Accounting software features for small businesses

Quick insights

• Accounting software can help businesses keep detailed, accurate financial records and manage expenses.
• The right accounting software for a particular business may depend on factors like the business’ size, industry, number of employees and number of clients.
• A few common accounting software features include invoicing, billing and payroll processing.

Manually reviewing details like bills, invoices and payroll can add up over time. Plus, there’s the added risk of human error. This is why many businesses of all sizes use accounting software for their bookkeeping needs.

While individual accounting software programs offer varying features, many of them can automate repetitive accounting tasks. Software may also be able to integrate different parts of the accounting process into one platform, so business owners can view financial details all in one place.

Read on to learn more about why accounting software can be beneficial for small businesses, features to consider before choosing software.

Benefits of accounting software for small businesses

Using software to manage business bookkeeping may allow financial stakeholders to automate repetitive tasks and avoid errors due to manual reporting. These automations can also save businesses time in the long run, allowing employees to focus on tasks to increase revenue or grow the business.

It can also be beneficial to have all your financial documents in one place. This could help streamline budgeting and forecasting. Some accounting software can also provide real-time business insights based on financial records.

Lastly, using accounting software can help support business scalability and growth. In addition to potential time savings via automation, this type of software provides options for businesses as they grow. For example, many accounting software programs allow business owners to add on features or select higher level plans down the line without moving to another platform.

Key accounting software features to look for

Before purchasing accounting software, business owners should identify which features they find important. A few common features include payroll processing and tax preparation.

However, it could be beneficial for businesses to consider integrated accounting software options. This type of software combines accounting tasks in a centralized platform. That way, businesses can take care of general bookkeeping, accounts payable/receivable, invoicing and more within the same platform.

Each business is different, so one may need all the above capabilities while another may not. For example, a freelancer with a handful of clients may not need accounting software that helps with payroll and inventory management.

Consider the common integrated accounting software features below that may help streamline or automate different accounting tasks:

Bookkeeping

While accounting and bookkeeping are similar, there are some key differences. Accounting is the process of interpreting and analyzing financial data. Bookkeeping, on the other hand, is the process of recording financial transactions for a business. Many accounting software options allow businesses to integrate the bookkeeping process for convenience.

Payroll

Accounting software doesn’t always necessarily have robust payroll features, but it may be able to integrate with external payroll software. Employee wages are often a large part of a company’s expenses, so it can be beneficial to view payroll details alongside other business expenses. This could provide a clearer picture of a company’s cash flow.

Expense tracking

Some accounting software also includes automated expense management features that may allow you to:

• Capture receipts
• Categorize expenses
• Add up totals
• Process expense reports

Keep in mind that your accounting software may not offer comprehensive expense management tools. Depending on the size of your business, it may be worth researching whether it would be worth investing in separate software for expense needs.

Billing and invoicing

Timely billing and invoicing may provide a clearer picture of a company’s cash flow. Because of this, keeping the billing and invoicing process streamlined can be useful for businesses. Some accounting software programs allow you to automate invoice creation, which could potentially save time and help you avoid manual errors.

Accounts payable and receivable

Accounts payable refers to money your company owes vendors. Accounts receivable refers to money your company earns from sales. Integrated accounting software may be able to analyze these details and provide useful insights. For example, the software program might identify cost-saving opportunities based on current cash flow.

Reconciliation

Reconciliation refers to the process of comparing your financial records to see if they match. For example, you may want to see if your bank statements match up with your bookkeeping records. This process could help you catch accounting mistakes and other errors.

Using accounting software to tackle reconciliation could potentially help businesses save time and avoid manual errors.

Vendor and inventory management

Accounting software may also be able to help businesses keep track of vendors and inventory. This may allow companies to keep a better eye on their supply chain overall, as integrated accounting software can often track current inventory, low inventory and any associated vendors.

Leveraging business credit cards for accounting tasks

In addition to using accounting software, companies may choose to apply for and use business credit cards to assist with accounting tasks, such as keeping track of purchases made with your card. Each Chase Ink business credit card, for example, can integrate with bookkeeping software to simplify accounting tasks. Additionally, Ink business credit cards provide access to details like quarterly reports and up to 24 months of statement details.

Business credit cards may also help simplify expense management tasks. Chase Ink credit cards allow primary cardmembers to issue employee credit cards at no additional cost and set individual spending limits.

In summary

Whether you’re a freelancer or a small business owner, you may benefit from the automation and potential time savings of accounting software. There are many accounting software options in the online finance space, but the right one for your business may not be the right one for another. It may be helpful to brainstorm exactly which features you need and test out software through a free trial or sales demo before purchasing.