Editor's Note: Take a look at our featured best practice, Activity Based Costing (29-slide PowerPoint presentation). Activity Based Costing (ABC) analysis is a methodology for assigning costs to those activities that truly drive these costs. It is tangibly more accurate than traditional costing methods. Traditional costing methods overlook product-specific R&D, advertising, distribution/channel, and [read more]
Five Types of Software Needed to Run an Accounting Company
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Having the right software is essential to running a business these days, and nowhere is this truer than in the accounting industry. This is because bookkeepers have come to rely on computers to assist with almost every facet of their work. From actual accounting work to more tedious tasks like account management and billings, having the right software can make all the difference in any accounting company’s efficiency and success.
The five most essential types of software for an accounting company will focus on billing, accounting work, client management, compliance, and team or task management. With the right software in these areas, any accounting firm can reach peak productivity.
There is much more to know about each type of software and how they are useful to accountants. And if you’re still not sure exactly what accounting software is don’t worry, we will get to that too! So, if you’d like to know more about what the five most essential types of accounting software for accounting firms are, please read on, as we will discuss each in detail.
What Is Accounting Software?
Accounting software has revolutionized the industry in recent years. It allows accountants to be more productive and undertake more complex calculations than they ever could have before. In short, accounting software can be any computer program that assists accountants and their firms either with their actual computations or with the further running of their businesses.
Accounting software has come to reach into every aspect of the accounting business. This can include anything from a product licensed by another company to a customized solution tailored to a company’s exact needs.
Do Accountants Need Special Software?
Accounting firms absolutely need to utilize specialized software to handle more complex tasks such as accounting for multiple clients, completing audits, tax purposes, compliance, consumer relations management, and more. What specific software is right for a particular accounting firm will largely depend on its size.
Individual practices and smaller firms may be able to get away with off-the-shelf software, but the larger a firm gets, the more likely it is that they will need a more bespoke solution to their accounting software needs.
Beyond essential accounting software, practice management software plays a critical role in streamlining day-to-day operations for accounting firms. This software not only integrates billing, scheduling, and document management but also enhances productivity by centralizing these functions in one platform, making it easier to manage client needs effectively. PracticePro 365, for instance, offers robust reporting features that provide valuable insights into firm performance.
Billing and Payroll Management Software
Keeping track of billable hours is the lifeblood of an accounting firm. It is also an area where improved transparency can help both clients and businesses feel better about their relationship. This is where quality billing software can come in handy, both accountants and clients will be able to track hours in real-time, allowing everyone to see how budgeting is being affected as the project progresses. Clients in particular love being able to see where their money is going.
Accounting Software
This may seem like a prosaic suggestion, but good accounting software will be able to keep up with the industrious use that an accountant can put it to. An excel spreadsheet isn’t going to cut it for firms that are juggling multiple enterprise-level clients. The best accounting software will be able to help compile reports and analyze data at a massive scale—without crashing every five seconds due to bugs.
Task and Team Management Software
As workplaces transition to more digital and remote work, the use of task management software has gained newfound utility in keeping teams motivated and on task. Managing a digital workforce presents unique challenges that the right software can meet head-on with accountability and transparency.
After all, it is harder for a team member to slack off if everyone can judge their progress. And using social motivators to induce better effort has shown surprisingly good results on workplace motivation.
Accounting CRM Software
CRM solutions allow businesses of all types to better manage their client-business relationship through better client tracking and data management. This makes accounting practice management software worth checking out for any business that is serious about streamlining its customer relations. As CRM is a fast developing field, working with a partner who has a good track record is recommended.
Compliance Management Software
If there is one aspect of the job that every accountant loathes, it likely is compliance. The amount of time spent complying with tedious regulatory hurdles isn’t just a waste of time, it is also a spectacular suck on company morale. The best compliance management software will automatically track and aid in producing necessary reports.
Finding the Right Software Is Essential to Accounting Success
In conclusion, the right software can make all the difference between success and failure for an accounting firm. And as you can see from the above, it can also mean the difference between a bookkeeper breezing through tasks such as team management, compliance, and customer relations, or slogging through them with the wrong software solution.
Finding the right accounting software can be intimidating, so please don’t hesitate to reach out with any questions or comments you may have about your own needs. As always, thanks for reading!
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About Shane Avron
Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.
