Over the last 30 years, small business accounting software has greatly matured in terms of functionality. Today it is one of the primary software applications businesses apply when setting up. Listed below are some of the primary functionalities of small business accounting software that need to be considered in an evaluation.
The small business accounting software provides combinations of numeric and/or alphanumeric account codes, as well as an unlimited variety of segments, characters, and attributes. Due to this, the general ledger has increased in its flexibility, especially in regards to setting up and tracking subsidiaries, projects, and departments.
You can add new general ledger accounts any time you need to, providing the right kind of flexibility you need after initially setting up the software program.
Within the purchasing module, workflow capability is important. All purchase requisitions may be routed electronically and set to the approved appropriate personnel. Then the requisition, which has been approved, is converted automatically to a purchase order, which is then sent out electronically or printed and mailed out to the suppliers.
Purchasing process efficiency has improved tenfold with this capability, and it has greatly reduced the price associated with the generation of purchase orders and requisitions.
There are software vendors who provide dimensional charts of the accounts. The data elements are able to be defined in an independent fashion, which offers much more flexibility for data inquiry and reporting, as well as data entry, purposes. You may view the dimensions as either one or a number of individual detail layers.
You can add or set up new dimensions anytime you want to track multiple offices, companies, departments, divisions, customers, vendors, projects, or any other element of data. Multi country, company, and currency issues that once seemed insanely complex can now be handled with ease by creating data element relationships.
When it comes to financial software, strong multi-currency capabilities are becoming a standard function. It provides users with the ability to track all their transaction in both their home currency as well as various foreign currencies.
As well, it provides the opportunity to maintain and general ledger information in two selected currencies and run simultaneous currency reports on both.
A number of vendors selling financial software supply fixed asset modules, and others integrate with a stand-alone fixed asset product. Fixed asset software provides a unique benefit in that you are able to buy, set up, and then track your fixed assets automatically.
It also offers much more flexible depreciation schedules and other reporting capabilities.
The flexible reporting capability is seen by most to be the primary advantage of the software. You can now store and report all your financial information. You can get real-time information rather than just a quick snapshot of any historical information.
When it comes to multi-company functionalities, there are two primary approaches. There is some financial software that provides robust multi-company capabilities in one database. This allows for simple setup as well as maintenance on all inter and intra company rollups and transactions. Included in this is the ability to deal with multiple fiscal years for various companies and share customers and suppliers across the companies.
There is also financial software that provides this capability by creating separate databases for every company. This effectively runs the software at an independent level for every company. While not as automatic as the first option, it is none-the-less beneficial for those businesses that do not have complex requirements necessitating a sophisticated method.
The ability to electronically route your documents for sign-off by the approved personnel is known as workflow. For instance, an invoice may be routed to a project supervisor who will then place on it an electronic signature for payment approval.
There are additional features that allow for escalation of rules on dollar amount approvals. This enables sign-off and authorisation of transactions based on employee type.
When it comes to purchasing software, a power capability is the one that allows you to track all your vendor metrics. The software is able to track all information from the purchasing module, receiving module, as well as the accounts payable module to produce an overview of your supplier metrics, including on-time performance, quality control inspections, disposition and performance, and information regarding product cost.
The benefit of being able to get this information is you are able to measure the reliability as well as cost of the suppliers. This information can then be used to negotiate new contracts.
For businesses that have sophisticated requirements when it comes to budgeting, there are specific available budgeting modules. You are provided with not only the ability to create various budget types, however also you get the tools necessary for the process of budget creation.
For instance, the software can import information from Excel spreadsheets that contain the budget, or even provide an online review as well as sign-off on the budgets by executives or supervisors. Some capabilities include financial as well as operational budgeting data, including the budgeting of the quantity of units produced annually, or the full-time equivalent employee information used in the payroll/human resources system.
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