If you run a small business, you want to be as successful as possible as quickly as possible. Sounds like a great plan. Unfortunately, it’s not always that easy. There are sure to be bumps along the way, forcing you to make course corrections. To make those adjustments successfully, you need data, and the more accurate data the better. That’s where accounting software for small businesses enters the picture.
With accounting software, you can determine things like cash flow, expenses, profits, and trends for your business. Finding just the right accounting software requires that you first figure out the financial tracking needs you have for your business and then seek the software that has strengths in those areas.
We’re here to help with that search. Our buying guide has the information you need to find the right accounting software for your business. We’ve included some recommendations to get you started, too.
Key considerations
Small business accounting software can give you a variety of benefits, making it easier to operate your business smoothly. The basic components include basic accounting, data entry, invoicing, and payroll.
Basic accounting
To give you a better level of performance versus tracking your finances in a spreadsheet, accounting software must give you several basic accounting features. With all of this information, and the various reports the software generates, you should be able to see the performance of your business in real time. Some of these features include the following:
- Tracking accounts receivable
- Tracking accounts payable
- Keeping up with the day-to-day ledger
- Reconciling the bank statement
- Marking data needed for tax filing
Data entry
If you struggle to enter your financial data accurately into your spreadsheets, accounting software can help. It can pull data from places like your bank accounts and point-of-sale software, automatically transferring it to the accounting software and eliminating most data entry errors. It also saves time versus entering data by hand at the end of each business day.
Invoicing
It’s difficult to run a small business successfully if you struggle to generate bills and invoices in a timely manner. Accounting software excels in this area, ensuring that all transactions appear on each bill that you send to your clients so you don’t miss any payments. Many accounting software packages generate invoices automatically at certain intervals, such as every week, every month, or on a customized schedule.
With invoice generation and tracking in the software, you can generate reports to see who has paid you and who hasn’t. At tax time, all of your income information is at your fingertips.
Payroll
Some accounting software includes payroll generation, making it easier to track your payroll expenses when creating reports to see how your business is doing. Like invoicing, the data is all in one place.
Tracking taxes should also be easier with all of the payroll information in the accounting software. You may be able to customize the software to follow tax laws and regulations in your location.
If you choose an accounting software package that does not include payroll capabilities, you will save some money. If you use a payroll company to handle this aspect of your business, it might be able to connect with your accounting software to pull the data it needs to generate the payroll.