Visualize expenses and transactions across a company
Accounting software enables businesses of all sizes to look at how money moves throughout a company. This can be done using the general ledger, accounts payable and accounts receivable features, which are included in the most standard of accounting programs. Some vendors offer greater insight into money movement through visualization features or notifications of money movement within a business. Here are some of the specific tools and functionalities that give companies more control and oversight of the financial process:
- Transaction processing
- Custom sub-ledgers
- Check writing
- Payable analysis
- Vendor master file
- Drill down
- Bank reconciliation
- Cash receipts
- Online invoicing
- Customer master file
- Debt collection
Analyze asset depreciation and associated costs
Fixed asset management tools are a key feature included in accounting solutions. This function enables users to look at items such as real estate, vehicles and machines to analyze how their value changes and what costs they have generated over time. For example, with an accounting program, you could estimate the cost of repairs needed for an owned building along with other ownership costs such as utilities.
These costs are often accounted for separately within accounting solutions because they don’t quickly turn a profit. Fixed assets typically include a high upfront investment with some ongoing costs to facilitate and improve the rate of sales. Purchasing a new building for your brick and mortar efforts itself doesn’t generate revenue, but establishing a new location where items can be sold and marketed to potential customers can eventually improve your company’s bottom line.
Automatically pay employees and contractors
Instead of calculating and dispersing payroll manually, accounting software can conduct payments automatically. It can be especially difficult to manage payments to contractors, which is why some solutions include the ability to assist in payments to these individuals as well. Vendors may also include the ability for payments to be issued on a project basis.
A key component to automatic payments is the approval of employee hours and expenses, which in turn allows money to be dispersed to employees quickly and efficiently. By containing approvals, time-off requests, and salary information in a central repository, the payment process can be expedited.
Develop budgets from historical data
Accounting systems often have budgeting features that assist users in creating effective and attainable budgets. This is done through the analysis of historical financial data, which is used to inform realistic future goals. This feature can also be used to estimate project costs and set realistic expectations of the amount of capital and the resources needed to complete a project. These systems enable users to look at past budgets, review planned budgets across a company and to forecast financial needs.
Manage tax payments
Taxes are a tedious but important reality when it comes to your company’s financial compliance. The bigger your company gets, the more complicated taxes can become, which is why accounting programs often include the ability to streamline the tax management process. Some vendors offer auto-tax calculators so that you know exactly how much revenue to allocate for tax purposes. Additionally, if your business operates in different tax zones, the program can help you calculate owed taxes for each relevant location.
How Do I Select an Accounting System?
The functionality that’s included in an accounting program differs depending on the vendor that you go with. This is why it’s important to keep factors such as your company’s specific needs, business size, and software budget in mind when selecting the system that’s right for you. Because finding the right vendor for your organization can be so difficult, we at SelectHub have created an easy-to-use interface to help you compare accounting vendors to find the one that aligns with your goals. Check out our accounting requirements checklist or our list of the best SME accounting software to learn more about the available systems and to see what you need out of your program.