The general ledger is the definitive and comprehensive statement of all your company’s financial activity. It is also the most time-consuming, complex and misunderstood tool for a business owner.
Do you fully leverage its information to make the absolute best strategic and financial decisions for your company?
General ledger reconciliation is one of the most repetitive, precise, and complicated accounting tasks for 29 million small business owners in the United States. Any lapse in general ledger accounting is possibly fatal to the company. For small business owners, oversight of the general ledger accounting process is key.
Read on to learn the benefits of general ledger accounting systems and how they can assist you.
Time is Money
Tried-and-true methods of keeping your books the old-fashioned way in a spreadsheet, or even on old-school green ledger paper still exist, but are tedious and require more expertise than most owners can devote. Online general ledger accounting:
- Saves Time
- Creates Efficiencies
- Provides Information in Real Time
- Accessible from Anywhere
- Easily Shared
It’s hard to imagine decisionmaking without vital financial information. Online accounting systems have search functions, rapid data handling and reporting, convenient management and more. Business owners polled wanted:
- Business-Specific Functionality
- Ease of Use
- Seamless Features
- Third-party Integration
Online accounting software that shares data and integrates with existing programs and services already in use is most popular. Typical integrations include POS systems, payment processing, advanced inventory management, e-commerce, email marketing and contact management.
Two Major Players
Quickbooks Online is top-rated for small business accounting. Developed by Intuit in 1983, it offers fully integrated modules for invoicing, payments, payroll and more.
Xero was launched in 2006 and quickly built a following with its elegant interface and more than 600 add-ons in their marketplace for extended features.
Quickbooks Online — Long on Features
Quickbooks Online has the basics, which includes features like a wizard-led, fully modifiable chart of accounts and journal entries. QBO has its own automated bank feeds service and can manually import files (like CSV and QFX) as well. QBO automates the categorization process with a combination of internal logic and user-created rules.
Quickbooks Online allows the creation of invoices in advance, specifying how many days in advance, including unbilled charges and sending an email to the customer. QBO/Intuit Payments is a seamless system and the whole process, from charging customers to reconciling your banking, is handled without awkward data exchanges leading to transcription errors.
Quickbooks Online Inventory tracking feature is robust and includes several customizable features such as inventory tracking, vendor management, and purchase orders.
Tax features built into QBO include automatic tax calculations, multiple tax rates, and tax reporting as well as third-party integrations for several popular tax programs and optional online access for a tax preparer.
QBO has a superior mobile interface app featuring:
- Invoice Creation
- Expense Tracking
- Receipts and Notes Storage
- Bank Reconciliation
- Profit & Loss Reporting
- Recent Activity from Customers and Suppliers
- Payments from PayPal and Square
- Customer Messaging and File Attachment
Reports for GL accounting are easy, as QBO reporting is both wizard-based and customizable, with nearly unlimited drill-down ability.
Payroll processing and payments processing are available add-ons. Also, Quickbooks Online includes telephone support and online training.
Xero — Highly Customizable
Xero’s intuitive interface belies its full coverage of the basics, including a modifiable chart of accounts and journal entries. Xero uses Yodlee for automated bank feeds and can accept manual imports. A combination of internal and user-created rules automate the categorization process, but Xero offers more fine-tuned control. Xero’s cash coding feature provided to accountants and bookkeepers allows batch processing of transactions.
Xero offers the tools needed to invoice customers and enter bills from vendors as well as a billable expenses feature. Xero allows group billing via recurring templates, (a feature that QBO does not have) but requires a more robust add-on for more complicated invoices with variables like different discounts for various customers or additional billable expenses.
Customization of emails and invoices is easy with Xero. Xero allows you to assign templates to specific customers as well as create .docx templates. In addition to just looking good, Xero has an approval process for invoices and bills, which is not available in QBO.
For payment processing, Xero has multiple payment processing choices and superior data import/export capabilities.
Add-ons to the Xero general ledger accounting system are rigorously tested for compatibility and include e-commerce, timesheets, POS systems, and inventory systems.
Knowledge is Power
All of your profit/loss statements, balance sheets, and all other measures of financial performance are derived from your GL. General ledger accounting enables you to create a complete and transparent image of your business’ performance. In selecting the correct general ledger accounting system, consider:
Retail, manufacturing, or professional services have unique accounting needs and Xero or Quickbooks Online may be better suited.
Size and Growth Rate
Accounting needs will increase in size and complexity as your business grows. Depending on how your business grows you may favor the scalability of one program over the other.
Third Party Compatibility
Do you run a contracting firm with specialized quoting software that needs to be integrated with your billing process? A restaurant running Aloha POS? Smooth compatibility with your existing process is important.
What features or accounting modules are absolutely necessary? Some business owners need only very basic features, such as having a simple checkbook. Others business owners have more complex needs for cash control, online banking interfaces, payment processing, inventory management, and customised invoicing.
Business owners are generally not accounting experts. Look for online resources, built-in help features, and the availability of email, phone, and chat support as well.
Consultants are an often overlooked area of support. Having local experts to contact with your GL questions is invaluable. ScaleFactor’s team of business advisors, bookkeepers, and certified public accountants can provide you with assistance with making your general ledger accounting software selection and layering in extras like a digital finance assistant, fully automated transactions, compliance calendars, seamless cash flow management and smart forecasting.
Oftentimes, there are many resources available within Xero or Quickbooks Online, but you need simple, industry-specific accounting advice for your business.
Even with the right general ledger accounting system, a business owner is still at the mercy of entering good data, creating useful reports, analyzing trends critically and still finding time to make sales and chase payments. Financial records become neglected or go missing without a significant amount of time going into their maintenance.
ScaleFactor’s automation tools solve this problem by speeding up the entire information flow. Using ScaleFactor’s intuitive platform and dashboard gives business owners the power to use fresh, real-time insights and focus on what they do best.
Automated bookkeeping completes the tedious process of journal entries and reduces the typical reporting cycle time. Financial insights take one day, not 30. By showcasing the present metrics as opposed to past measurements, ScaleFactor makes it easier than ever to be boldly proactive, rather than shaking your head at the numbers a month later.
Fast-growing companies might have a dozen or more software programs on top of general ledger accounting to function. With the seamless integration of ScaleFactor, it is possible to simplify and prioritize the most important daily tasks for the business to operate smoothly and still keep an eye on moving forward. ScaleFactor moves beyond the humble journal entry, with the opportunity to automate financial operations and simplify all back-office operations. ScaleFactor’s advanced artificial intelligence learns your business practices and makes suggestions to help your business grow.
Solutions like an integrated suite of intuitive interfaces for bill pay, invoicing and compliance management makes it easy to pay bills quickly and collect payments due. Managed alongside their GL entries, business owners can see accurate cash and receivables instantly, without waiting for an accountant at the end of the month.
Keeping abreast of quarterly tax filings, administrative deadlines and gathering the associated reports has never been easier. The compliance management tool tracks and shows what and when something is due.
Never miss a filing deadline of federal, state and local tax returns or other administrative deadlines that are important. ScaleFactor gives a countdown of what is due and information on how to complete it quickly. Experts at ScaleFactor can also complete the items as well.
ScaleFactor was created to change the way business owners think about their finances from reactive to strategic. With the right base general ledger accounting software and ScaleFactor, business owners have the information to proactively make decisions all in one place.
General Ledger Accounting Answers
The heart of your financial management system where you store, manage and endlessly dissect every transaction is your general ledger accounting software. As a business owner, “basic” isn’t enough. you need easy, clear and scalable too. Unlike basic business ledger software alone, ScaleFactor uniquely layers the extensive flexibility, scalability, and immediacy your business needs to thrive.
ScaleFactor makes it possible for business owners focus their brains, energy, and attention on running their business, not their accounting process. For more ideas about selecting the right general ledger accounting software for your business and how ScaleFactor can help your business grow, keep reading and comment below.