Do you know that only 6% of accountants believe that automation can’t help with any tasks at their firm? This means that the other 94% do believe that automation plays a major part in their day-to-day processes.  

But here’s the million-dollar question. What are the essentials that contribute to creating the X-factor accounting software? This is the question that we’ll address in today’s blog. But first, let’s look in detail at what accounting software is. 

What is an Accounting Software Requirements?

Accounting software automates complex accounting processes such as; bookkeeping, preparing ledgers, journal entries, and financial statements. The interface of accounting software categorizes these tasks into separate categories and places the transactions for each category in the designated place. 

Based on further prompts from the user, these transactions are then converted into financial statements such as the income statement and the balance sheet.  Now, let’s look at some of the benefits of using accounting software for your business. 

Benefits of Accounting Software for Your Business

Using accounting software brings numerous benefits to your business, including; precision, accuracy, time-saving, filing taxes, and maintaining compliance. Now, let’s look at each of these in detail.

1. Precision and Accuracy

Accounting software results in precision and accuracy when creating financial statements.  Do you remember back in high school when you were making a trial balance and both sides didn’t show the same amount because you had missed an entry? 

The same goes for accountants. After all, some humans can make mistakes as well. However, accounting software ensures that this doesn’t happen.  Accounting software places each transaction in the correct ledger, which results in correct balances, whether it’s a trial balance or a balance sheet.

2. Time-Saving

Accounting software can save you a lot of time by automating tasks.  With accounting software, you don’t need to spend time in: 

1. Recording transactions manually in a register 

2. Counter-checking each transaction for accuracy

3. Drafting financial statements from scratch 

Yes, you’ll have to push all the buttons right. Otherwise, the software takes care of everything. 

3. Helps file taxes

An accounting software has information about all your fixed assets during a certain period. 

Thus, you don’t need to gather all the information to file your taxes. The software already has information about your: 

1. Fixed assets

2. Revenue

3. Expenses

It can provide you with this information in one click, which allows you to file for your taxes. 

4. Maintains Compliance

Accounting software is built around the latest accounting standards i.e. IFRS (International Financial Reporting Standards). 

The IFRS includes concepts such as: 

1. Materiality: Considering information as material can significantly change the view a user perceives in a financial statement.

2. Prudence: The concept which states that expenses and losses are not to be understated, and revenues and income are not to be overstated.

3. Accrual: The concept which states that expenses and revenues are to be incurred once they occur, rather than when cash is paid out. 

This ensures that your financial statements adhere to all financial reporting standards, ensuring no objection from the authorities. 

Now, let’s look at 10 must-have requirements for your accounting software. 

9 Must-Have Accounting Software Requirements: Checklist

Here is a checklist of 9  accounting software requirements with an explanation for each one provided below. 

1. User-friendliness

2. Technical support

3. CRM integration

4. Reporting and analytics

5. Accounts receivable dashboard

6. Accounts payable dashboard

7. Fixed assets and payroll 

8. Data security

9. Customization

1. User-Friendliness

User-friendliness should be the top accounting system requirement. After all, accounting is an already complex task, why make it more complex by having software that isn’t user-friendly? 

When choosing accounting software for your business make sure that it doesn’t have the following: 

1. Complex controls.

2. Too many menu layers

3. A cluttered interface

2. Technical Support

Your users are new to the software and they will take time to get used to it. Thus, ensure that the software provides technical support to let them know all the features well. Your software can provide technical support by: 

1. Having a helpdesk option available

2. Providing 24/7 chat support

3. Displaying pop-up prompts for each control/column/option

3. CRM Integration 

Having a CRM integration is a must-have accounting software requirement. CRM stands for customer relationship management software. The goal of the software is to maintain customer data to help in business decision-making. Integrating a CRM into your accounting software helps you by: 

1. Providing data for customer invoices

2. Telling you about customer’s credit due dates

3. Receiving payments directly into your financial system

4. Reporting and Analytics

Reporting and analytics are another top accounting software requirement.  Your accounting software should provide analytics and reports for the following: 

1. Customer credit history

2. Income statements and balance sheets

3. Adherence to accounting standards

5. Accounts Receivable Dashboard 

Having an accounts receivable dashboard provides you with a clear picture of the status of your accounts receivable. An accounts receivable dashboard can provide you with information such as: 

1. Overall department performance

2. The number of outstanding receivables

3. Information on individual accounts receivables

6. Accounts Payable Dashboard

Similar to an accounts receivable dashboard, an accounts payable dashboard can also provide information about payables, such as: 

1. Information about individual payables

2. The total number of outstanding payables

3. Overall department performance

7. Fixed Assets and Payroll

Information about fixed assets and payroll is another must-have accounting software requirement. A fixed assets and payroll dashboard can provide you with information such as: 

1. The total value of your fixed assets

2. The total amount of depreciation charged on your fixed assets

3. The Net Book value of your fixed assets

4. Bank account numbers of all employees

5. Salary packages of each employee

8. Data Security

Data security stands as a top priority for all accounting software features. Accounting data is crucial and safeguarding it is important. 

An accounting software can provide data security by: 

1. Implementing two-factor authentication 

2. Implementing decryption protocols

9. Customization and Scalability

Your accounting should have the opportunity for customization. It should be scalable and be able to integrate into further solutions that suit the organization’s needs. Your accounting software should: 

1. Accommodate more users

2. Integrate with further functions within the organization

Now that we know about 9 must-have accounting software requirements, what we learned throughout the blog. 

The Ending Note

Accounting software has made accounting easy. Using accounting software results speeds up accounting processes such as bookkeeping, preparing ledgers, recording journal entries, preparing financial statements, and managing accounts receivable/payables. The use of accounting software for organizations provides numerous benefits, such as helping maintain precision and accuracy, filing taxes, saving time, and maintaining compliance. Lastly, accounting software should also have in place robust security protocols, and also customize and scale itself to suit user needs.