When you have a small business, you need to make sure you have accounting software to go with it. Accounting software can help you stay organized, pay your bills, get paid, and limit your tax liability. To maximize your profits and make sure you’re staying up to date, it’s crucial that you have a great accounting software.
Here’s how to maximize your accounting software for your small business.
1. Know What Features You Want
The first important thing to remember is that you’re going to need certain features to manage your small business. As a small business, there are certain things that you’re almost certainly going to need to track with your accounting tools, and those are the features you want to make sure your bookkeeping software offers.
- Balance Sheets
A balance sheet is essentially a financial statement that keeps track of your company’s assets and liabilities. Your accounting software should be able to stay up to date with your company’s assets. This will help you deal with banks, manage any debt you have, keep an eye on how much your company is worth, and allows you to write off bad debt in QuickBooks.
- Creating and Sending Invoices
You have to get paid, and invoicing is one of the many ways you can do that. When you create an invoice, your clients will have a paper trail they can follow, your company will know the clients have an easy way to pay, and you’ll know when an invoice is over-due or hasn’t been paid for some time. Plus, many accounting software products allow you to accept credit cards directly as payment.
- Managing Expenses
Understanding your company’s profits isn’t necessarily as easy as knowing your cash inflow. You need to understand your expenses, which includes fixed costs like rent, moderately variable costs like hourly employees, and occasional expenses like yearly subscription fees. Bookkeeping software can help you understand profits, not just revenue.
- Cash Flow Management
A cash flow statement helps you understand how much money is going in and coming out. When you have more cash reserves, you may be able to afford new investments, whereas when you’re running low, you may need to focus on your core business. Understanding your cash flow is one of the most important parts of that.
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2. Know What Features Are Only Important for Certain Businesses
What about features that are extremely important for your business specifically? In some small businesses, there are certain things you may do that require specialized tools. You need to make sure that your accounting software is able to handle these parts of your business just as much as they do everything else.
- Inventory Management
If you’re selling physical goods, your business needs an inventory management system. Whether you run a retail store or an e-commerce site where you sell multiples of the same product, an inventory management system helps you keep an eye on how many you have, so you know when to restock and what your profits will be.
- Complicated Payroll Taxes
Anyone who has employees is going to need to deal with payroll taxes, but it can get more complicated in certain instances. For example, if you have multiple locations in different states or even different countries, you’re going to need to deal with different jurisdictions when it comes to taxes, which is complicated.
- Time Tracking
If you provide services or you have employees with billable hours, time tracking is crucial. Check to make sure your accounting software provides an option for multiple people to complete time tracking activities if you provide services. Even if the software doesn’t provide built-in time tracking, you may be able to track time and input it more easily in certain software than in other software.
3. Look at Some of the Most Popular Accounting Software
Many of the most popular accounting software programs have most of these things built in. After all, that’s why they’ve become so popular; they’re easy to use, simple to adapt to, and come filled with all the features you need as a small business. It’s important that you get a product that you really enjoy for your own business, however, not a product that just has high reviews. Here are some of the most popular accounting software products on the internet:
- FreshBooks | Capterra Reviews: 4.5 Stars out of 5
- QuickBooks Online | Capterra Reviews: 4.5 Stars out of 5
- Sage 50cloud | Capterra Reviews: 3.7 Stars out of 5
- Zoho Books | Capterra Reviews: 4.4 Stars out of 5
As you can see, all of these are rated better than average, but the rating is slightly different depending on the software. This may be because certain software products are better than others overall, or because some products are better for certain industries or businesses. Regardless of which one is most important for you, looking at the most popular software options can help you narrow down your options to the right answer.
Finding a software accounting software that works for your specific small business can help you run your business more effectively. If you’re interested in finding a great option for software accounting, make sure you follow these steps to ensure that your software meets your needs. Additionally, check for a free trial period for the software you’re interested in. That way, if it doesn’t work out, you can try out something else before you pay for the full price.