Best Accounting Software in 2021

In this era of cyber-physical systems, financial leaders have understood the importance of a well-defined accounting management system that helps organizations to identify, develop and execute opportunities for financial growth. Traditional accounting systems have become obsolete in this period, where there is an explosion in data. 

The need is to embrace technological transformation to uncover agility, speed, and longevity in business. 

You need modern business tools to manage the accounting tasks, financial transactions, cash flow, and other types of financial-related business practices. Accounting Software can help you handle all critical financial tasks. Such a system helps profoundly in reconciling the torrents of financial data of your business. 

With the demand for accounting software growing huge these days, it is essential to understand the best practices. This buyer's guide covers all the necessary information required to pick the best accounting software solution for your business.

Accounting Management is the system, process, and way to efficiently deal with the business's financial activities. This system allows companies to record all the financial transactions that comprise income, expenses, costs, sales, assets, and liabilities. In any business, two primary titles surround the process of account management- Accounting and Bookkeeping. In business financial management, both the process of accounting and bookkeeping plays a significant role.

• Accounting - It refers to recording the financial information to gain insights about the company's current and future prospects that get converted into useful reports for business people and tax agencies. This process manages financial forecasting, financial audits, strategic planning, tax returns, and performance optimization.
• Bookkeeping - This process deals with the day-to-day financial transactions and administration of a business. It manages accounts receivable and payable management (invoicing), bank reconciliations, expenses, petty cash management, and the production of financial statements that involve cash flows, income statements, balance sheets, and payroll transactions.

A well-planned account management strategy helps keep the financial data intact, customers satisfied and financial activities hassle-free. On the contrary, poor account management brings negative impacts to the business. The companies following the best practices in the account management system will:

• Deploy Accounting Software- The dedicated accounting system provides tools to analyze, manage, and streamline the financial data proactively.  It also produces comprehensive statistical reports that provide a clear set of data to the management for the decision-making process.
• Build cross-functional teams around account managers - The cross-functional teams serve the clients in a well–organized manner. To execute this, teams need software solutions to delineate accounting processes from other business operations. 
• Strategic Account planning - It includes strategic recommendations like partnerships with other companies and creative solutions, resource requirements, and, finally, the long-term goals and benchmarks.
• Validate the plan - It is essential to identify the resources that help achieve the business's financial growth objectives and successful accounting management. The resources include applications that automate the accounting process. 
• Schedule recurring checks: The accounting management system can address any issue in account management and find the areas for improvement.

Accounting system is an application that allows bookkeepers and accountants to record and report the financial transactions of the firm. It serves as the primary tool that assesses the financial health of the organization. The accounting management system provides financial information that helps managerial decisions and proactive management of financial activities. The process of accounting management with top account software helps in planning and formulating policies, controlling performance, reporting to the administration, coordinating among departments, administering the tax, and interpreting the financial statement.

On-Premise: This type of accounting management software is deployed on local servers of the company and managed by the in-house software developers.  It is entirely their responsibility to update and upgrade the software from time to time and perform all troubleshooting activities. 

Web-based or online: Third-party online accounting software providers offer web-based online accounting management solutions that can be accessed from anywhere with internet accessibility. These don't require any hardware installations. 

Cloud-based: The cloud-based accounting management software is hosted through a third-party cloud service provider, and data is stored in cloud servers for high-speed and massive storage capabilities. 

Open source: Open source accounting software comes with free source code that can be modified according to the organization’s needs. 

The proper accounting management system helps in the following ways:

• Proactivity - It allows access to the data. The account manager can know every detail about the company accounts that includes the information regarding budget, who all are the decision-makers, the competition, the pitfalls, and the financial strategy. The accounting software establishes proactive measures to gather all the relevant financial data and information. 
• Speed: With greater speed than the manual accounting method, accounting software increases working efficiencies for organizations. 
• Financial control: With accounting system software, businesses can gain tremendous control over their financial health. 
• Financial data security: Cyber attackers target financial records, statements, and data files to gain unauthorized access to organizations’ sensitive financial information. With multi-layered security and encryption, accounting software systems improve financial data security.
• Financial forecasting: With financial data analysis, customized financial reports, and transaction history, businesses can forecast revenues and expenses. Businesses can make necessary provisions based on the forecast and optimize costs. 

• Saves time by simplifying the overall system of accounting. 
• Accelerates working speed  by automation and interoperability
• Increases accuracy by automating business reports and  invoicing, 
• Takes care of Tax, financial documents and overcomes the taxation complexity 
• Reduces the costs by in-house management of accounts 
• Secures the data with apt solutions for protecting your financial data.
• Provides real-time data that streamlines your business transactions
• Keeps data backup and eliminates any risk of losing the data.
• Eases financial monitoring and maintains the financial records efficiently
• Unleashes management of Cash Flow and helps in avoiding late fees
• Provides scalable solutions and sophisticated customization
• Increases analysis capabilities and helps in improving financial performance

The accountant works as an adviser and financial interpreter who presents the financial data to people within and outside the business. The accountant also deals with third parties like vendors, customers, and financial institutions. The accounting software assists accountants with financial data collection, entry, and report generation. Accounting software is designed to take care of small, mid, and large-sized organizations. 

The accounting software can make the accounting system effective, effortless, smooth, and convenient.  Gaining the trust of your clients is critical for any type of business. With the help of an account management solution, you can maintain strong client relationships. 

• Evaluates the performance of the business – The accounting software allows you to keep track of the expenses, gross margin, possible debt, compare the current data with the previous accounting records, and appropriately allocate the budget.
• Ensures Statutory Compliance - The top accounting systems ensure statutory compliance and ensure that liabilities like sales tax, income tax, and pension funds are appropriately addressed.
• Creates a Budget and Future projections - A well-structured accounting process provides appropriate financial data that can be used to analyze the future business and based on it, budgets can be prepared. 
• Files financial statements - Accounting software eases filing the financial reports with the Registrar of companies, listed entities with stock exchanges, and tax filing purposes.

There are different specialized fields in accounting due to economic, industrial, and technological developments. The process of accounting ranges from auditing to the preparation of tax returns. The accounting software specializes in all of the fields which are as follows:

• Financial Accounting - It prepares and presents financial statements to internal and external users, in addition to recording and classifying business transactions. This primarily involves historical processing data.
• Management Accounting - It includes financial analysis, forecasting, cost analysis, budgeting, and evaluation of business decisions. All the relevant users (management) get information from this type of accounting. It focuses on the needs of the administration.
• Cost Accounting: It is a branch of management accounting. This type of accounting refers to monitor and control costs. It is useful in the manufacturing business.
• Tax Accounting - It deals with tax-related matters and is governed by the tax rules which are prescribed by the tax laws of a jurisdiction. The tax professionals estimate the tax liability of a company and look after the tax planning process by gaining information about the financial statements of the company, which is prepared under financial accounting principles.
• Forensic Accounting - It manages the auditing, accounting, and investigative techniques for the cases related to litigation or disputes.
• Project Accounting - With the help of financial reports, this type of accounting system tracks the economic progress of a project. It plays a crucial role in project management.
• Social Accounting - This type of accounting reports the social implication of an organization’s activities. The other name of this type of accounting is Corporate Social Responsibility Reporting and Sustainability Accounting.

Poor accounts management will harm the organization. It will be great to have a proper account management system by following the business's best practices to avoid all difficulties as mentioned below that arise due to a weak account management system. Accounting software mitigates challenges such as:

• Missing the crucial opportunities in strategic accounts – The weak account management system will fail to set the essential opportunities in the strategic accounts. It will cause chaos in the accounting process.
• Loss of the important accounts - There can be a loss of the business's essential accounts due to improper accounting; ultimately, it will affect the whole financial aspect of the organization.
• Delay in creditor payments – The late payment in the credit reports can spoil the company's credit score. The credit report's late payment will be present for years that show the mistake to anyone who checks the report within that duration.
• Poor commercial credit rating – The weak commercial credit rating can harm the growth of the business. Business owners and managers can face the potential loss of reputation.
• Inadequate accounting can cause criminal and civil penalties - Fraudulent reporting in the account management system will cause criminal and civil penalties.
• Business failure - If the company's funds are mismanaged, or the budget is overextended as against the revenues earned, then the organization has to face losses. The businesses may fail due to insufficient reserves and consistent losses in the company.
• Customers leave, and new customers stay away - The customers will not deal with the company anymore due to a reported financial mismanagement scenario. Even the new customers will lose interest in that company.
• Revenues and Profit shrinks - The loss of customer retention in the company will substantially harm the revenue and minimize the business's profit.

Small businesses and expanding start-ups can meet their growing demands by making use of these features. Small businesses can go with budget-friendly, time-saving accounting software and easy-to-use accounting software. 

• Tracks Inventory - This facility helps track product inventory and offers up-to-date details regarding the amount of stock in hand. Even when you are running out of stock, they can forecast you about the same to make arrangements in advance.
• Mobility – Small business accounting software helps users carry relevant information regarding invoices, expenses, billable time, and client details with the help of mobile applications. The vendors of the accounting app provide all the crucial information to the users on their phones.
• Centralization – You can centralize the critical business processes and tasks like inventory management, payroll, and invoicing with the help of accounting products.
• Short Learning Curve - The advanced accounting system software allows small business owners to get acquainted with the solutions that provide a short and easy learning curve. It helps in minimizing the reconciliation issues and accounting errors.

Before investing in accounting software, ensure that the following aspects are taken into consideration;

• User-friendly software – Ensure that the accounting software you are supposed to buy is user-friendly and provides a dashboard from which you can have your company's financial status. It will help you in simplifying the bookkeeping and accounting process.
• Secure Data - The web-based accounting software will allow you to save the business's financial data on external servers. With the help of the latest technology, security experts secure your data on external servers.
• Cost of the accounting app - If the company has a budget constraint, it becomes essential to consider the accounting software's cost. The user can get the top-end features with costly applications. However, for small businesses and startups, accounting software that provides cost-effective services should be a preferred option. 
• Customer Support - While selecting a software package, it will be great to have good customer support from the accounting app's vendor.  You need the proper support to get acquainted with the features and functionalities of the accounting software. 
• Multi-Currency Transitions – Even small enterprises serve overseas clients, so the accounting app should facilitate multi-currency transactions. As per the requirement, the app should be able to handle foreign exchange rates and conversions. In your base currency, it will be great to have the details of these transactions.
• Integrates with other business apps - For the smooth running of the business, ensure that if you are upgrading to the features of the latest accounting software application, it integrates seamlessly with the suite of other business applications. With this practice, you can boost the efficiency of your business. The accounting app, which is flexible and easy to integrate, will surely help your organization.

Other than the factors mentioned above, here are some other key points to consider, especially if your business set up is small.

• Is the account management system meant for small business owners?
• Does the accounting app go well with the type of your industry?
• Will there be any limit to the number of employees and work on the clients' data?
• Does the app meet the terms of regulations, Taxes, and laws?
• How is the backup system of the data?
• What will be the cost of the software and the extra fee connected to it?
• How is the customer support service?

The advantages of accounting software are as follows:

• Paperless - The risk of manual errors gets minimized, and results can be seen quickly and efficiently, helping your business stay on top of the finances.
• Real-Time Updates - It provides real-time updates of the financial situation that helps make informed decisions regarding the business's financial aspect.
• Customization -  You can access your invoices, customer engagement needs, and sales at one place by using cloud-based accounting solutions.
• Better Relationship Management – It is effortless to maintain good relations with vendors, distributors, and co-workers with the cloud accounting system. 
• Efficient Finance Management- Every department can easily and efficiently find data and invoices and simultaneously update expenses in your business.
• Tech support - It provides tech support with the phone, chats, and forums. With the help of forums, businesses can have access to the other small business owners in the country that discuss the various industries related issues.
• Formulates secure collaboration - This system can be accessed from anywhere, and it is easy for the accountant to obtain any information as per the requirement. You can have controlled access for your employees.

Accounting Software for business has the following features:

Accounting 

It is the primary function of the accounting system software, that manages fixed assets, bank reconciliation, and general ledger. The users can have more sophisticated features such as tags/dimensions, audit trails, etc. with the advanced accounting management system. 

Accounts Receivable 

This feature incorporates invoice customization, account receivable automation, and collections automation.

Accounts Payable 

This feature manages accounts payable automation, purchase order processing, and payment processing.

Billing and Invoicing 

The accounting system has a billing and invoicing system which helps users in automating financial collections. The users can prepare accurate and in-time invoices for their clients and adjust operations to new and effective payment methods. 

Budgeting and Forecasting 

The finance performance for the current year is calculated and interpreted with this feature. The companies can set up viable and optimistic sales targets by preparing the estimates.

Inventory Management 

It provides the necessary feature that helps businesses have a higher shelf-life product line and avoids all sorts of delivery issues like overstocking or understocking.

Cash Flow Management 

It allows companies to collect, manage, and use cash. The companies can track liquidity with the help of this module.

Reporting and KPIs

It covers all the standard financial statements, reports, and key performance indicators related to accounts receivables, inventory valuation, and cash flow that help meet the basic needs of the business.

Payroll Management 

This module allows calculating and processing employee payments, preparing and printing the checks without any delay, and errorlessly responding to legal and tax commitments. 

Fixed Assets Management

This feature manages financial data accurately. It includes features like audit history, cost records, depreciation calculation, and resource allocation.

Modern businesses take up innovative accounting technology solutions to enhance productivity and operational efficiency. The latest accounting trends that can affect financial dealings are as follows:

• Using the power of the cloud - The cloud-based accounting solutions have made the accounting process efficient and the accounting information more accessible.
• Accelerating Automation - The automated accounting system helps in utilizing the capital of the company efficiently. It allows the better management of resources.
• Focus on data analysis - Advancements in data centers and database techniques are required to make appropriate financial decisions. A lot of focus is on data analysis. 
• Proactive Accounting - Proactive accounting allows understanding the potential implications of any significant business initiative that includes tax impact. It helps in running a business efficiently.
• Mobile Accountants - With the advent of cloud computing, the accountant can work remotely. The team prefers to share the tools to enhance remote collaboration and work.
• Social Media Integration - Accounting professionals use social media interaction to form communication with peers and colleagues that helps provide updates related to business, accounting, and political developments. 
• Transparency with the customers - Due to the severe prevailing issues of accounting irregularities and scandals, it becomes essential for accounting professionals to restore trust and credibility by following transparency in the accounting process.

The price of an accounting software system is based on the business size, along with the needs of its operations. The accounting software pricing for small business is more affordable as the features that they would require mostly come in the basic plan of every accounting software. For large organizations, the wiser option is to invest in advanced plans that offer more powerful features.

The accounting software cost can start as low as $15/year (for example, Patriot Accounting) and can reach as high as $31999/year for a 10 ser plan (for example, HostBooks Accounting). Small and start-up businesses can also try free and open source accounting software.

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If you want to have the curated list of best accounting software for your small business, then explore GoodFirms’ coverage. The accounting software list is trustable, as it provides you the authentic insights into the top accounting software available in the market. 

You can grab the opportunity to delve into the list before finalizing the best accounting software for your business. Even start-ups and small businesses can explore the GoodFirms’ platform for a thorough understanding of the top accounting system software available in the market. Simultaneously,  you can even talk to the experts at GoodFirms and explore third-party reviews or vendor literature to gain more information on the accounting software.