If you’re still stuck on manual bookkeeping, it’s time to switch sides. Spending unnecessary time and money on accounting will leave you behind—after all, 82% of small business owners use accounting software to balance their books, according to the Chamber of Commerce.
There’s no shortage of business accounting apps to choose from. Before you jump at the first app you find, it’s important to understand what to look for. Here are 4accounting app features you might find helpful.
1. Unlimited Invoices
One of the most basic and crucial features to look for in an accounting app is invoicing. A plethora of free apps offer free unlimited invoices and opting for those over an app that limits the number of invoices you can create per month will allow your business to scale more smoothly.
For a professional touch, look for customized invoicing so that you can personalize invoices with your company name, logo, and brand identity.
The purpose of a good accounting app is to automate and streamline your finances, so look for an invoicing feature that does just that. An app that lets you set up recurring payments and send out reminders on near-due or unpaid invoices will help you get paid quickly, as will one that lets your customers make online payments through the app.
2. Expense Tracking
Another basic function you’ll find in most accounting apps is an expense tracker. However, the app you choose should go beyond simply allowing you to enter expenses. One important feature to look for is the ability to link bank accounts and credit cards so you can automatically import your expenses.
Once you import those expenses, a good accounting app should also be able to categorize them. You might find it useful to go with an app that automatically categorizes your expenses for you. While any software will sometimes make mistakes in this area, you can easily go in and double-check your expenses, changing any that were imported incorrectly.
The ability to flag or categorize certain expenses that might be deductible will also help you speed things up during tax season.
3. Cash Flow Calculator
Your app should cover both accounts payable and accounts receivable for the best cash flow management capabilities. If you want to avoid late payments, overdrawn accounts, and coming up short when your bills are due, use an accounting app that gives you a picture of your business’s cash flow in real-time.
Even better, use your accounting app’s cash flow management tool to project what your cash flow will look like in the future based on upcoming invoices and expenses. That way, you can see when your business is short on cash well before bills are due and take action before it’s too late.
You should also be able to easily prepare financial reports. Reports are the ultimate goal of accounting apps, so the more functionality in this area, the better. These reports will help you understand everything from your business’s cash flow, profits and losses, and overall financial health to your business’s taxes and projections for the future.
4. Professional Bookkeeper
If you want to go beyond the basics and really save time, look for an accounting app that comes with a professional bookkeeping service. Depending on the size of your business, you may be able to completely outsource bookkeeping by paying a little extra for a premium subscription that includes a dedicated bookkeeper.
This bookkeeper, or a team of bookkeepers, will reconcile your accounts and close the books for you on a monthly basis. Typically, they’ll also be available to provide additional support over the phone or through email if you have questions or need help. Some accounting apps even provide end-of-the-year tax help along with monthly bookkeeping services.
While this service will cost you more, it can be a good option for business owners who don’t have the time to do all the bookkeeping but also don’t feel ready to hire an accounting staff.
We’ve come a long way from the days of manual accounting and spreadsheets. With the variety of accounting apps out there, ranging from free products to subscription services that come with a dedicated bookkeeping team, there’s something for every business owner.