Choosing Accounting Software In 2021

Speed and accuracy are key factors of the success of any business in the age of digital transformation. That’s why it’s especially important to streamline the accounting process that is responsible for the financial data of any company. Implementing the right accounting software is a way to wipe out the competition. For example, 91% of accountants confirm that technology has significantly boosted their productivity.

How Does Accounting Software Solve Organizational Challenges?

Saving Time and Costs

Accounting is regarded as a very time-consuming task because you should record and count a lot of transactions. Nevertheless, the specialized software automates all the required procedures, allowing you to finish them quickly. Your organization won’t need to employ additional accountants to keep books, enabling you to save the company’s costs. What’s more, these tools can eliminate mistakes like duplicate data.

Making Bookkeeping Flexible

Accounting solutions give users the convenience of managing and tracking their organization’s financial data and performing bookkeeping tasks from anywhere in the world. At present time, accounting software can be used remotely or installed on any mobile device, including tablets and smartphones. It allows users to perform various processes and view financial statements anytime and anywhere.

Increasing Financial Transparency

Accounting software allows business owners to monitor the financial standing of their organization more comprehensively. You can track revenues and expenses, profits and losses, generate reports and cash flow forecasts. Financial visibility is pivotal to carry on operations. With real-time data, managers can make better decisions and be ahead of their competitors.

Ensuring Accurate Invoicing

Accurate invoicing is the basis of every successful company. You can’t even imagine how many mistakes are made when drawing invoices manually! The worst thing is that this can result in losses. For example, failing to put due dates on an invoice leads to 61% of late payments. Accounting software can solve this problem by automating the invoicing process and offering templates. This will help users to avoid the inevitable errors made by manual invoicing.

Simplifying Taxes

The tax period is usually exhausting for companies. It’s difficult to manually keep track of transactions, calculate how much your company owes, as well as file the returns. Accounting solutions significantly simplify these procedures by automatically preparing the required statements.

Which Features Should Accounting Software Have in 2021?

How to choose the best accounting tool, with a myriad of offers in the market? There are several features that every company should look for in an accounting package in 2021. 

Data Security

It’s crucial to keep your sensitive financial information safe. Many companies currently have to work remotely due to the covid pandemic. This means that their employees use their own devices instead of secured corporate computers, creating numerous points of access to an enterprise network. Hackers can take advantage of this situation, hack the system, and steal your confidential data. To protect the valuable information, your business needs to implement specialized software, such as Identity and Access Management (IAM), Unified Threat Management (UTM), or Security Information and Event Management (SIEM) solutions. They can detect undesirable attacks, identify policy violations, defend from DDoS attacks, filter spam and viruses, and much more.

Cross-Platform Integrations

An accounting tool should be able to communicate with the banking, e-filing, as well as e-commerce platforms used by the companies. This connection will raise the efficiency of financial transactions. Furthermore, remote work requires using mobile solutions that also should talk with all necessary equipment and systems. Modern accounting software should seamlessly integrate with the company’s internal systems and other financial programs, such as Enterprise Resource Planning (ERP) system, Customer Relationship Management (CRM) system, etc. This will allow you to process cash flow, payroll, or taxes in one place.

Payroll Management

Robust accounting software should be able to handle all aspects of payroll, such as processing wages, calculating working hours and payroll withholdings, generating statements, and so on.

Hedge Accounting

Hedge accounting enables businesses to increase efficiency, visibility, and control in risk management, as well as hedge accounting operations. In addition, this tool can prevent audit failures and improve compliance and security.

Invoicing and Billing

Accounting solutions quickly create invoices and bills, which markedly improve the payment processes. These instruments also match financial operations with the organization’s bank accounts to track and reconcile them. 

Financial Reporting

Accounting solutions generate clear reports, including balance sheets, income statements, statements of cash flows, and other required documents.

Types of Accounting Software

Accounting software can be divided into the following types:

  • Spreadsheets. These programs are usually used by small businesses. They can list relevant financial data and even convert them into charts and graphs. As a rule, market participants apply Microsoft Excel, OpenOffice, or Google Sheets for these purposes. When a company grows, it needs more complex accounting solutions.
  • Commercial Accounting Software. A commercial accounting tool offers more features than spreadsheets. These solutions are designed for mid-size and large companies. They help the accounting personnel create reports, handle payroll, and perform other important financial functions. The most popular instruments include QuickBooks, TurboCash, or FreshBooks.
  • Custom Accounting Software. Custom accounting solutions suit organizations of any size and type. They usually choose this type of software when there are no proposals in the market that meet their needs. For instance, a software development company Elinext created a hedge accounting solution for one of the US-based risk management consulting agencies. 

The customer needed a secure, cross-platform application that’s able to mitigate foreign currency risks, perform market-to-market operations and calculations, generate reports, manage accounting periods and trades, as well as solve other company’s financial tasks. As a result, the agency’s got the solution with the following features:

  • Integration with main trading portals, back-office systems, and ERP solutions;
  • Up to 15000 stock tickers supported;
  • Delivery guarantee;
  • Cross-platform and cross-browser compatible;
  • Available on iOS/Android.

The customer managed to boost its operations, improve internal knowledge transfer, as well as raise operational agility.

Final Word

Using accounting software is fundamental for businesses in the gig economy. You can choose from a variety of tools. If you run a small company that doesn’t need any complex software, your option is spreadsheets. If you want to solve more complicated tasks, consider commercial accounting solutions. If you’re looking for more adaptable and scalable instruments, settle on custom accounting software. Also, pay attention to data security and cross-platform integration, which is essential in 2021.

If you have any questions about accounting software development, contact us.

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