Accounting software, to the outsider, seems to be very straightforward offering similar features in different accounting software. However, once you are in the know, you will understand that it is not the case. The primary functions of an accounting software include accounts receivable, accounts payable, billing, general ledger and standard components like this.
There are a dozen of options that are available beyond these functions and features. They cover a wide range of functions and services. While some features are indispensable, some are the features which are rarely used.
Some of the functions that the accounting software must perform include financial projections, general ledger management, and cash flow management. Ledger management refers to balancing the ledgers at the end of the financial period. When a large amount of cash is invested and spent, cash flow must be managed. To improve the work process, financial projections can be used to make estimates for the future.
The features that an accounting software should have to be considered the best are discussed below.
10 Top Features of Accounting Software:
Here are the important features to look for in a good accounting software:
1. Reporting and Analysis :
In today’s business world, knowledge is power, just as information. Some of the important aspects of reporting and analysis are
- The accounting software should have reported and analyzed capabilities that are robust and accurate.
- It should help users gain insight into financial activities which are crucial.
- Reporting and analysis also help in conforming to the requirements and regulation of the Government and the Some of the regulatory guidelines that it should adhere to are Basel II Accord and Sarbanes-Oxley Act. This regulation also imposes pressure on businesses to make sure that financial information is published accurately and on time.
2. Graphics :
Accounting is basically focused on numbers. However, charts and other forms of visual representation are also mandatory. They are powerful tools that can be used in the representation of present trends. They are mainly used in scenarios where numbers cannot properly convey the intention.
3. Automatic Updates :
Most businesses use accounting software which is completely automated. The software has to be frequently updated. In case there are changes in the taxation laws or in the financial practices, the software should be updated such that it is transparent to the users.
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4. Automation :
Accounting software which can automate all processes such as expenses, time sheets, and payrolls, as well as the budgets of both, the company and the department are also needed. There also needs to be automation in the requisition of purchase and other financial activities that are complex.
Here’s a small quiz to test your accounting knowledge:
Quiz on Accounting Concepts & Principles
5. Customization :
Accounting software generally does not match the needs of the organisation and the business. However, they have customization. Forms, reports, and statements can be customized easily. Screens can also be changed. The help system along with other program facets is easy to manipulate and change according to your needs.
6. Internet Connectivity :
Cloud technology and the internet are the new trends of technology. The entire world is drifting towards technology and it is only fitting that accounting software does too. Apart from offering mobility, internet connectivity could also provide data backup and recovery options. Accounting software should be able to send and receive documents digitally as well as handle fund transfers that are electronic.
7. Inter-operability :
Data that is entered into the accounting software should be used by other applications of the business, such as sales, HR, shipping and other sectors. Similarly, the system should also be capable of using data from other software. In other words, it should be good at importing and exporting data. The infrastructure of the organisation normally uses a range of software; the accounting software must be capable of working with the other software in harmony. It is a crucial feature to look for in an accounting software.
8. Scalability :
In case the business grows bigger and becomes more prosperous, the accounting software should be able to adapt to it. The software should accommodate by itself, or it should be easily upgraded. It should have the capacity to accommodate a larger user group as well as increased transactions and growing amount of data that is mostly financial. These are the questions that should be raised to the vendor prior to the purchase.
9. Expandability :
The business should be capable of growing in both size and scope. The vendor should either have modules that can be added to increase the capabilities of the product or a path should be provided to migrate the users from the environment they are into the bigger full ERP one. Expandability also refers to the expansion in terms of different geographical locations.
10. Security :
The most important feature about handling any financial software is security. Data should not be lost or tampered with. Breach to security will result in severe losses incurred in the form of time, business secrets like sales and profit, and most importantly money. There have been instances where loss of financial information has resulted in the loss of the company itself.
Hence, the software’s built-in security features are very crucial and must be explained in great detail by the vendor. The software should additionally be capable of interfacing with the organisation’s security like network firewall and anti-malware technology and provide additional security.
Benefits of Accounting Software :
The software should be capable of multiple log-in. This will ensure that it is possible to track down who made the entries and for other monitoring purposes. It also helps to manage all types of accounting practices. Safety of records and files will be assured. The administrator of the software can have rights to the bookkeeping records which will be a suitable way to deal with the pressures of the organisation as well as ensuring data security and data tracking.
As the software takes up more features, it is also bound to be expensive. Products have to be simple by containing essential features which are used regularly. They should also be capable of carrying out all the important tasks involved in financial accounting.
To find the right accounting software, it is important to analyse the needs and the requirements and a clear understanding of the functions that it has to perform. If you have any views to share, you can do the same in the comment section below. Your valuable feedback shall be much appreciated.