What is Accounting software?
Accounting software is nothing but an application software that records and processes accounting transactions. It collects and collates information related to the financial viability of a business. That, in a nutshell, sums up accounting software. Still a little hazy? Well, fret not. Think of a house. It’s got multiple rooms – the bedrooms, bathroom, kitchen, living room et al. Yet without electricity coursing through it, it’d be uninhabitable. Similarly, a business without a business accounting tool is an empty husk. A shell.
Accounting solutions can range from simple, single-entry programs used for cheque writing and record keeping, to intricate double-entry systems that can process accounts receivable/payable, payroll and inventory, among other functions.
Who Needs Accounting Software?
Every business, whether it’s a big enterprise or a confectionery, a supermarket or an MNC, an educational institute, an NGO or your local kirana shop, needs an accounting software solution. Through a business accounting tool, you can create invoices, track expenses and generate multiple reports to intricately analyse your business's performance.
Your local grocery store can keep track of its expenses. Accounting software for large businesses can help keep tabs on their inventory levels, manage vendors and take care of their purchase orders as well as keep track of time and invoice billable hours. All in all, deploying an accounting software would sort out a lot of things and make life a hell of a lot easier. Say goodbye to month end late nights! Hurray!
Why You Need Accounting Software?
Number crunching is the first step when it comes to making sense of your financial data. This is where an accounting solution comes into the picture. Accounting software gives numbers meaning, so you can decide whether you need to cut down on expenses or start pumping up investments. By using an accounting software solution, you’d have a clearer overview of your present financial state. This, in turn, would help you devise strategies to steer your business to new heights by allocating resources prudently.
In addition, through the magic of innovation, you can program your accounting software to send recurring invoices, alerts and notifications, helping you save time. You can effortlessly execute accounts reconciliation by matching transactions. Have to submit quotes or estimates? Go for accounting solutions which can convert those documents to invoices in a few clicks. Reorder products when your inventory levels drop below a set threshold by generating purchase orders automatically. Basically, you can automate a great many tasks with an effective accounting software.
Modules in Best Business Accounting Software Solutions
– An integral part of any accounting software, the payroll management
module lets you process employee payroll, expenses and reimbursements due to them. This module also helps in preparation and printing of cheques while taking care of all legal and tax obligations.
– The main purpose of an inventory management module is to keep track of your stock levels. You can sort out issues related to procurement, availability and movement of your goods. Also, you can keep a close eye on your inventory to avoid overstocking or understocking.
– This is a customised module found in top accounting software used primarily by project management and deployment teams. Herein, both costs and applicable rules differ from one project to another. It helps in making project estimates concerning overheads and costs pertaining to labour, material, and equipment.
Fixed Asset Management
– This module helps in the management of company’s financial data related to fixed assets in a more accurate and precise fashion. It helps in taking care of audit history, cost records, depreciation calculation, resource allocation, etc.
Billing & Invoicing
– An integral module of any accounting ERP software, billing & invoicing helps automate several routine tasks. From cheque writing and bookkeeping to advanced double-entry apps, billing & invoicing
helps eliminate manual data entry. It also ensures that your accounting figures are exact and accurate.
– An essential module of any accounting software, tax management assists in carrying out tax calculations automatically, along with tax reporting and integration of multiple tax rates. You can easily collect tax information from all financial documents into one single repository to generate reports necessary for tax filing.
– For the layman, accounts receivable refers to the money owed by customers to the business. The accounts receivable module assists in managing customer invoices and processing of customer payments. This module is chiefly used to create bills or invoices for customers. You can also keep tab on individual deposits to bank accounts so that deposit information can be uploaded and applied to customer accounts automatically. This module’s master files contain information related to the customer, including name, address and phone number. It also shows the amount due to a business along with the length of time the customer’s balance has been outstanding.
Accounts payable refers to the money owed by a business to its vendors. With the accounts payable module, you can track money due to vendors, discounts, and payment terms for all invoices. You can also print cheques directly to vendors. In addition, you can find master files containing vendor information, including name, address and phone number.
General Ledger –
The central repository of the accounting records and data, t
he general ledger module acts as the command centre for accounting information. Herein, you receive entries from other modules, such as accounts payable, accounts receivable and payroll modules. Without the general ledger, you won’t be able to create vital financial documents, such as trial balance, balance sheet and profit and loss statement. This module is used to record financial transactions not recorded in other accounting software modules. It helps create a trail of information needed for audit purposes.
Features in Best Accounting Software in India
– This is the big one. The raison d'être of an accounting solution. Accounting itself! It’s the benchmark when it comes to choosing an accounting software and pulling the trigger. Your priority should be to look for a flexible and reliable solution that can take care of the myriad accounting tasks with ease. Tasks such as maintaining ledger, accounts payable & receivables, bank reconciliation, your assets (fixed and variable) as well as liabilities. Of course, top accounting software offer more bells and whistles compared to the run of the mill versions, so go for one which won’t leave a hole in your pocket.
– This particular module helps you file GST returns seamlessly by pushing transactions directly into the GST portal. Make your business GST compliant by preparing and filing GSTR-1, GSTR-2, GSTR-3 and GSTR-4 returns online effortlessly.
— Through the debt collection module, you can keep track of whether the overdue bills have been collected or not. You can also quickly identify and resolve issues which may be affecting the debt collection process.
Budgeting and Forecasting
– So, you’ve crunched your numbers for the current year and balanced the books, crossed your T’s and dotted the I’s, now what? You’ve got to assess the financial performance so that you can set a budget for the next year. Based on your budget, you can establish estimates sales targets (both realistic and challenging) with the help of an accounting solution
Advantages of Top Accounting ERP Software
: The major benefit of an accounting software is that it enables even the non-accountants among us to crunch numbers to make sense of them. You can perform automated calculations putting you firmly in the driver’s seat. You don’t require any special training to execute the entirety of your accounting operations. And you get to do it in compliance with the legal standards of your state/country through the convenience of your mobile device. What’s more, you don’t have to hire an accountant’s services, thereby, saving you cost.
– Most top accounting software offer mobile app functionality to help take care of your needs on the go. These solutions are easy on the pocket and nowadays offer native Android and iOS apps for their users. This accounting software are high on operability, and in some cases, even match the desktop version of the solution.
– By migrating your financial data to an accounting ERP software, you can automate and streamline your mundane everyday tasks. Tasks such as collection, organising, and analysis of your most sensitive data becomes a breezy affair. This is turn helps you invest your money in areas where it can be better utilised.
Ease of tax compliance
: Accounting software helps adhere to tax regulations of the land. The tax rules can be pre-set and are taken care of by the vendors whenever an update happens. It also acts as a source of information pertaining to audit and tax making your job easier. All you have to do is take it out for a run and sit back while the accounting system does the work for you.
– Basically go for an accounting solution that fits your budget. If a barebones system can do the trick for your business, that’s the one you should choose. If you want the whole bells and whistles (accounts receivables/payables, project accounting, fixed asset management), then that should be your top pick. There’s a caveat though. It’ll be heavier on the pocket.
: So, you’ve crunched the numbers and made sense out of your financial data. What next? Well, you’d have realised by now that analysing the different financial performance patterns and trends would take a while without a solid system. To give meaning to numbers you need to deploy a top accounting solution. It’ll assist you in situations where you’ll need to cut expenses or where you’ll be making investments. This will help give a clear view of your present financial scenario helping you devise innovative strategies to funnel resources in the right direction.
: For any accounting software, protection of the organisation’s financial data is of utmost priority. This information is considered critical and must be prevented from falling into wrong hands. This is where an accounting solution comes in handy, helping you keep your data secure either through maintaining a backup copy or having multiple security clearance levels for access to sensitive data.
– Buying a business accounting software is just the tip of the iceberg. You’ve got to test their support function to assess whether their service is up to the mark or not. Most accounting software vendors promise to deliver quality, quick and reliable support. But promise is one thing, and fulfilling it is another. So, we’d advise you to test their support in advance.
– Have you heard the phrase, no shoe fits all feet? It’s the same case with accounting systems and businesses. Try as you might to find ‘one-size-fits-all’ accounting information system, you won’t be able to. There’s a very simple reason for this. Each company follows specific finance calculations
and observes a distinct set of rules. Find a scalable accounting solution that fits your requirements like a glove and it can grow in line with your business as your operations expand.
Ease of use –
Usability is an important parameter when it comes to choosing which accounting software to go for.
Since, accounting procedures and calculations, are not a piece of cake, it helps to have an intuitive solution where information is arranged neatly on a single dashboard. Once you get the hang of it, you should easily be able to run your tasks by following a navigation pattern you’ve learned.
: Which business doesn’t like to save a few bucks on the side, huh? Most business accounting software help you do just that! By automating administrative tasks and core calculations, you won’t have to devote valuable resources or outsource finance management to a financial expert.
Q. Do I need to purchase new IT infrastructure to use accounting management software?
A. No, you don’t have to. You simply need a computer device whether it may be tablet, mobile, laptop or desktop with a good internet connectivity and you’re good to go.
Q. My company has 25 employees. Do I still need to buy accounting management software?
A. First of all, you won’t need to hire an accountant specially for running your accounting software. Let’s debunk that myth straight off the bat. Now, if you accidentally fudged up the company accounts, accounting management is what you’re looking for. Tearing your hair out because you can’t tally your accounts? The general ledger module will help you out. So, pick one accounting software and get set to roll!
Q. Which makes more sense? On-premise software or cloud accounting software?
A. On-premise is best suited for companies having their own IT team and dedicated infrastructure for IT applications. On the other hand, cloud accounting software is ideal for firms who do not have a dedicated IT resource team. Plus, on-premise accounting software requires considerable investment vis-à-vis license purchase, annual maintenance cost, etc. Cloud accounting software
also offers you the freedom to pay on a monthly/yearly basis. So, you’re free to pick your poison.
Q. Do I need to shell out any annual maintenance fee?
A. Annual maintenance fees is applicable only for on-premise software licences purchased by the company. If you’re paying subscription fees for cloud accounting software, you do not have to pay annual subscription fees on them.
Q. Accounting software have multiple modules. But I don’t need all of them. Can modules be purchased separately?
A. Yes, you can purchase modules as per your company requirements. If your primary need is to tally your accounts, choose general ledger module. Keep track of company cash reserves with accounts payable/receivable module. Basically, you can pick and choose which module you want and build from there or buy the full accounting software complete with all the works!
Buyer's Guide for Top Accounting Management Software
If you’re looking to buy accounting software, there are certain criteria which you may need to evaluate first before taking the leap. Let’s find out what you need to keep in mind before investing in an accounting management solution:
The first step on your journey to buy accounting software is assessment of your need. Whether you really need it or not. Do you want a core accounting solution that takes care of your major finance accounting tasks like salary processing, and leave and expense management? Do you need an accounting software to execute your payroll needs seamlessly? Or you require a customised accounting software solution that helps you take care of employees’ tax declarations and filings?
After you’ve performed the internal assessment, you’ve to choose the best accounting software in India according to your defined needs from a list of available accounting software.
The beauty of accounting software in India which are currently available is that you have several options to choose from. Options which are available at different price models. If you’re a heavy hitter, you can go for an on-premise accounting solution. If you’re working on a limited budget, you can take a monthly/yearly subscription. You also have the option of ‘pay per use’ where you pay as per the amount of bandwidth you utilise.
Check if the accounting software in India offer free demos or trial version. This is especially useful if you don’t want to make a significant investment without having a look at the software first. Find out from the list of accounting software whether it fits the bill and offers the features/modules you’re looking for. After going through the demo, evaluate if you’re comfortable and willing to take the plunge.
UX plays an important role when it comes to choosing an accounting software solution. The design aesthetic of the system, how pleasing it is on the eye, its user-friendliness can swing the buyer’s decision. A comprehensive accounting software overflowing with modules, will not overwhelm the user if its backed by a clean interface.
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