Accounting software refers to a kind of program software which processes and records accounting transactions in various functional modules like accounts payable, accounts receivables, general ledger, billing, and court balance. It acts as an integrated information system. It helps in tracking and organizing the financial transactions involved in an organization. Some of the accounting software are desktop-based system and online accounting systems.
Desktop accounting software is designed for small business, home, or individual. It includes various modules like accounts receivables, accounts payable, inventory, budget, expenses, income, cash flow, tracking of cash flows, income statement, balance sheet, and profit and loss statement. Some important modules in it include the following: bill pay, direct deposit, electronic banking, full payment, invoice management, customer relationship management, cost of goods sold, core modules, document management, distribution, cost of revenue, fixed asset management, fixed assets, buyer/seller relationship, human resource module, invoice processing, merchant service, marketing module, order processing, personalized credit card solutions, payroll, product returns, research and analysis tool, security and compliance tool, sales tool, store and forward, and service module. Online accounting software includes web-based and desktop-based versions. Both offline and online versions have similar modules but the online version is more comprehensive.
In some organizations, accounting software plays a greater role than accounting records. For example, some use time tracking feature of accounting software to keep track of employee’s hours worked, work history, vacation record, work sick leave, and turnover record. Also, time tracking feature can help in reducing errors in payroll preparation. Some companies also use time tracking feature to know and predict customer requirements and to keep them updated on services and products.
Other than accounting systems allow you to keep track of your invoicing. Generally, invoicing is an itemized statement of the purchase, sale, or other transfer of money from one customer to another. Invoicing creates and tracks timely and accurate accounts of sales, inventory, or services sold. If a company sends invoices with bills for items sold that don’t exist, it results in lost opportunities and may damage the reputation of the company. In addition, it can cause bad debts and drain the company’s capital.
Some companies may find online free accounting software like payroll, bank reconciliation, and invoicing suitable for their business needs. Online invoicing and payroll software help in the following areas: payroll management, bank reconciliation, and invoicing. Online bank reconciliation aids the management of a company’s banking transactions and provides information regarding the source and amount of cash flowing through the company.
Small businesses must take account of all the expenses incurred to make a profit. Small businesses, along with large corporations, must analyze and plan for expenses, generate reports on cash flow, and monitor cash inflows and outflows. For small businesses, direct deposit may not be feasible, but an online accounting software system designed for small businesses, such as payroll and bank reconciliation, will still help manage cash flows and prepare reports on expenses. Accounting software also makes tracking expenses easy, helps in budgeting, and helps with inventory control.