Modern accounting tools help organize and streamline business finances. Discover popular services available for simplifying your accounting needs in 2024.
Every business has profits, losses, expenses and budget surpluses. Simplifying your accounting needs is a priority in a world where even small, local businesses operate on a global scale due to internet and online shopping by international consumers. Online and cloud-based accounting software services are available to keep your finances organized and business running smoothly all year long.
Essential functionalities of modern accounting programs include report generation, transaction recording and purchase orders. Modern accounting software even helps facilitate contracts between businesses and their clients, customers partners and/or investors. Popular online accounting tools are effective, affordable and user-friendly. Read ahead to learn about the best programs and tools available for simplifying your accounting needs in 2024.
Business Accounting 101 - What You Need to Know
Accounting involves several terms and phrases business owners need to know to run a successful business today. Accounting is the analysis of financial transactions recorded during bookkeeping processes. These transactions have varied names/functions and are recorded in specific document forms.
Debits and Credits
Debits and credits are common terms/transactions used by consumers and businesses alike. They are both also fundamental centralized aspects of business accounting. Debits/credits as applied to business accounting are more involved than those used in normal consumer banking. In a personal bank account, a debit decreases the account balance and a credit increases it. How a debit/credit affects an account for business purposes depends on the type of account in use. For example, a debit posted to an asset account increases the account balance. In contrast, a debit posted to a liability account decreases that account’s balance. In business accounting all debits are also recorded on the left side of a transaction whereas credits are posted on the right.
Double-Entry Accounting
Double-entry accounting implies a single transaction entered into an accounting program has an impact on at least two accounts. Credits are required to be entered for every corresponding debit transaction and vice versa. Double-entry accounting is an essential practice for expanding businesses and smaller companies. This type of accounting is not necessarily imperative for freelance entrepreneurs and/or sole proprietors who do not have investor funds to account for, however.
Financial Statements
Various types of financial statements are essential to running a business and managing its accounting needs. Financial statements display the financial performance history of your business, allowing you/your team to make intelligent and informed accounting/budgeting decisions going forward. The balance sheet is perhaps the most important type of financial statement available because it provides information about your company’s net worth, cash supplies and account locations to leadership and investors. Cash flow and income statements display the amount of cash your company takes in/spends and how profitable your business is respectively.
Why Accurate Accounting is Important for Company Success
Accurate accounting is essential to the success of your business. Accounting mistakes lead to complications, losses and wasted time. Wasted time leads to decreased profits and employee turnover, the latter of which also costs your business money. Mistakes in company accounting also lead to a potentially damaged reputation and lost opportunities with investors. Investors need to see value and worth in your company. Beyond hard facts and numbers, they also need to feel positive about investing money into and taking a risk on your future. Accounting mistakes give the impression you are not careful as a business owner and/or do not take investment pursuits seriously.
Online Accounting Tools - Common Functionalities
Some features and functionalities offered by top accounting software programs today are similar across all platforms. Other functionalities and features are unique (proprietary) to each individual program. All online accounting tools offer basic accounting features such as ledgers, charts, invoices, financial reports and account reconciliation. Accounts payable, tax calculations and finance law-related functions are also commonly included with most accounting programs in 2024. Internet sales tax involves confusing laws/regulations, which are different in each U.S. state. Most items purchased by out-of-state customers were previously not subjected to sales tax. Laws changed in October of 2019, however, making an already complicated business tax system even further complicated to manage.
Report generation is crucial to effective business accounting as are payroll/time-tracking and expense-tracking features. Payroll features keep accurate records of wages owed and paid to staff. Employee time-tracking features are perfect for recording time worked by hourly employees. Some online accounting tools also integrate taxes into payroll functions. Accounting software programs all commonly include expense tracking features, which calculate reimbursements for purchases logged into expense reports. Some online accounting tools also include features for:
- Integration of CRM and ERP systems.
- Disseminating complicated tax codes and/or advanced accounting protocols.
- User-friendly accessibility.
- Customization.
- International use.
- Multi-user collaboration.
- Purchase orders.
- Contract management.
Benefits of Online Accounting Tools
Online accounting tools provide multiple benefits for business owners, businesses in general, and company employees. Owners benefit from knowing accounting tasks are managed accurately, which allows them to focus on many other important aspects of business operation. Employees benefit because a properly functioning business provides job security and possible increased wages. Accounting tools benefit businesses in general by literally keeping them in business via longer periods of financial stability. Customers and clients benefit from accounting tools because well-run businesses generally offer higher quality customer service and products.
Using accounting software programs keeps you and applicable staff aware of all aspects of company finances, which helps prevent mistakes and take advantage of opportunities. Accurate tax records are vital to compliance and avoiding fines/fees. Accounting programs help keep taxable income and taxes due in proper order. Top online accounting tools help prepare business plans, expenses sheets and profit & loss (P&L) statements necessary to obtain small business loans provided by the U.S. Small Business Administration (SBA). Additional benefits of using online accounting tools include preparation for company growth/expansion and tracking of wayward or suspicious expenses.
Most Popular Online Accounting Tools for 2024
The most popular online accounting tools for 2024are convenient and affordable to use. Reliability and quality customer service are also important factors in how businesses and consumers rate accounting tools today. Some of the most popular accounting tools available on the current market include:
