Whether you do a lot of your own bookkeeping or outsource it all, software can help. It automates a lot of the time-consuming tasks, so you’re not wasting time or budget.
What is bookkeeping software?
Bookkeeping software – also commonly called accounting software – is designed to record and process business transactions. Think of it as a smart electronic ledger that automates double-entry bookkeeping.
Many bookkeeping products can also usually handle (or help with) tasks like billing, payroll, accounts payable, tax filing, and financial reporting.
Online bookkeeping software vs desktop
Bookkeeping software comes in two forms. There’s the type you install on your computer (or local network server) and the type you use online. As with most software services, online comes with some built-in advantages:
Data lives online, so there’s no need to back it up.
You can view or work on your books from any location or device.
You don’t have to email your ledger to your bookkeeper – you can both log in.
Transaction data can flow into the ledger from other online locations such as your bank.
Real-time reporting allows collaboration between you, your bookkeeper and your accountant.
Online bookkeeping software also works well with other business apps. For example you can use third-party point-of-sale software to ring up a sale and the data will flow straight through to your online accounts.
Bookkeeping software features to expect
Not sure what to look for when shopping for bookkeeping or accounting software? Here’s a checklist of useful capabilities to keep in mind.
Your business transactions will stream straight into your accounts.
Get a visual summary of things like money due to
come in, bills due to go out, and more.
Send professional quotes with an ‘accept quote’ button to make customers' lives easier.
Get notifications when customers open or pay your invoice, or if they go past the due date.
Using smart reporting features can speed up tax prep and filing.
Keeps you informed about the volume and value of inventory and cost of goods sold.
It’s easier to work with partners and accountants when there’s one single version of the books.
Get alerts for things like overdue invoices or payments received.
Online invoicing and payments
Complete and send invoices with online payment options.
Enter bills into the system simply by emailing them to your software.
Automatically calculates pay and deductions, and produces payslips.
Integrates with other systems
Check that it integrates widely with other time-saving financial and business apps.
Chapter 11: Using professional bookkeeping services
Professional bookkeepers take away a lot of stress and help keep businesses on top of their numbers. Find out how to find the right one for you.Read next chapter
10. Using bookkeeping software