Keeping finances in order is an eternal headache for all small businesses. A good finance and accounting software can help you automate bookkeeping tasks and track all of your financial activities.
Some of the core functions that are present in all accounting software include the ability to manage accounts receivable, accounts payable, general ledger, invoicing, billing, and more. Within this, there are features such as automated reports, analytics tools and expense management.
But how can you be sure about what you need from an accounting solution? With so much to choose from, it can get confusing and overwhelming to decide upon a particular accounting software for your business. It is, therefore, important to understand every feature and what it stands for before making a buying decision.
Here's a compiled list and description of the basic and niche features of accounting software.
After educating yourself on these features go try out our accounting software scorecard tool, which recommends to you the best finance apps based on your company's specific needs in terms of features, pricing, and the devices you use.
|Accounts payable||Helps keep a track of the amount that a company owes to its suppliers and creditors.|
|Accounts receivable||Keeps a tab on the money that others owe to your company for goods or services offered.|
|Analysis and tracking||Allows you to evaluate, report, and analyze financial activities to help you keep track.|
|Cash management and expenses||Reconciles bank statements, check, and credit card transactions to help you track your finances.|
|Job management||Aids management of work performed on a particular project and prevents lost billable hours.|
|Integration||Integrates with various third-party apps and facilitates data synchronization with other solutions in your company's software stack.|
|Payroll||Tracks and helps in payroll process for employees. You can print checks, calculate tax, and get tax reports.|
|Permissions and security||Ensures protection against common risks for critical and confidential financial data. Also allows you to control access to information for users.|
Accounts payable software is used to deal with money owed by a company to vendors and creditors. Accounts payable within a bookkeeping software include summarizing amounts owed, handling partial payments and vendor credits, managing vendor terms, and taxes payable.
|Purchase order management||Right from the time of acquiring orders till the time of payments and delivery, you can track crucial information about vendor, purchases, item purchased, delivery, payment, product order histories, supplier requirements, and more.|
|Purchase orders||Lets you prepare, email and track purchase orders.|
|Sales orders||Processes sales orders for products and services, starting from order entry to invoicing. Important for organizations outside manufacturing/distribution (such as software companies) that need to process sales orders frequently.|
|Order processing||Manages the inputting of orders and preparation of invoices when orders are shipped.|
Accounts receivable functionality within accounting software can be a real stress-buster. It maintains a centralized and accurate record of pending payments for you so that you can send out timely reminders and get paid faster.
|Billing and invoicing||Handles invoice processing, including recurring billing, contract-based billing, and subscription billing.|
|Billing and invoicing||Connects to credit card accounts directly and makes card payment possible.|
|Customer accounts||Saves information about a customer including name, order data, billing information, and credit.|
|Electronic payments||Lets customers pay electronically directly from their bank accounts in a secure way and helps schedule transactions.|
|Recurring billing||Generates repeat invoices automatically, saving you from the time and effort required for repeat entries.|
|Sales tax management||Automatically updates applicable sales tax rates on invoices and helps you file sales tax returns accurately|
Analysis and tracking features let you not only monitor your company's current financial status, but also evaluate and foresee impact of financial activities that you've undertaken in the past or the ones you'd take in the future.
|Budgeting and forecasting||Helps budget planning by forecasting revenue, expenses, and cash flow and consolidating department-level budgets.|
|Business intelligence||Facilitates data analysis and collection, presentation, and distribution of business information.|
|Fixed asset management||Tracks location, quantity, condition, maintenance and depreciative value of fixed assets. Thus helps in terms of financial reporting, maintenance, and prevention of theft.|
|Inventory tracking||Helps in tracking orders, sales and deliveries to maintain optimal level of product supply, avoiding any kind of shortage and surplus.|
|Monitoring||Allows you to monitor revenues and helps to manage investments.|
Cash management features allow you to keep track of cash requirements, perform automatic bank reconciliations, and ensure that payments are delivered efficiently and securely. Expense management features help you ensure that employee-initiated expenses are managed effectively and processed in a timely fashion.
|Bank reconciliation||Records the account holder's information, ensuring that organization's own accounting records match the bank balance shown in the organization's bank statement.|
|Cash flow statement||Records the flow of money in and out of your business to prepare you for the future. Keeps you informed about debts and payments due for staff and suppliers.|
|Expense claims||Allows you to add receipts to record your expenses and submit them further to be reviewed by users.|
|Time and expense tracking||Enables you to track time spent on a particular task. You can track, submit, and approve all expenses to manage costs closely.|
If you are still making payments to your staff in a manual way, it can be a tedious and time consuming process. Payroll feature helps you save time with online tracking and managing of pay runs. It lets you print checks and get accurate tax calculation as well.
|Payroll management||Allows you to make direct payments to employees, update tax codes, manage employee attendance, and more. You can print checks, calculate tax and get tax reports.|
|Timesheet management||Records time spent on tasks for error-free calculation and complete accountability.|
General ledger and reporting is the spine of your accounting system. It keeps a thorough record of your business accounts online and helps balance all your accounts. General ledger and reporting features allow you to manage total expenses, calculate your income, get financial statements, and print and email reports whenever you need.
|Account reconciliation||Helps you match your business's records of financial accounts with those of banks' or any other financial institution. This feature ensures error-free transactions and prevents duplicate charges and fraudulent activity.|
|Activity dashboard||Shows the entire financial activity for your business, like budget summary, recent expenses, open invoices and more, in a comprehensive format.|
|Balance sheet||Summarizes the assets, liabilities, equity for your business at a given time without the need for manual calculations. Denotes the financial health of your business.|
|Customizable reporting||Lets you generate and export customized financial reports about profit-loss, sales tax, balance sheets, and more.|
|General ledger||Records business's financial transactions (like accounts payable, accounts receivable, equity, revenue, and expenses), used to prepare financial statements.|
|Profit/loss statement||Gives you complete profit and loss statement for your business, helping you identify trends and make financial predictions.|
Whether you're a one-person army or you have an army to lead, job management features help you manage the workflow for both and help you prioritize. As a result you can maximize the revenue of your business by scheduling better and utilizing your resources in the most optimum way.
|Collaboration tools||Allows stakeholders to collaborate with finance teams via the accounting software.|
|Project accounting||Tailored for project-oriented businesses. Tracks costs, project status and earned value for you to understand the profitability of the projects|
|Project budgeting||Helps in planning, managing, and controlling of costs and revenue to ensure that the project is completed in a specified budget. In some cases, it allows accountability of fixed and repetitive costs in projects.|
|Project tracking||Helps you track specific projects and see their progress over time.|
|Quote management||Enables the sales team to generate and send accurate quotes/invoices to customers; facilitates storage of these invoices as well.|
Security is one of the most critical concerns for business owners when it comes to their financial data. In certain countries, there are strict security requirements as per certain legal regulations. So, permissions and security feature should meet those and offer more control over confidentiality of information.
|Access control||Allows access to critical data with controlled permissions, only for authenticated users or groups.|
|Approval process control||Lets you create rules for different types of approvals that may be required to control access and permissions for particular financial information.|
|Audit trail||Traces every financial transaction from start to finish, detecting errors and potential fraudulent activity, and ensuring compliance.|
|Automatic backup||Backs up all your finance and accounting data automatically.|
|Multiple user accounts||Allows multiple users to use the tool at the same time. In some cases, every user is required to have a license while in others, multiple users can work on the software without having to pay extra.|
Accounting software integration features allow you to accentuate your accounting software's capability. The centralized data within your finance and accounting software can be synced with other apps to make financial processes simpler and more effective.
|API||Stands for Application Program Interface. Makes it possible for different applications to communicate with each other, helping your IT/development team integrate your finance tool with other third-party software.|
|Data import/export||Helps to transfer information to and from the accounting system easily. Should support a wide range of different file formats.|
|Email integration||Integrates the accounting software with your company email, directing accounting-related alerts to your inbox and improving communication.|
|Mobile integration||Allows you to access your key financial information from your mobile device via an app.|
|POS||Simplifies bookkeeping and accounting by facilitating real-time updates for inventory, accounts receivable/payable, and customer transactions.|
|Third-party integration||Includes custom integrations with other business software within your stack.|
There's a bunch of other tools you can find in an accounting software solution. Here are some other important features that you can expect to see:
|Custom fields||Allows you to create custom fields for storing data that does not fit into the standard fields available through the software.|
|Document storage||Facilitates storage of critical documents such as invoices, purchase orders, agreements and more, making all the information available for use in future.|
|Multi-company||Offers support for invoicing, tracking and consolidating financial data for multiple companies in case of multi-entity businesses.|
|Multi-currency||Lets you generate invoices and process payments in different currencies.|
|Multi-language||Allows you to operate the software in multiple languages.|
|Multi-location||Offers support for invoicing, tracking and other financial operations to businesses at multiple locations.|
Hopefully, this set of definitions of accounting software features has given you more of an idea of the features you need within your solution before you start shortlisting and testing apps. Here are some handy GetApp resources to help you with your accounting software selection:
Compare the top solutions in our Category Leaders ranking of accounting software.
Use our accounting software scorecard to identify the most suitable apps for your company based on your pricing and feature requirements.
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