What is accounting software?
Accounting software is a program that can help you perform accounting tasks such as keeping financial records, bookkeeping, tracking income, tracking expenses, payroll, and tax calculations. Used by individuals, self-employed, bookkeepers, accountants, and finance managers, it keeps all of your financial data in a single place, keeping everything organized and easy to access.
What is accounting software used for?
Online accounting tools can be used for various operations, from simply tracking your income and expenses, sending quotes and invoices, and setting up payroll for employees.
Depending on what you need it for, many accounting software can integrate with your bank accounts to import transactions directly into your accounting platform, saving you time.
You can use them to help provide the information you need quickly and easily in case of a financial audit, keeping everything logged and in order. This helps limit the number of discrepancies across the books and reduces errors.
When it comes to figuring out tax calculations and paying tax on time, many online accounting systems provide you with the tools you need. Whether it’s calculating sales tax, corporation tax, or personal tax, depending on what you’re using it for.
Another use of this type of online software is to give you an overview of your current business cash flow. Reporting tools provide you with a representation of how your business stands financially at a glance.
Who uses accounting software?
Financial software might seem like it’s just for accountants to manage their clients’ accounting affairs. However, it has many uses and can be used by all.
Yes, accountants can use it, but it’s also suitable for individuals who want to keep track of their personal spending habits. Self-employed can keep track of their expenses, income, invoices and calculate tax.
While small business accounting software can manage employee payroll and record their day-to-day payments and transactions, larger companies with dedicated finance managers can use it to automate tasks and do all of the above.
Accounting software features
There are many different accounting software tools, each offering a different level of service and features from the next.
A few key features you’ll find in many of the best accounting tools include:
- Accounts Payable – keep track of the payments you need to make and when, whether that’s creditors or suppliers
- Expenses – keep track of your expenses, upload receipts, and view your spending habits
- Tax Calculations – calculate your sales tax, VAT, and corporation tax automatically
- Bank Connections – securely connect with your bank to automatically import your bank transactions and records
- Accept Payments – connect with popular payment systems to accept payments online, letting you receive the money into your account quicker
- Payroll – automate your employee payroll, pay your employees, calculate national insurance and pension contributions
- Quoting – quickly create quotes to send to clients and track open deals
- Invoicing – create invoices manually, or automate your invoice based on projects and quotes
- Reporting – view expense reports, profit & loss reports, tax summaries, general ledger, balance sheets and financial forecasting to see details at the click of a button
- File Storage – store your financial data, receipts, client data, invoices, and documents
What are the benefits of accounting software?
You no longer need multiple programs and excessive spreadsheets to keep track of your personal or small business finances.
Online financial accounting software makes it easier to complete complex tasks and manages your finances.
Some key benefits include:
- Save Time – one of the biggest advantages of using accounting tools is that it will save you time. Quickly look up the data you need, and integrate with various apps to help streamline your business
- Keep Organised – access all your finance data in one place. Easily view receipts, manage invoices and keep track of your records.
- Simplifies Payroll – a few clicks can get your payroll setup easily, integrating with the various government systems making paying your employees easier
- Automates Tasks – save more time by automating tasks like importing your bank statements and transactions or creating and sending out invoices on successful quotes
- Reduces Errors – let the software do the calculations for you leading to a reduction in errors and cleaner books
- Reporting – get a real-time overview and quickly see how your cash flow is doing, where you’re spending too much money, and where your income is coming from at a glance. No need to look through invoices and receipts to tally up your totals.
- Access from Anywhere – cloud-based accounting software means you’ll be able to access your finances from anywhere in the world with an internet connection on any device
