Accounting software is just what its name suggests- software for accounting. It is a type of computer software made use of by accounting professionals to perform accounting operations and to manage accounts.
By using accounting software, you can reduce your financial work to zero. Our lives have become easier thanks to technology like computers and the internet. An example is how the market has eliminated the need for manual accounting.
The manual accounting used to be time-consuming and prone to errors. Accounting software is the solution which eliminates scope for error and reduces the time taken for accounting. Here are some benefits of accounting software:
- It enables fast and easy inputting of data
- It speeds up all accounting processes which enhance overall performance
- It automates processes like producing pay slips, estimating GST, calculating pay, etc.
- It reduces the scope for error.
- It supports function like e-filing of taxes and banking.
- You are free to concentrate on core business activities instead of accounting.
How to Use?
One major reason why businesses use best accounting software is to access financial records and stay organized. Here are various functions of such software:
- Invoice processing
Invoice information can be stored by software. You can create and deliver invoices to customers who owe money to you. Also, you can use vendor invoices when you owe money.
For creating an invoice, you have to enter information like invoice number, date, the name of the customer, product or service provided, price, quantity, and account. You can print and mail or e-mail invoice to customers. Such invoices keep tabs on the amount owed to you.
When you get an invoice, you must make an entry in the software on how much you owe to others. This provides a record of who you owe money to and makes for easy payment of debt. Usually, you will input data like invoice date and number, the name of vendor, account, due date, description and amount.
- Track income and expenses
Income and expenses can be tracked by accounting software. When you receive or make payments, the accounting software shows you the new balance of how much you owe and how much is owed to you.
For accurate financial records, you must know amount owed to you and amount you owe to others. When you use accrual accounting, your software can keep track of accounts payable and accounts receivable.
Your vendor invoices let you track your expenses. Your income can be tracked by a number of unpaid customer invoices.
- Pay vendors
Accounting software provides you the capacity to make payments easily. Since your invoices are saved in your software, you are aware of how much you owe each vendor. This makes the payment process simple.
Choose the vendor you wish to pay, the amount and date of payment. Next, you can print a check. This automates the process for you, and you need not use handwritten checks. You also know how much exactly you owe without referring to paper documents.
- Organize financial statements
Accounting software provides instant access to financial reports. As such you can view balance sheets and income statement (profit and loss accounts). All you have to do is to choose the period you want to view.
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