Whether you are a new or well established business, maintaining your accounts can be a challenging job for any business. When it comes to accounts, many businesses entrust everything to an account. However by using an accounting software package as well you can save money and time that could be spent productively on other aspects of your business.
Choosing the right package however to do this job can often appear to be a difficult task and not all businesses will benefit from having accounting software. For those businesses that do benefit, having accounting software makes your accounts process very simple.
The detailed requirements that you will need within your accounts package depends on the type of business you have and how you run it. When choosing the right accounting software for your business it involves you deciding on your requirements and then looking for an accounts package that can meet all your overall and detailed requirements. The requirements that each accounting software have all vary, which is why it is important to consider what you will want out of your accounting software package. Some of the requirements that you may want from your accounting software include the following:
o Basic bookkeeping – this will document all your sales and purchasing as well as invoicing
o VAT calculations – allows you to keep track of VAT and to calculate your VAT
o Payroll processing – you should consider this as part of your accounting software if you have more than three employees. The payroll function calculates PAYE (pay as you earn) as well as your weekly/monthly National Insurance contributions.
o Production of management information and decision support – important if you need to prepare internal management reports periodically.
o Invoicing – every accounting software package should provide an invoicing function. Most provide an option of tailoring your invoices to your desired appearance.
o Credit control – this option highlights where customers have exceeded their limits and provides statements to chase them.
o Compatibility – you should think about whether your chosen accounting software is compatible with any other accounting systems, including the one that is used by your accountant.
o Stock control – if your business sells products then stock control is an important function to ensure that you have enough products in stock and so that you know what has been sold.
Accounting Software is application software that records and processes accounting transactions. Most accounting software packages consist of various modules/sections. The main core modules of most accounting software packages are as follows:
o Accounts receivable – this aspect of accounting software deals with the billing of customers for the use of products or services. It is where the company enters that money has been received.
o Accounts payable – this part of your accounting software is used when you receive an invoice. You add the invoice to this file and remove it when you have paid it. These invoices cover money that is owed to people such as suppliers.
o General ledger – this is the summary of all of the transactions that occur in the company. General
ledger can also be known as nominal ledger and is the main accounting record of a business.
o Billing – when a business invoices its clients/customers
o Stock/Inventory – it could be important to your business to keep track of all the material/stock that you have within your business. By having stock/inventory lists it allows your business to keep control of its inventory.
o Purchase Order – when your business orders inventory you will be sent a purchase order, which is a document stating the type, quantity and agreed price of the inventory.
o Sales Order – order received by a business from a customer. These sales orders are recorded so that a business knows how much inventory it has. These sales orders may be for a product or for a service.