Small businesses need accounting software if for no other reason than it presents a centralized data repository where they can keep all of their financial and tax-related information. When you need your financial data, it’s there. At tax time, having accounting software can save a small business tons of time and money, as well.
There are other things accounting software does for you, as we’ve talked about before. It can help you keep your finger on the pulse of your business, so you know how healthy it really is (or isn’t). Good accounting software, when used effectively, can help identify the most profitable aspects of your business and help you capitalize on them.
What kinds of things does accounting software do, on the micro level? It depends on the particular package you choose, of course. Here are some of those functions and features:
- General ledger. At the most basic level, accounting software keeps the books.
- Accounts receivable. It tracks who owes you money and how much.
- Accounts payable. The same goes for your own obligations.
- Inventory control. Some accounting software helps with inventory management.
- Order management. This is the ability to enter and track customer orders.
- Payroll. Most accounting packages give you a way to pay employees.
- Budgeting and reporting. Entering your business’ budget into the accounting software helps you to stay within that budget.
- CRM (Customer Relationship Management). Some accounting packages handle CRM, while others integrate with third-party CRM products.
- Spreadsheet integration. Most accounting packages have the ability to interface or export to products like Microsoft Excel.
- Business intelligence. This refers to the process of looking at business data (sales or production costs, for example) and making projections and decisions about what works best.
- Ecommerce. Some systems even integrate with your ecommerce package, keeping everything safe in one place.
Not every small business needs all of these functions, of course. The key is to understand which ones you do need, and then choose the accounting software that best fits those needs.