Choosing the appropriate business accounting software for a company is crucial. It effectively manages the fundamental operations and data for the entire organization. By automating tasks, such as transaction recording, payment tracking, and financial statement generation, accounting software saves both time and money. Furthermore, certain accounting software includes additional functionalities, like advanced analytics, mobile support, payroll management, asset tracking, budgeting, and project accounting. While not all businesses require every feature, it is essential for companies to consider potential future needs as they expand.

Business accounting software explained

Accounting software refers to computer programs or applications designed to facilitate and streamline financial management and recordkeeping tasks within a business or organization. It serves as a digital tool to record, organize, and analyze financial data, enabling businesses to effectively manage their finances, track transactions, generate reports, and ensure compliance with accounting principles and regulations.

Accounting software typically provides features and functionalities such as:

• General ledger management
• Accounts payable and receivable tracking
• Inventory management
• Payroll processing
• Financial statement generation
• Budgeting
• Tax management

These software solutions automate various financial tasks, reducing manual errors, improving efficiency, and saving time for businesses.

With accounting software, companies can maintain accurate and up-to-date financial records, track income and expenses, manage cash flow, generate invoices and financial records, reconcile bank statements, and make informed financial decisions. Accounting software offers a centralized platform for financial information, allowing businesses to monitor their financial health, identify trends, and make data-driven decisions to drive growth and profitability.

Overall, accounting software plays a crucial role in simplifying and streamlining financial processes, enhancing accuracy, and providing valuable insights into an organization’s financial performance.

Ten key features business accounting software should have

Every accounting software must effectively manage essential accounting tasks, like recording transactions, tracking payments, and generating financial statements. However, as companies expand, they often require additional functionalities. Thus, it is vital to carefully evaluate capabilities when selecting accounting software, ensuring it can meet both current and future requirements and that it has these key features:

1. General ledger management

   The general ledger is the central repository for all financial transactions within a business. Look for accounting software that offers robust general ledger capabilities, which allows the tracking and management of financial data.
   
   The accounting software an organization chooses should offer comprehensive support for fundamental accounting tasks, including transaction recording and categorization, general ledger and charts of accounts (COA) management, and the generation of financial statements and reports.
   
   Accounting software should automate basic bookkeeping and workflows, such as creating journal entries, reconciling accounts, and performing basic. Some software enables users to toggle quickly between the generally accepted accounting principles (GAAP) standard used in the United States and the international financial reporting standards (IFRS) used in other countries. This feature is especially beneficial for growing businesses with international operations.

2. Accounts payable and receivable

   Efficiently managing accounts payable and accounts receivable processes is crucial for maintaining healthy cash flow. Look for software that provides tools for tracking and managing invoices, payments, and outstanding invoices.
   
   Accounting software offers the advantage of expediting cash flow by automating invoicing and collection processes. It enables efficient management of accounts receivable by automatically generating invoices, overseeing credit terms, and improving payment collection through automated alerts and multiple payment methods. The software empowers accounts receivable staff to monitor the status of outstanding invoices, access customer payment history, and track key performance metrics like days sales outstanding (DSO).

3. Financial reporting with business accounting software

   Generating accurate and comprehensive financial reports is essential for monitoring the financial health of a business. Choose software that offers a variety of financial reporting options, including balance sheets, income statements, cash flow statements, and customizable reports.

4. Bank reconciliation

   Bank reconciliation is the process of matching a business’s financial records with its bank statements to ensure accuracy. Accounting software with built-in bank reconciliation features can simplify and streamline this process, saving time and reducing errors.

5. Budgeting and forecasting

   Creating budgets and forecasts allows organizations to plan and track financial performance. Look for software that includes budgeting and forecasting tools, enabling users to set financial goals, monitor progress, and make informed decisions.
   
   By utilizing both historical and real-time data, businesses can generate budgets and forecasts that aid managers in predicting future business performance. These budgets serve as a benchmark against which actual performance can be tracked, enabling the identification and resolution of any issues. Managers and financial experts can delve into the specifics to identify areas where the budget has been exceeded, promptly address concerns, and make necessary adjustments to enhance business performance. Analyzing this information also enriches the ability of a business to generate more precise forecasts for future periods.

6. Tax management

   Accounting software with tax management features can help companies stay compliant with tax regulations and simplify the tax filing process. Be on the search for software that supports automated tax calculations, provides tax forms, and generates reports to assist with tax preparation.

7. Inventory management

   If a business deals with physical products, having inventory management capabilities within accounting software is essential. Check for features that allow the tracking of inventory levels, management of stock movements, and generation of inventory reports.

8. Payroll processing

   Payroll management can be complex and time consuming. Accounting software that includes payroll processing features can automate tasks such as calculating wages, generating pay slips, and filing payroll taxes, ensuring accuracy and efficiency.
   
   As businesses expand, manual calculation and management of payroll becomes increasingly complex. Factors adding even more difficulty to ensuring workers get paid on time and at the proper amount include:
   
   • Multiple pay scales
   • Overtime
   • Benefits
   • Sales commissions
   • Contract workers
   
   Integrated payroll management software automates various payroll calculations, including gross and net pay, payroll tax withholdings, and health and retirement benefits. It also generates necessary forms such as W-2s and 1099-MISCs, among others. This software ensures accurate collections and filings of local payroll taxes in different jurisdictions, making it an essential feature for businesses operating in multiple states or countries.

9. Multi-currency support in business accounting software

   For businesses operating internationally or dealing with multiple currencies, accounting software with multi-currency support is vital. This feature enables organizations to process transactions, record financials, and generate reports in different currencies.

10. Integration and scalability

    Organizations should consider whether the accounting software can integrate with other business systems they use, such as customer relationship management (CRM) or inventory management software. Additionally, be sure the solution of choice can accommodate expected growth and handle increased data volumes as a business expands.

Citrin Cooperman’s accounting software Solutions

Accounting software offers indispensable features and capabilities that streamline financial processes, enhance accuracy, and drive business growth. From automating invoicing and collections to managing accounts payable and receivable efficiently, the software Citrin Cooperman works with empowers organizations to accelerate cash flow, gain better control over their finances, and make informed decisions based on comprehensive financial data. By leveraging the power of accounting software, companies can improve their financial management, optimize budgeting and forecasting, and ensure compliance with accounting standards and regulations.

With our expertise and experience, Citrin Cooperman’s Digital Services Practice can guide you through the selection and implementation process, assuring you find an accounting software solution tailored for your business needs. To learn more about how our team can help your business leverage the benefits of accounting software to achieve its strategic goals, reach out to your Citrin Cooperman advisor or Maria Hammadi at sales@citrincooperman.com.