Accounting and Finance Software

Financial software is any kind of computer application used by organizations or individuals to manage their business ledger and finances along with other accounting requirements. These applications are designed to classify expenses and income, track monetary accounts, pay bills online, track transactions between credit card firms and banks, generate tax-related and financial reports, analyze and track investments, work with budgets, and also meet compliance-related requirements. In addition to this, these software solutions also offer automation and management of end-to-end general accounting procedures, support for worldwide financial processes, planning and forecasting, cash flow management and tracking, and advanced reporting and analysis.

In short, financial software offers business owners an insight into the state of finances in their organization and allows them to make informed business decisions.

Accounting software is an application that is used by business owners or accounting professionals to manage accounts and process accounting transactions. These accounting software solutions are used by small and medium-sized businesses, as well as large corporations and businesses too.

Even though there are various features provided by accounting software solutions, ideal accounting software must possess the following essential features:

• Financial Reporting: This feature offers a graphical format of an organizations’ financial information, which includes external financial statements, balance sheet (statement of financial position), income statement (profit and loss report), statement of changes in equity (statement of retained earnings), and cash flow statement.
• Expense tracking: This feature maintains and tracks records of all the expenses taken in an organization. Expense tracking on a regular basis offers the most up-to-date financial information about an organization. Most solutions allow users to provide expenses by uploading bills with the help of a smartphone app.
• Billing and Invoicing: This feature allows you to eliminate manual data entry, automate your routine tasks, and make sure your accounting figures are accurate with precise transaction records in an account to help companies to auto-match banking and accounting records.
• Project Tracking: It shows all the financial activities involved in a project such as client payments, billable hours, expenses, and incurred costs, among others. This feature is helpful for the client project to manage all the financial aspects.
• Bank Reconciliation: As the name suggests, this feature helps to match the balances in an organization’s accounting records to the corresponding information on a bank statement. By utilizing it, the businesses can avoid bounced checks, an overdrawn bank account, and overdraft fees.
• General Ledger: This feature is the central hub for accounting information, receiving data from different modules, such as accounts payable, accounts receivable, and payroll modules. The feature offers a balance sheet, trial balance, and profit & loss statement, and is also used to track financial transactions not recorded in other modules.

With a wide range of solutions in the market, accounting software can be divided into three main categories based on the following factors:

1. Deployment
2. Size of Business
3. Functions

Let us have a detailed overview of each of these individual categories.

Based on deployment, accounting software solutions can be segmented into on-premise, cloud-based, and hybrid solutions. Let us have a deeper dive into each category.

• On-Premise Accounting Software: On-premise accounting software solutions work offline. They are installed on your system and can be accessed only on the device. One of the major advantages of using on-premise accounting software is that they offer the utmost security since they work offline. Moreover, they have many useful features and do not need access to the Internet.
• Cloud Accounting Software: These are online applications that transfer data to the cloud, where it is processed and transferred back to users. These solutions are preferred by SMEs due to their features such as ease-of-use, scalability, and cost-effectiveness. To add more to the list, these solutions can be used on your computer or any device, with an Internet connection. Cloud accounting software solutions are preferred by many users because it doesn’t require downloading and maintaining the software on individual PCs. Unlike on-premise solutions, these applications can be accessed by and shared with any user, anytime, and anywhere.
• Hybrid Accounting Software: With technology advancements, software vendors are offering innovative accounting software solutions without creating a deep hole in the pocket. Hybrid accounting software incorporates the familiarity of the desktop with the benefits of the cloud. These accounting solutions work by merging both private and public cloud infrastructures, offering greater flexibility for organizations that are looking for hosting resources. They also offer the ability to use classified applications privately while maintaining IaaS and SaaS on a public cloud. Here are some benefits offered by hybrid accounting solutions:
  • Helps in avoiding downtime (even during disasters)
  • Helps in gaining a competitive edge
  • Offers enhanced security

Depending on the size of the business, accounting software solutions can be divided into

entry-level accounting software, personal accounting software, commercial accounting software, enterprise accounting software, SaaS accounting software, and custom accounting software. Let us have a clear idea of the above-mentioned solutions.

• Entry-Level Accounting Software: Entry-level accounting software (also referred to as spreadsheet or single entry software) is the simplest and most affordable of all types of accounting software. As the name suggests, it is preferred by businesses that have low financial activities. This software helps in data organization by allowing you to place the data in rows and columns neatly and easily. It also helps small businesses record every transaction as a line item in a ledger.
• Personal Accounting Software: Personal accounting software is suitable for start-ups and small businesses. With the help of such software solutions, you can eliminate the need for manually balancing your checkbook or entering draft amounts. This software helps you in managing your investments and assets such as mutual funds, fixed deposits, and so on easily. In addition to this, it also automates the process of tracking big transactions, thereby easing the process of finances management.
• Commercial Accounting Software: Commercial accounting software is developed particularly for SMEs. This software comes with a wide range of features that creates comprehensive financial reports automatically. Moreover, the software automatically summarizes the data to show an organization’s financial status. It also has a strong error detection mechanism to get rid of any inaccurate data entry. Last, but not the least, these solutions can be easily tailored as per the needs of any organization.
• Enterprise Accounting Software: If you are looking for a tool to manage complex operations of bigger companies, then enterprise accounting software is your ultimate answer. This type of software solution has more robust and advanced features. In addition to this,

Since the software is used by big companies they offer advanced features such as:

• Budgeting and forecasting
• Fixed asset
• Inventory management

Besides this, it provides different modules to help businesses enhance their workflow processes. Moreover, enterprise accounting solutions also generate a graphical representation of business intelligence metrics, thereby allowing the accounting department to analyze financial data whenever needed.

• SaaS Accounting software: SaaS (Software as a service) accounting software are applications provided and hosted by third-party via the Internet. It is nothing but using the software on a lease for accounting services. SaaS accounting platforms are becoming a more and more popular choice for SMEs, who seek to reduce their overhead expenses. The cost of software and hardware licenses is low due to the shared environment and subscription-based nature of models.
• Custom Accounting Software: As the name suggests, this software is designed for organizations that need tailor-made accounting software to suffice their specific accounting needs. Companies that want to customize their invoices, report formats, and data fields normally opt for custom accounting solutions. The price of this software varies as per the number of users supported; the customized features included; and support, maintenance, and security services provided by the vendor.

Based on function, the accounting software solutions can be bifurcated into billing and invoicing systems, time and expense management systems, enterprise resource planning (ERP) systems, and payroll management systems. Let us explore more about individual systems.

• Billing and Invoicing: A billing and invoicing system is used to complete an organizations’ daily, basic tasks, which includes informing clients about their due payments and check writing. They are important to maintain the accuracy of accounting figures and make service seem credible and professional to the end beneficiary. On the other hand, billing and invoicing solutions help document commercial activity and prepare it for validation & authorization in an organization, thereby becoming one of the top accounting solutions.
• Time and Expense Management: Time and expense management solutions are developed to help approve expenses on-the-go and expedite billing cycles. These solutions are configurable for any organization’s requirements. The main purpose of their existence is to assist detect ineffective and slow practices (that were earlier not visible) and collect payments faster. Their key feature is being capable of creating detailed graphical reports on how resources and time are being utilized in an organization.
• Enterprise Resource Planning (ERP): This type of accounting software is one of the most essential since it merges all systems used for material purchasing, product planning, finance, distribution, inventory management and control, marketing, accounting, and HR. Many latest ERP solutions also provide modules for business intelligence and CRM that can be exploited by the organization to minimize their losses. Besides this, these solutions also offer industry-specific modules as per the organization’s needs.

Payroll Management: Payroll management solutions are used to maintain account receivables and account payables. These apps were designed to perform various tasks, comprising calculating salaries of employees, depositing the salary directly into bank accounts of staff members, creating payslips and tax forms, cutting deductions, and so on. In due course, these apps help cut down expenses, secure financial transactions, and assist in creating detailed reports.

While accounting software solutions have made some aspects of accounting easier for many organizations, many are still prone to some minor and major accounting issues. Accounting issues can vary from misplaced financial records to fraud & errors and more. Also, over-reported profit, inaccurate books, and several other accounting errors can cause an organization to lose sight of its financial wellbeing. Leaving such issues uncorrected and unattended can have long-term consequences and can also cause an organization to go out of business. It’s best to know about such accounting issues so you know what not to do. Below are some issues faced by most enterprises when dealing with accounting software:

• No 24x7 Technical Support: Customers have to wait for a few business days before they get a solution for their accounting software issues. Most technical support employees are only available during business hours; unless they offer customers with their contact number.
• Lack of Features: Most of the accounting solutions provide fewer features that too at a gigantic cost. Customers always either have to get the updated versions or shell out extra bucks to get the features they need.
• Software compatibility: Many customers are annoyed since their accounting software is not compatible with their systems. For instance, a customer might not be able to import some date simply because the software does not run on a specific operating system. Users cannot perform certain features because their accounting software is not compatible with the operating system on which the PC runs.
• Lack of Security: Online customers are worried about the security of their data as it is accessible by third-parties. Even though firewalls are believed to overcome this issue, the firewall set up on a system might go down at times. And there is nothing much customers can do when this happens.

Stressful Support Via Phone Call: The best support can always be provided via a face-to-face conversation instead of just phone calls. In this way, customers can get a better idea of what is happening and what measures to take if the issue surfaces again. The ability of a technical support employee to access customers’ data and solve their issues by physically being present is less stressful and much more effective as compared to simply trying to solve the issue via phone calls. This feature seems to be missing in most of the accounting solutions.

The achievement of any organization is dependent on how strong it’s accounting and financial software is. Hence, such software must have the best features that are beneficial and useful to the organization. With the right features, the internal process flow in the accounting and finance department of an organization becomes easier to handle. Here is the list of the features that must be present in an ideal accounting software.

• Security: Security is of utmost importance in this when most businesses are operating online. Financial information is sensitive in nature and should never fall in the hands of bad actors. Taking this into consideration, an ideal accounting software must offer strong and complete security features. Moreover, buying the software from a dependable vendor—one that has a solid reputation—must also be taken into consideration.
• User-friendliness: Even though accounting and finance apps are developed for any user, it’s still crucial to ensure that the one you select is intuitive, user-friendly, and can be used by any of your team members—even those who do not have any technical background. Besides this, your selection should be highly functional and flexible. It is suggested to choose a software that has multi-dimensional reporting abilities. In this way, your team can generate reports that are tailored as per the needs and targets of your company.
• Easy to Communicate: One of the most essential features of any accounting software is that it must simplify the communication between the organization, its banks, customers, and all stakeholders. Managing and monitoring credit; tracking due dates and payments with customers and suppliers; and documenting and checking bank statements, accounts, and balances are all important features that must be present in an ideal accounting and financial software.
• Automation: Gone are the days when making invoices and financial data was a manual task. These jobs, when done manually, are extremely time-consuming. In today’s world, the best accounting software comes with automatically formulated invoices and reports that you can print effortlessly. This ultimately helps in working quickly and in a much-enhanced way instead of waiting for an accountant to fill in the data.
• Cloud Computing: Cloud computing gives access to multiple users and also guarantees data security. In addition to this, cloud computing is quicker as compared to desktop installations. Hence, having an accounting software that supports cloud computing is one of the best features that one can get.
• Scalability: Scalability is an important feature in accounting software given the future growth of an organization generated by maximized productivity and streamlined operational performance. Hence, an ideal accounting and finance software must be scalable enough to support the increasing financial requirements in the future. It must have the ability to handle the mounting volume of data and requirements of added users.

Having all these features in an accounting software ultimately makes it one of the best accounting software in the market.

Even though there are various benefits of accounting and finance software, here are some that make these solutions most-liked among different organizations and customers.

• Simplified Tax Compliance: In a recent study, it was found that most organizations in the US spend 175 hours on tax-related tasks. In other countries, they might even consume more than 400 hours. That is a lot of wasted days, which could have been utilized to create new products, lock in new customers, or improve existing services. With the tax planning features provided by various top accounting solutions, you can store invoices, receipts, and income statements in one convenient place. Some finance software solutions also allow for integrations that let you evaluate ITRs and adjust calculations as per new guidelines.
• Cost Saving: Accounting software makes most of the core calculations and administrative operations automatic. This results in taking control of the revenue structure so that companies will not need to outsource finance tasks to an external professional or freelancer. In addition to this, they also lower the costs associated with the distribution and printing of documents and storing of sensitive data in secure locations (for example, cloud computing).
• Simplifies Accounts: Offering power to the non-accounting-knowledge user base is one of the major benefits of accounting software solutions. They are developed to perform automated calculations and give meaning to the numbers. With little to spend on training costs, these solutions allow business owners to obey legal protocols with simplicity and ease, as well as complete all accounting operations hassle-free.
• Improved Accuracy: Having a precise record of finances is essential to monitor the development of any organization. With the help of accounting solutions, you can simplify accounting aspects that might be prone to errors. Many accounting software can automatically make calculations as you enter data, adjust assets, and transfer funds. They also analyze data, thereby lowering the odds of mistakes. Besides this, if you need to verify your record for errors, you can simply find them and amend before finalizing the reports.
• Synchronized Files: As an organization grows, the amount of accounting that needs to be conducted and the quantity of paperwork that needs to be tracked increases exponentially and turns complicated. With the help of accounting and financial software, you can access the data you require across different platforms and go through computerized information without any trouble. In addition, data migration is made simple since accounting solutions make synchronization of offline as well as online databases possible. This helps many organizations that are flourishing at a phenomenal pace.

With its wide range of advantages, accounting and finance software solutions are used in different industries all over the world. Here is the list of industries where these software solutions play a major role.

• BFSI Industry: The BFSI (banking, financial services, and insurance) industry is one of the primary users of accounting and finance software. Since the industry majorly deals with numbers, this software is one of the top accounting solutions in BFSI sector and delivers an entire spectrum of agile finance and banking solutions and services. These service-enabled accounting solutions help in transforming banking and financial service agencies into modern businesses, which adapt to accommodate upcoming or new business processes and grow easily. Furthermore, these solutions also provide benefits such as:
  • 24x7 Database
  • Live Operation Tracking
  • Secure Transaction
  • Investigation and Evaluation

Hence, accounting and finance software solutions have a lion’s share in the development of BFSI industry.

• Logistics and Transportation Industry: Gone are the days when truck companies were dependent on spreadsheets, ledgers, and file drawers to manage their fleet operations. With the advent of accounting software in logistics and transportation industry, companies can streamline their operations into one easy-to-use system, thereby saving time, measuring performance, and making strategic decisions. Accounting software in the logistics and transportation industry offers benefits such as:
  • Dispatch Management
  • Driver Management
  • Maintenance Scheduling and Tracking
  • Tracking of Fuel Taxes
  • Smoother Payment Process
  • Cost-Benefit Analysis
  • Customer Relationship Management

Therefore, these software solutions have a vital role in the logistics and transportation industry to simplify and automate things as much as possible.

• Telecommunication Industry: Telecommunication companies deal with different challenges to increase profitability in an extremely unstable marketplace. Hence, accounting software solutions help in reducing these challenges as much as possible. These solutions can be integrated with telecom management software to ease some processes. Moreover, they also provide the following advantages:
  • Fast, Reliable and Efficient Process Execution
  • Compliance with Different Telecom Regulations
  • Tailored Solutions
  • Increased Service Quality
  • Improved Operational Performance

All these features are sufficient for the telecom industry to exploit windows of opportunities.

• Building and Construction Industry: Accounting in building and construction industry is unique. The software manages complex payrolls and tracks detailed costs by job, among other things. These software solutions offer sophisticated features for equipment management, job costing, subcontracting, and other financial management processes. They are designed around a job costing module, which lets the finance team to allocate job costs by CSI code. Moreover, different common modules supported by these solutions are:
  • Equipment Tracking
  • Fixed Asset Accounting
  • Contract Management
  • Inventory Management
  • Time Tracking

Benefits offered by such solutions include:

• Improved Visibility
• Better Estimates
• Fewer Errors
• Less Double Entry of Data

Hence, accounting software in building and construction industry plays an important role in understanding this complicated marketplace.

• Healthcare and Medical Industry: The healthcare and medical industry is one of the complex industries where product development requires many resources and takes years. It is also necessary to comply with numerous regulations. Moreover, end-users often rely on such products to improve and sustain their life. Hence, accounting software in this industry plays a noteworthy role to bring each area of the business together and meet the unwavering, unique demands of the marketplace. Different perks offered by these solutions in the industry are:
  • Inventory and Materials Management
  • Distribution Management
  • Sales and Marketing Management
  • Regulatory Compliance
  • Document Management

• Food & Beverages Industry: Since food is one of the basic amenities needed for mankind to survive, accounting software in food & beverage industry is of utmost importance. Using these solutions, manufacturers can simply track their expenses and get notified about the stock in the warehouse. This helps the companies to get better and maintain a faster production process with the updates in hand. Here are some more advantages offered by accounting software in this industry.
  • Recipe Management
  • Project Management
  • Invoicing
  • Expense Management
  • Bulk Messaging
  • Mobile Application

• Hospitality Industry: Accounting software in hospitality industry is designed to focus on driving revenue, offering customer satisfaction, and reducing operational costs. These software solutions are used for financial management by multi-property resorts, clubs, hotels, entertainment venues, restaurant chains, and all other hospitality businesses. Different perks offered by accounting software in this industry are:
  • Automation and Accuracy
  • Access from Anywhere
  • Real-time Information
  • Ease of Use
  • Speed and Efficiency
  • Time and Cost Saving
  • Revenue Enhancement
  • Business Insights

Hence, accounting in hospitality industry is no more a cumbersome process with these software solutions.

• Automotive Industry: Automotive industry needs accounting software to overcome challenges such as marketing, labor efficiency, and inventory and delivery management. These solutions help a company to ease processes such as assembly, procurement, testing, and delivery. Here are some advantages offered by accounting software in this industry:
  • Finance Management System
  • Electronic Document Database
  • Inventory Management
  • Integration with Communication Modules
  • Service Management
  • Order Management
  • Sales Management

Therefore, accounting software in automotive industry is essential to boost organizational productivity and reduce incompetence.

• Travel and Tourism Industry: The software in travel and tourism industry allows a travel agency to manage finances with ease so that it has more time to focus on clients. These software solutions offer features that allow adding discounts; requesting commissions, retainers, or annual fees; automating late payment reminders; and setting up payment schedules. Moreover, they also support multiple currencies and languages. Here some more benefits that are offered by these solutions:
  • Secure Online Payment
  • Create Invoices with Ease
  • Notification Alert
  • Organize Tourist Database
  • Manage Travel Expenses
  • Track Profit & Loss

• Electronics and Electrical Industry: Accounting in electronics and electrical industry makes GST billing and filing an easy job. It helps manage your accounts, generate invoices easily, track inventory accurately, reconcile bank transactions, and file tax returns effortlessly. Here are some more advantages offered by accounting software in the industry:
  • Easy & Fast Billing
  • Auto-Bank Reconciliation
  • Inventory Management
  • Reporting
  • Import Purchase
  • Expiry Management
  • Quality Assurance
  • Sales and Distribution
  • Production Planning and Control

Since the world is adapting to new technologies every day, here are some trends that are making their way into accounting and finance software solutions.

• Increasing Demand for Cloud Accounting: As per a study by Forbes, cloud-based software improves capital utilization by 75%, lowers labor costs by almost 50%, and reduces provisioning from weeks to minutes. Also, most accountants choose cloud-based software over on-premise software. Hence, several companies have begun using cloud accounting software due to its quick implementation time and low upfront costs.
• Stress on Customer Support: With users facing issues while installing software and solving any errors, many software providers had shifted their focus on virtually providing the required assistance. Hence, software providers are now offering implementation, configuration, and management support by virtually assigning a specialist to users. This guarantees better customer satisfaction as well.
• Integration of Business Intelligence Tools: With accounting software capable of supporting different modules, companies are now integrating business intelligence tools to drive business profitability. This integration results in the conversion of raw data into meaningful information to make strategic decisions. Companies are using accounting software not only for general purposes but also for getting useful information to drive business growth.
• Shift to Mobile Applications: Smartphones are not only restricted to make phone calls, rather users have been using them to streamline their everyday tasks and activities. Hence, software providers are also getting onboard and launching different mobile versions of their accounting software compatible with mobile operating systems such as Android and iOS. This helps the software to reach a wider user base without any extra efforts.
• Automation and AI: As per a study by Forbes, labor-intensive tasks such as audits, tax preparation, and banking will be automated completely by the end of 2020. This is a trend that is believed to be one of the greatest changes in the accounting industry. Many software makers are brainstorming on adding such features to their software. Moreover, 87% of finance professionals and accountants feel that accounting can be performed in a better way with the help of AI, as per a PwC study.
• Blockchain: Blockchain is another technology that has the potential to revolutionize the way we initiate fund transfer. This technology also has the potential to improve the accounting tasks by reconciling ledgers and reducing the costs of maintenance, as well as providing absolute certainty over the history and ownership of assets. The technology is also capable to record and store assets, transactions, liabilities, and provides different methods to record cash flow.

Accounting software eventually has become an essential tool to manage financial activities. They have made a huge difference in the way companies manage their inventory tracking, bookkeeping, payroll tasks, and budgeting. Hence, with different options provided by these solutions, one of the options (though confusing) to look upon is the price. Accounting software cost might vary according to the different features provided by them. Some may come free of cost while others may be expensive. Normally, an accounting software must cost in the range of $4–999, depending on the features it offers. This cost is further segmented into different pricing plans such as:

• Free: Many accounting solutions do not have any charge associated with them. These solutions offer basic features and hence the reason why they are free of cost. If you are looking for features such as basic account management and invoice management, then such solutions are the right choice for you.
• Monthly or Annual Subscription: This pricing plan applies to cloud or SaaS accounting solutions, which offer you a pay-as-you-go option. As a result, many organizations feel it simpler to stay in the budget when it comes to investing in accounting programs. These solutions also offer a free trial of 2–4 weeks. Hence, if you feel a particular software is not fit for you, you always have the option to switch to a new one.
• Freemium: Freemium is a pricing plan where you get the software for free but need to pay extra for using premium features. This is an ideal plan for businesses that are searching for software developed for a low-tier application.

WareBuy is the industry’s first dedicated marketplace for buying and selling packaged software solutions and services. Buying software will be easy since the platform offers different benefits such as:

• Secured payment
• Multiple options for software
• Price Transparency; hence, no additional or hidden costs are added to the cart.
• 24/7 customer support
• Saves time
• Worldwide delivery
• Competitive pricing
• Shop by category (such as industry or skillset)
• Buy products from renowned brands

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How an Accounting Software Can Add Value to Your Business?

Accounting software helps businesses to maintain accurate financial records and perform accounts and finance-related tasks such as creating quotes and estimates, creating and sending invoices, completing tax returns, recording expenses, creating budgets and forecasts, and checking cash flow or profit and loss.

Do we need to have knowledge about accounting to use accounting software?

Ideal accounting software will make your accounts easier and more accessible to understand. If all financial data of your company is currently maintained in Excel spreadsheets or on paper, you may find that accounting software assists you spot opportunities, identify trends, and give you confidence that you understand where your company stands. However, you do still require some basic know-how to use it. If you enter inaccurate data, you will get inaccurate information and figures out.

Do you think accounting software is needed for my business?

It is possible to manage your finances using paper or with the help of spreadsheets. On the other hand, unless you manage a very low number of transactions monthly, accounting software will almost surely make you more efficient. If you're just a new startup, the need for using accounting software might seem less compelling. On the other hand, it is simpler to get used to accounting solutions if you have it from the beginning. As your business develops, you can be confident in moving forward while using accounting solutions.

How can I verify accounting software will be right for the long-term?

When selecting your accounting software, consider future plans for your company and whether the application will be capable of supporting them. It can also be a good decision to look for a package that offers you the choice to add new features as the business grows. Most cloud-based packages let you to upgrade immediately, by just selecting your new package. There are different packages that also provide plug-ins or add-ons that can offer additional capabilities and features.

Is free accounting software worth using?

Free accounting software can be sufficient if your organization only requires to perform basic tasks. If it does not offer the features you require, then it would be of no use. When using free accounting software, make sure it is provided by a reputable and established vendor.

Can accounting software replace our accountant?

Even though accounting software can automate some of your accountant’s tasks, which he/she currently handles, it is not developed to substitute your accountant altogether. It is best to think of accounting software as a method to make a relationship with your accountant more efficient, more effective, and stronger. As the software is capable of handling jobs such as generating profit and loss charts and tracking expenses, your accountant can invest more time offering advice to help you make decisions by analyzing your figures.