The starting point for most transactions is either a journal entry or posting of an accounts payable invoice or a cash receipt. Each of these is made easier and faster using accounting software. When you first start using an accounting software program, you need to set up your chart of accounts, format and design your financial statements, set up your accounts payable vendors and payment terms, and enter all of your beginning balances. Once everything is set up, the hardest part should be over. Your accounting system should be able to handle purchase orders, invoices, inventory transactions, journal entries, and produce financial statements.
Many different companies offer accounting software programs. Some of the companies that offer income tax software for professional tax preparers also now offer accounting software. The accounting software program you choose for your business should offer you some flexibility. Most programs come with a standard balance sheet and income statement format. It will be beneficial to you if you are able to modify the format, and even create your own customized reports.
Besides basic general ledger accounting software, there are also software programs to use for other accounting procedures. There are a number of software programs available for fixed assets and depreciation. Some companies produce combined programs to maintain a computerized fixed asset inventory and also compute depreciation. Other companies offer separate products, or only offer either depreciation or inventory, but not both.
There are also accounting software programs related to sales tax. These programs upload your information related to sales from your general ledger and sub-ledgers, and calculate the amount of sales tax due for each state and locality. A variety of reports can be printed, and normally, the completed sales tax returns can be printed directly from the software program.
A great feature of most accounting software programs is the ability to automate recurring journal entries and reversing entries. A recurring entry is an entry that is standard and is recorded every month. The accounting system may allow you to either record exactly the same entry each month, or to change the amount each month if appropriate. Reversing entries are normally accrual entries that need to be reversed out in the next month. Accounting software programs can do this automatically for you. Both of these features are great time-savers compared to doing these procedures manually.
If you need help with your general accounting, income taxes, or financial reporting, you are in the right place. Please try out the CPA search feature on this website to find a qualified professional in your area to assist you with all your accounting and tax needs.