The Importance of Accounting Software in Today's Business World

Accounting software is an automated system that helps bookkeepers and accounting professionals report and document a companies financial transactions. Accounting software is a must in today’s business world because almost every company uses them. It’s a much easier solution to keeping track of your financial transactions by hand, as accounting softwares are automated systems that instantaneously report the transactions for you. Because of accounting software, valuable time, energy and money are saved.

When selecting a small business accounting software there are a few things that you need to consider. According to Angeles S. (2016), a good way to help you decide is to ask yourself these three questions: 1. How much are you willing to pay? 2. Why do you need accounting software? And 3. Which features does your business require in an accounting software program? Cost is a big factor in almost any business decision, and when choosing an accounting software to buy is no different. Accounting software programs obviously vary in price depending on what packages and features you choose. Almost all of the programs use a monthly subscription for the level of package you choose. The more bells and whistles, the more expensive the program is going to be per month. They vary anywhere from less than $10 to around $50 for an executive package. The second question, “Why do you need accounting software?” is important because it will help you determine the best accounting software for your specific small business. The following would be some things to think about when determining the answer to this question: Is your business growing? Are you just starting out? Do you want immediate access? Is your accounting system that you’re currently using too complicated for you? The last question, “Which features does your business need in an accounting software program?” can be answered by researching as much about accounting softwares as possible. This question is going to help you determine which package you need. Maybe you only need the cheapest and most basic package, or maybe you need to add a few extensions onto the program, it’s all about what you need.

Intuit QuickBooks Online is one accounting software program that you can choose to use. QuickBooks presents a vast amount of features for any and all kinds of small businesses. Some of the pros of QuickBooks include: Very user friendly and easy to use, affordable, flexible, you can customize almost anything, reliable and scalable (The Pros and Cons (2016)). Some of the cons of QuickBooks include things such as: Pricy upgrading which includes training, set up and implementation and, although QuickBooks is very flexible, sometimes users get themselves into trouble because QuickBooks allows them to do something that isn’t suppose to be done (The Pros and Cons (2016)).

Another accounting software that many businesses use is Xero. Xero is nice because it’s only $9 a month for the basic package, which includes unlimited users. This package, however, according to J. Marsan (2016), limits you to 5 invoices and 20 bank transactions. Although it doesn’t have as many features as QuickBooks, Xero gives you invoicing, payroll, payment processing and automation. Another good thing about Xero is how many other integrations come with it. Xero is combined with Salesforce, Base CRM, Shopify, Right Signature and many more (J. Marsan (2016)). People say it’s a good alternative to QuickBooks; it’s just all about preference.

The third alternative accounting program I researched was Wave. According to Angeles S. Wave review (2016), Wave is a great accounting software for businesses that are just starting out or plan to remain smaller. It’s good for people who are self employed such as entrepreneurs, freelancers and consultants as well as businesses with 10 or fewer employees. However if you’re a startup company that plans on growing you’ll eventually become too big for Wave and have to move onto a different accounting software. It’s great for small businesses because it’s very easy to use and saves you time. Wave is also a free program, which is a huge plus. Some of downfalls of Wave include things like: No customer service, no payroll services and advertisements (because the software is free the money has to come from somewhere).

In conclusion, record keeping is such a vital part of any business, big or small. Records help businesses keep track of progress, find your sources of income, prepare financial statements, prepare tax returns etc. On top of that, good record keeping can help increase the likelihood of a successful business as a whole by allowing you to plan/work efficiently, keep you out of legal trouble by reaching tax requirements, protect your rights as a business owner and produce significant reports. Most businesses use electronic accounting software because it’s much easier to use and eliminates human error that can surface through hand written records. Any business that doesn’t use some kind of accounting software is putting themselves behind the times and is handcuffing their own business because they’ve been proven to be, not only an asset, but also a necessity.