Key Features That Accountants Prioritize in Accounting Software

Choosing the right accounting software can significantly enhance a company's financial management capabilities, but the specific features valued by accountants can vary based on industry requirements and business size. From large enterprises to small businesses, here are the most common priorities accounting professionals have when selecting their software:

Main Industry Requirements

When evaluating accounting software, each company is likely to have unique needs based on their industry and the regulatory framework they must comply with. For example, many financial institutions and businesses in the manufacturing sector operate under the Generally Accepted Accounting Principles (GAAP) which necessitate a specific approach to accounting, such as accrual basis accounting.

GAAP Accrual Basis Accounting

One of the most critical features any accounting software should offer is support for GAAP accrual basis accounting. This method ensures that revenues and expenses are recognized and recorded at the time they occur, providing a more accurate financial picture of the company's performance.

Project and Contract Cost Accounting

For companies involved in project-based industries or federal government contracts, contract/project cost accounting is essential. This feature allows for the tracking of costs associated with specific projects or contracts, ensuring accurate revenue recognition and cost management. It helps in providing detailed cost reports to stakeholders, which is crucial for performance tracking and invoicing purposes.

Timekeeping and Labor Cost Management

Industries with a significant labor component, such as construction or consulting, heavily rely on timekeeping and labor cost management features. These features allow for the tracking of labor hours, payroll expenses, and associated costs, ensuring accurate expense reporting and cost allocation.

Employee Expense Reporting

For businesses handling numerous expenses, specialized features for employee expense reporting are invaluable. These tools streamline the process of expense claims, providing a platform for employees to report their expenses, which can then be processed and reimbursed efficiently.

Indirect Cost Pool Allocations and Burdens

Indirect cost pool allocations and burdens are critical for organizations that deal with overhead expenses. This feature helps distribute and allocate indirect costs accurately across various segments of the business, ensuring compliance with financial regulations and providing a clear financial overview.

Government Contract Revenue Billing

For companies working with government contracts, the ability to manage government contract revenue billing is a must-have feature. This feature ensures accurate and timely billing for government projects, ensuring compliance with government regulations and maintaining a positive relationship with clients.

Common Features Across All Industries

Beyond industry-specific requirements, there are several features that are highly valued by accountants regardless of the business size or type. These features include:

Bank Reconciliation

Automated bank reconciliation features are highly valued by accountants. These tools enable the matching of transactions from bank statements with the company's accounting records, significantly reducing manual errors and speeding up the reconciliation process.

Real-Time Bank Feeds

Features that allow for real-time bank feeds into the accounting software are highly sought after. This ensures immediate updates to the books of accounts, providing accountants with the most up-to-date financial information, which is critical for making informed decisions.

Reporting and Tracking

Accurate and comprehensive report generation is essential for managing the financial health of a company. Many accounting software packages offer robust reporting and tracking features that allow accountants to generate various informative reports, such as profit and loss statements, balance sheets, and cash flow statements.

Inventory Management Features

For organizations involved in manufacturing or production processes, inventory management features are indispensable. These features help track raw materials, finished goods, and work-in-progress, ensuring that inventory levels are accurately maintained, and production costs are accurately reflected.

Popular Accounting Software Options

While cloud-based accounting software offers many similar generic features, the choice of software can greatly depend on the size of the organization. Smaller entities might benefit from starting with software like Xero, which is user-friendly and offers a range of cost-effective packages. For larger organizations, QuickBooks is a popular choice due to its comprehensive features and robust reporting capabilities.

To learn more about the selection process or determine which software package best suits your needs, feel free to contact Omaiz. We are here to assist you in making an informed decision.

Conclusion

Selecting the right accounting software is a crucial step in improving the financial management of any business. By prioritizing features that align with your specific needs and requirements, you can enhance efficiency, accuracy, and decision-making within your organization.