Accounting software

What is accounting software?

An accounting package or accounting program is a software package that can automate your accounting. Working without accounting software – which was the norm a few decades ago, among other things with so-called manual carbon-copy systems – is very time-consuming and even risky, because the technique of bookkeeping is rather complex, with manual entries that have to be carefully balanced.

Modern state-of-the-art accounting software (semi-)automatically imports data and posts it to the appropriate accounts, such as bank statements that lead to outstanding customer items being ticked off.

Invoicing software is not accounting software

Accounting software contains a wide range of specific functions for keeping accounts in accordance with the law and accounting rules. The software knows, for example, the difference between balance sheet accounts, asset and liability accounts, income statement accounts for expenses ('six' accounts) and revenue ('seven' accounts), and how entries should be processed on them. The essence: it is software for specialists, which is what accountants and tax advisers are. 

Good invoicing software is ready to use for the average entrepreneur. They need no specialised prior knowledge, because the very aim of the suppliers of such programs is to make invoicing easy, correct and fast. An invoicing program makes drawing up invoices simple, with automatic numbering and calculations, the production of invoices and credit notes, processing of payments based on bank statements and, among other things, the collection of invoices that remain unpaid. 

Thanks to targeted communication functions, invoicing programs and accounting software work well together. Software focused on invoicing, such as onFact, passes the information on invoices and their payment quickly and correctly to accounting software for further automated processing. 

Advantages of invoicing software

Good invoicing software offers entrepreneurs three important advantages:

  • Few or no errors occur any more because the software performs a great many checks that shield you from the complexity, so every average entrepreneur can concentrate on selling and delivering services, without having to toil over time-consuming administration.
  • Cooperation between entrepreneur and accountant runs smoothly and quickly. Accountants save a lot of time thanks to the electronic delivery of invoice-related data that the accountant can process immediately in the accounting software.
  • An excellent, easily consultable archive of data, because the invoicing software stores all invoice information so that it is quickly accessible. Ideally in a cloud environment, as it is very well protected against outages and even misuse.

Advantages of accounting software

The advantages of working with accounting software are obvious:

  • A smaller margin of error compared with manually entering bookings or making calculations.
    • Firstly, because the software performs some basic checks such as 'are the debit and credit of the journal entry (for example) equal'. If that is not the case, an error message follows.
    • Secondly, through automatic calculation of, for example, the VAT amount based on a VAT rate, or simply adding up the invoice components.
  • Considerably more efficient than manual bookkeeping, because many repetitive actions are automated and do not have to be repeated each time.
  • The software makes it possible to produce statutory and informative accounting statements quickly and correctly, such as a balance sheet, income statement, VAT returns and depreciation tables. Accounting software automatically takes care of a lot of preparatory work. Manually, this would take many times longer én usually require extra versions before a flawless, final version reached the entrepreneur.
  • In the same way, drawing up reports and overviews is much faster thanks to the reuse of previously recorded data than by hand or with an Excel spreadsheet. Unfortunately, too few accountants support their client entrepreneurs with reports on the posted data. Every automated set of accounts has a lot of informative potential, such as reports on turnover trends or overviews of purchase frequency per customer, even the profit made per customer and per product (so that whoever does not generate enough profit relative to the service cost can be adjusted). Be sure to ask your accountant for such reports! They cost him or her little time, as the programs usually have standard reports, while they are very interesting for you as an entrepreneur.

Choose security and communication

There is a wide variety of accounting software. The packages differ mainly in ease of use, the power and speed of automatic functions, the range of predefined reports én the extent to which they communicate with other specialised software, think of stock management or purchase administration. The broader the ability to work together – this is called connectivity – the better, because smooth digital connections avoid having to take manual intermediate steps.

Choose maximum availability

For the entrepreneur and SME, a package that runs in the cloud (so no local version on your computer) is the best choice. Such packages shield you from the technical computer complexity én achieve much higher security levels than locally installed software. Moreover, they can be accessed from anywhere at any time, including on the move and from any device with an internet connection.

They usually also work better together with other and more packages. That is the logical consequence of the fact that suppliers of online cloud software are more strongly focused on communication and cooperation and maintain fewer closed functions. Closed in the sense of inaccessible to third-party suppliers (which leads to more lock-ins, i.e. the obligation to pay extra for add-ons and services).

Invoicing data flowing through at the push of a button is the rule, which facilitates further accounting processing. Even communication to and from customers can run automatically this way, i.e. live and in real time.

Available accounting integrations in onFact

onFact offers smoothly running integrations with Basecone, BilltoBox, ClearFacts, CodaBox, ExactOnline, Octopus, WinBooks Connect and Yuki. Delivery to other accounting packages such as Expert-M or Adsolut is just as possible thanks to the UBL export, the standardised format for data exchange between computers and software programs. Discover the list of integrated software.