There are many aspects of accounting software that make it a useful tool. If you’re a small business owner, it’s important to know what features to look for. Most online accounting software offers accounts receivable, accounts payable, banking and reporting functionality. Some programs include inventory management, project management, time tracking, and payroll tools.
Here are some core features to look for in accounting software:
| bank feed | Accounting software connects with your bank so that all your bank transactions also appear in your online ledger. |
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| Dashboard | The best accounting software platforms have well-organized, customizable dashboards with clear data visualization and organization capabilities. |
| Online invoicing | You can create and send invoices entirely within most accounting software – no printing or mailing required. |
| recurring invoice | Often, accounting software platforms include automation features that you can use to schedule the same invoices to be sent out at the same time every month. |
| Automatic payment reminder | Many accounting software platforms will automatically remind your clients or clients to pay their unpaid invoices on a regular basis. |
| bank reconciliation statement | All accounting software should have no problem matching your bank transactions with invoices, bills, purchase orders, expenses, and more. |
| financial report | You can use accounting software to produce basic forms such as a profit and loss statement or advanced business health reports. |
| mobile application | Nearly all accounting software platforms offer iOS and Android mobile apps, some of which include nearly all the functionality available through a browser or desktop. |
| Integrate | The best accounting software platforms integrate with POS systems, payroll services, HR platforms, CRM software, and more. |
| Track billable time | Many platforms include functionality for tracking time spent on each task or project, or they integrate with your third-party time tracking platform. |
| Inventory management | Some accounting software includes tools for tracking inventory, creating purchase orders, and maintaining warehouse inventory. |
| Project-based billing | With this feature, you can bill clients based on the time spent on each project or task, as well as an hourly rate. |
| Support multiple businesses | Some accounting software platforms allow you to use the same set of tools for multiple businesses. |
Bank savings
This feature connects the software to your business bank and credit card accounts to receive daily transaction updates. This saves time as you don’t need to upload transactions manually. It also gives you a daily (rather than monthly) overview of your account. Instant bank feeds can help with reconciliation, allowing you to turn it into a small daily task rather than a monthly ordeal.
Dashboard
When you log into your account, you’ll see a dashboard that shows an overview of your account activity and key metrics, such as cash flow, profit and loss, account balance, expenses, accounts payable and receivable, and sales. Some accounting programs allow you to customize what you see first by rearranging information.
Online invoicing
If your business sends invoices, the ability to email them and accept payments online can help you get paid faster. Most accounting programs integrate with third-party payment processors; others require you to use their in-house processing services. Accounting software can also be used as an invoice generator, which is also a plus.
recurring invoice
Using this feature, you can schedule the system to automatically generate and send invoices for recurring charges (such as subscriptions). You can choose how often you want to send invoices (daily, weekly, monthly, or yearly) and indicate whether the bill has an end date.
Automatic payment reminder
This feature helps you remind customers of upcoming and overdue payments. Some have sample email text that you can use as-is or customize. You can then choose when to send the reminder. Some plans give you the option to send a thank you email to your customers after receiving payment from them.
bank reconciliation statement
Smart reconciliation tools can identify potential matches between your bank transactions and the bills and invoices you enter into your accounting software, saving you the time it would take to sift through your bank account for this information. You can then approve or reject the suggested match. The best apps suggest potential matches as you reconcile your accounts, and some include reconciliation tools in their mobile apps.
financial report
Every accounting program produces financial reports. But some are more basic than others, and some require you to subscribe to more expensive advanced reporting plans. If you need specific types of financial reports, you’ll want to make sure they’re included in the software application and plan you choose. Detailed reports help you interpret your financial data to make informed business decisions.
mobile application
Not all accounting and invoicing programs have mobile apps, but the best ones do. However, the functional scope of mobile applications is quite broad. Some only capture receipts for expense tracking, some allow you to create and send invoices, and others have almost all the features you would expect from a web-based software. It’s worth checking whether the software you’re considering offers a mobile app, and if so, what features are included in the app to help you manage your business away from the office.
The best accounting software mobile apps include all the features of a browser version, essentially similar to a version scaled down to the size of a smartphone.
Integrate
The ability to connect accounting software to other business programs you use can save you valuable time because you don’t have to manually transfer data from one system to another. Payroll, payment processing, the best point-of-sale (POS) systems, and the best customer relationship management (CRM) software are just a few of the popular types of integrations offered by accounting software. Integrating with systems you already use can also reduce training time for employees who will use the software.
Track billable time
If you’re a consultant or your business bills clients by the hour, you’ll need accounting software to track and bill your time or integrate with the time tracking program you already use. This is an important characteristic for freelance workers.
Inventory management
If you are in retail, e-commerce, or distribution business, you need an app that helps with inventory tracking and purchase orders. Unless you use ZarMoney, you’ll likely need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory capabilities, look for software that integrates with a dedicated inventory management system.
Project-based billing
Companies, freelancers, and consultants who work with clients on projects or jobs should look for accounting software that can help them track project tasks and budgets. The software should allow you to invoice clients and charge them for projects based on tracked time.
Support multiple businesses
Several of the programs we reviewed let you add multiple businesses to your account, although some charge extra for this convenience. Additionally, the types of accounting tools that are important to you will depend on the specific needs of your business. For example, if you run a small freelance business, project-based billing may be the most important feature on your checklist. Or, if you plan to get some work done on your mobile device, a full-featured mobile app might be your first choice.
