need to rely on the internet connection. In case, there are any disruptions to the internet connection, businesses will not be able to access their data or applications.
Top Accounting Software to Take a Look at
1. QuickBooks Online
The first and foremost accounting software that must be taken into account is QuickBooks Online. Now this is one of the best general accounting software available across the globe. If you take a look at the Quickbooks industry pedigree, it has been quite in vogue and has been well-suitable for both small and large industry verticals. Some of the core aspects offered by this accounting software include a simple and easy-to-use interface, readable data, a wide range of automation options and ease of conducting boring, monotonous and repetitive procedures. Some of its top-rated modules include:
Asset management
Banking management
Accurate financial statements
Inventory management
Tax management
Why is QuickBooks one of the leading accounting software available? Well, it offers streamlined procedures which means whether it is input or revising delivering, or transferring financial data, everything is easy to do and well-streamlined. In addition to this, all kinds of sensitive information can be well protected, there are no typos or manual errors since the software features automation tools, and the overall workflow efficiency is well improved. Some of its prime features include income and expense tracking, it is possible to convert estimates into proper invoices right under different business requirements, all important financial reports can be created and different visualizations can be seamlessly translated into actionable data, everything is recorded in a single location and lastly, monitoring products and costs, and locating most popular items as well as forecasting different purchasing trends.
The only issue here is that the cost can be pretty high.
2 Acumatica
This accounting software is ideal for small as well as medium-sized companies. If you are looking for a highly customizable interface and powerful interconnectivity between apps. Some of its core aspects are powerful automation capabilities, centralized transactions, and real-time monitoring.
Banking management, financial statements, payroll management, project accounting, and tax management are some of its known and amazing modules. Some of its core benefits include:
Increased productivity - With automated data entry, all kinds of accounting tasks can ensure strategic planning.
Centralize Data - Another interesting concept is personalized dashboards and monitoring in real-time from a single location.
Support Multiple Currencies: Maintaining compliance internationally and conducting successful business across the globe.
Manage Multiple Sites - Segment or centralize accounting according to your company’s structure.
Streamline Compliance - Accounts can be handled without any extra human effort.
Other than these, you have a general ledger, accounts payable and receivable, cash management, and currency management are certain prime features to consider. As far as limitations are concerned, no third-party support is possible, implementation takes ample time, and the software can have recurring bugs.
3 Microsoft Dynamics 365 Finance
Last but certainly not least, Dynamics 365’s accounting platform turns out to be the most power-packed solution which is easy to configure and can handle everything from automation to analytics, just ensuring that all financial needs are well covered.
Much like other available accounting software even this one comprises budget management, financial statements, payroll management, and tax management. Here AI-driven data can assist well in anticipating financial trends, and it is possible to calculate payrolls as well as taxes. Another benefit to consider is adjusting finances in accordance with new tax rates, raises, and bonuses, and lastly, keeping finances in check with comprehensive transaction records. What else?
Accurate reporting
Machine learning
Role-based Workspaces
Compliances
Financial Planning
As per limitations, here you will get limited storage space, and the software lags pretty much especially while loading information. Also, features like mobile time tracking and bill transaction approval are not supported.
Final words
I hope you find the following post worth the read. In case, if you are still figuring out which type of accounting software to pick I would suggest considering some important factors before making the call such as:
Understanding the size of your business
Determining the budget
Focusing on accounting needs
Check if seamless integration is possible
Updates and customer support
Choosing the right accounting software is extremely important and this is how you will walk on the path of success. All the types in the post are worth taking the risk on. If you have any doubts or queries, feel free to mention them in the comment section below. We will certainly get back to you as soon as possible. Good luck with your future endeavors. Also, we would like to know if you have already used any types of accounting software in the past or specifically there is any type in your mind that you would like to prefer. For a better perspective, do let us know!