Business accounting & tax software is increasingly becoming an essential business software program that experts recommend for businesses of all sizes. If you’re completely new to the world of business accounting & tax software, learning more about these computer programs could help you greatly improve the success of your business.
What Is Business Accounting & Tax Software?
Business accounting & tax software allows businesses to perform key accounting tasks using computers rather than on paper. Switching from a paper-based method of bookkeeping and accounting reduces the risk of errors and increases productivity and efficiency by allowing tasks to be performed more quickly. Some aspects of accounting can even be automated using the latest programs. Many business accounting software programs have an added tax preparation component that companies can use to complete and file sales tax, business tax and other types of tax returns and payments.
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Types of Business Accounting Software
Nearly all of the business accounting & tax software programs on the market today are designed for double entry accounting or bookkeeping, a method of accounting that involves posting transactions in two accounts. This type of accounting is the one most frequently used for small to medium-sized businesses.
There are two main types of business accounting & tax software
Downloadable software programs With a downloadable program, a business pays a one-time fee to purchase and download the software. Programs may be installed on one or more computers, depending on the licensing provided. To use the program, one must be working on a computer that has the program installed on it.
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Cloud-based software programs With a cloud-based software program, businesses pay a monthly fee and can access accounting information on any computer or mobile device compatible with the program. Information is stored in a secure data storage cloud rather than locally on a server or computer.
Standard Features of Business Accounting Software
Nearly all business accounting & tax software have some key features, including:
Expense tracking Expense tracking allows businesses to manage their expenditures and general ledger accounts. Some programs provide bill payment functionality to simplify paying vendors.
Income tracking Sales tracking allows businesses to manage all types of income, including sales. Many programs include invoicing functionality for submitting bills to customers.
Account tracking Most business accounting & tax software programs allow companies to link their bank and credit card account information for easy tracking and reconciliation.
Reporting Nearly all programs provide the ability to generate basic reports for accounting and tax tracking.
Advanced Accounting Options
In addition to basic features, some business accounting & tax software programs include advanced options, including:
When comparing business accounting & tax software programs, you’ll want to consider the features, the type and the cost carefully. There are many programs available today, so there is sure to be a solution that will suit your business needs and fit your budget.