No matter the size of your operation, a small tax error could cost anywhere from $5,000 to millions of dollars.
You can’t do good business if all that your accounting department is offering is reams of bad data. If you’re wondering “what is accounting software and how could it help me?” Now might be the time to switch.
Accounting software can be anything that collects and calculates your data to something that handles the hard work for you. Either way, accounting software will be able to assist your business in making good decisions about your financial future. With the help of the best software, you can scroll through years of records to compare and contrast for any changes or errors.
If you’re interested in what to look for in accounting software, seek these six capabilities.
1. Make Sure You Can Collaborate
No matter what size your company is, the need for collaboration is a must. For you to work with the rest of your staff, there should be a collaborative aspect to your accounting software.
If you decide to outsource your bookkeeping to someone else, you should be able to look at their work while it’s still in progress. Finding and fixing mistakes before they get out of hand could save you from headaches later.
Collaborating is also essential to ensure that different people across your enterprise can double check work. Having a hierarchy of people who look through your bookkeeping means that you’re more likely to catch mistakes before they turn into payroll overpayments. Bookkeeping mistakes could turn into problems with your taxes down the line.
You may be in the situation where you need more than one person working on the same file at one time. You need the business financial software you choose to be able to handle multiple logins.
If it can log changes in real-time, it can reconcile any issues before two people enter duplicate data or make calculations based on inaccurate information.
2. It Needs To Connect To The Cloud
Connecting to the cloud is essential for any contemporary software program. Rather than having your data connected to a single machine somewhere in your office, it needs to be accessed by other people when they need it.
Your data might also not be safe just sitting on a device in your office. If you get hit by a data breach or a ransomware attack, your data could be wiped out. Or, it could be held hostage without any access to get it. With your bookkeeping information on the cloud, you’ll be able to wipe your system without worrying about losing your financial information.
With the average data breach now slated to cost around $3.5 million, this figure includes lost revenue in wages spent on redoing lost work. Rather than having to track down every transaction and create a new financial record, just download your bookkeeping from the cloud.
You never know when your cloud-based system could come in handy.
Keep yourself protected from any nefarious actors who might want to break into your facility or get ahold of your servers. Maintain control with your software connected to the cloud.
3. It Should Be Compatible With Every System
Any accounting software that you work without should be compatible with the system that you’re using in your office. Whether you’re using Mac, Linux or Windows, your software should be agnostic.
You never know when your company might make a big shift from one platform to another. If your favorite software company stops making the software you need for one platform, you might need to make a quick 180-degree turn.
Rather than having to backtrack, make the decision from the start that your bookkeeping won’t be as bound to a system as your productivity software. Whatever software you use should be able to be used across multiple devices and operating systems.
Look for accounting software that has a mobile app option. This way you can start integrating your employee and office expenses into your bookkeeping automatically. If you can take a photo of a receipt or import a transaction from one app to another, you could save valuable time when you need to reconcile your finances.
Compatibility means that if you need to hire someone new who uses their own device or has their own way of doing things, they’ll be able to feel some familiarity.
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4. You Need To Have Export Options
When it comes time to send your files along to your tax specialist or your payroll department, it’s crucial that you have lots of export options. Everyone will want your files in a different format. You should have everything from PDF to CSV options.
If you’re able to export your data into a CSV file, other people will be able to plug the data into the system that they’re comfortable with. CSV files are flexible and malleable. They offer the ability to be plugged into just about any kind of organizing schema.
You should also be able to export certain sections. If an employee needs to know how much they made last year, you should be able to isolate that information. Otherwise, you could be digging for weeks just to get the data you need.
Some accounting software allows you to do batch exports. This means you can set the software up to export an individual report for every employee. You could also export the data for every transaction with a certain vendor in the case that there’s any kind of conflict over whether or not you got a shipment.
The ability to export broadly offers you the ability to collaborate with more people across more barriers.
5. Software Should Make It Easy To Organize
Your software should fundamentally make it easier to organize your information. Whether through color coding, creating tabs or customizable tables, these options should have little to no limit.
Everyone working on your system will be comfortable with a different setup. If your system remembers logins and connects each user profile with a visual style, you’ll increase engagement from your employees. The ability to make the workspace your own is a privilege that makes work easier.
You should also be able to organize your data by different time periods. The ability to isolate a certain quarter or a financial benchmark that’s unique to your company means you can track profits over time. The better you can get down to the granular details of your finances, the better you can make your profits for the next quarter.
Fundamentally, your software should make your life a whole lot easier.
Organization is the key to success. The ability to organize invoices as they come in and payments as they go out, in a broad visual way, allows you to quickly scan for what you’re looking for. If you’ve got a big company, it could take you awhile to find what you’re looking for.
Organizational tools and features allow you to seize control of your finances efficiently.
6. It Should Match Your Other Systems
Your accounting software should match up with the rest of your company. If you’re finding that you’ve got a great accounting software and a great pay stub generator that just won’t work together, reassess their greatness.
The greatness of a system is only based on how well it helps you to perform. Once it starts getting in your way, it’s outlived its usefulness.
Be aware that technology is constantly moving and that you’ll likely need to make tech upgrades in the coming years. As you decide on each upgrade, you’ll have to consider your accounting software. Your accounting program needs to be a priority.
For example, if you were dying to change your system over to Linux, and you can’t find software, it might be better to stay with your current system. Jumping ship could cause you a lot of headaches or make it so you have twice as much equipment around. With all of that clutter in your office, you might have a hard time getting work done.
Save yourself a headache and make sure your accounting software matches the needs and requirements that your system offers. If you have to invest $10,000 more just to meet the basic requirements of your office, it might not be worthwhile. You could pay someone to do it part-time for much less than that.
There Are Many Definitions Of What Is Accounting Software
The answer to the question “what is accounting software” depends on what you need it for. Accounting software can be your bookkeeping software to keep track of spending. It could also be handling your payroll, calculating your taxes and sending you regular reports.
If you’re using your accounting software to generate forecasts for the coming year, follow our guide to ensure you avoid any errors.
You can also take our product tour to learn the helpful features we offer. This should help you find accounting software that meets your unique needs.