Accounting software is software that helps you manage your financial records. This software automates and streamlines accounting tasks such as invoicing, tax returns, and reports. As a result, you can work more efficiently and always have a good overview of your financial situation. Accounting programmes are ideal for both small entrepreneurs and large companies. They reduce the risk of errors and save you time. Moreover, many programmes offer integration with other business tools, such as invoicing and banking apps.
The Origins
Accounting software emerged in the 1980s, when the first personal computers entered the market. Before then, companies mainly did their bookkeeping manually. This was time-consuming and error-prone. The first accounting programmes were simple tools that mainly offered computing power. As technology developed, these programmes became more comprehensive. In the 1990s, with the rise of the internet, accounting programmes gained the ability to store and share data online. Today, cloud-based accounting programmes are the norm, giving you anytime, anywhere access to your financial records.
Laws and regulations
When using accounting software, you have to comply with various laws and regulations. For example, the tax authorities have requirements for the retention of financial data. You must keep your records for at least seven years, and this also applies to digital data. In addition, an accounting programme must meet the requirements of the General Data Protection Regulation (AVG) to safeguard the privacy of your customers and employees. It is also important that the software meets the requirements for audit trails so that you can always trace transactions. By using an accounting programme that complies with these rules, you avoid problems in case of an audit by the tax authorities.
Alternatives
While accounting software offers many advantages, there are alternatives that are also worth considering. A common alternative is manual record-keeping in Excel. This offers more flexibility as you can fully customise the templates to suit your needs. You can also choose to outsource your accounts to an accountant or bookkeeper. This saves you time and you benefit from their expertise. In addition, there are also online accounting services where you pay a fixed monthly fee to have your accounts completely taken out of your hands. These alternatives can be attractive if you prefer not to use software or if you have more complex accounting requirements.
Further Investigations
If you want to choose an accounting software, it is wise to research several options. Start by reading online reviews and comparing features on websites that rate accounting software. Many programmes offer a free trial, allowing you to test the software before making a decision. Pay attention to usability, value for money and the availability of customer service. You can also seek advice from other entrepreneurs in your network or your accountant. This will ensure that you choose an accounting programme that perfectly suits your specific needs.
