This reference guide provides insight into the accounting features and functions currently available on today's market for small to medium businesses (SMBs). It will help you determine which features your organization needs—or doesn't need.
You can also download an extended guide in Excel format at TEC's Accounting Software Request for Proposal (RFP) Template page.
But first, here's a brief overview:
What Are Accounting Systems?
Accounting systems manage procedures for accurately entering, tracking, and maintaining information related to an organization's financial operations. These accounting applications typically support general ledger, accounts payable and accounts receivable, payroll, job and project costing, and multinational accounting.
Many SMBs require that other functions (such as inventory control, manufacturing management, and financial reporting) also integrate with their accounting system.
About This Guide
Although a full accounting system RFP can contain upwards of 4,000 features and functions, we'll focus on the "big picture" features for now, for (obvious!) considerations of space.
You'll notice that we've grouped accounting features by broad category. These categories correspond to a high-level functional breakdown of software features. In this reference guide, we provide a brief explanation of how each category impacts your accounting processes.
If you'd like more information about a full listing of accounting software features and functions, please visit TEC's RFP Templates page.
Reference Guide to SMB Accounting Software Features
1. General Ledger
Chart of Accounts
The chart of accounts is, for all practical purposes, the business management system. If revenues and costs are not captured and segregated into the best suited categories, the financial statements you produce will be useless.
Transaction Processing
This category describes features that address typical journal entry processes, including general transaction processing, workflow period closing, batch layout configuration, and job cost adjustments.
Month- and Year-end Closing
While you can bill revenue and collect cost information, if this information is not published in the form of financial statements in a timely manner, the statements themselves are essentially useless.
Control Reports
All business management systems must have some form of controls to make sure information is input correctly. Software features covered in this category are designed to accomplish this task.
Financial Statements
Financial statements drive the company. However, for smaller companies this may not be true to the same extent, since the owner or manager should have a "feel" for operations rather than relying on printed reports. Larger companies cannot do this, simply because they are too big.
2. Accounts Payable
Vendor Master File
Master files are the starting point in any application. For accounts payable, the vendor master file must be set up first, as that drives the rest of the accounts payable functions.
Purchasing Controls
While anyone can issue a purchase order, the process should be controlled. This category covers the purchasing process as well as control systems you can use.
Data Input
Once a purchase order has been sent and goods received, the obligation for that purchase needs to be recognized. This category reviews the various steps required to actually get information into accounts payable.
Payables Analysis
Once an invoice has been input, it needs to be approved and scheduled for payment. This category covers those steps.
Check Writing
Once an invoice has been processed and approved, it needs to be paid. This category addresses various check-writing features, including bank account assignment and check formats.
Control Reports
While you may choose to assume that information has been input correctly, that is not always the case. The features in this category address reports that give users the ability to check information to make sure it has been input correctly.
Financial Reports
Once data has been input into accounts payable, users will probably need to review slices of that data to determine if costs are in line, where costs are being incurred, and how those costs compare against other benchmarks.
You can also download an extended guide in Excel format at TEC's Accounting Software Request for Proposal (RFP) Template page.
But first, here's a brief overview:
What Are Accounting Systems?
Accounting systems manage procedures for accurately entering, tracking, and maintaining information related to an organization's financial operations. These accounting applications typically support general ledger, accounts payable and accounts receivable, payroll, job and project costing, and multinational accounting.
Many SMBs require that other functions (such as inventory control, manufacturing management, and financial reporting) also integrate with their accounting system.
About This Guide
Although a full accounting system RFP can contain upwards of 4,000 features and functions, we'll focus on the "big picture" features for now, for (obvious!) considerations of space.
You'll notice that we've grouped accounting features by broad category. These categories correspond to a high-level functional breakdown of software features. In this reference guide, we provide a brief explanation of how each category impacts your accounting processes.
If you'd like more information about a full listing of accounting software features and functions, please visit TEC's RFP Templates page.
Reference Guide to SMB Accounting Software Features
1. General Ledger
Chart of Accounts
The chart of accounts is, for all practical purposes, the business management system. If revenues and costs are not captured and segregated into the best suited categories, the financial statements you produce will be useless.
Transaction Processing
This category describes features that address typical journal entry processes, including general transaction processing, workflow period closing, batch layout configuration, and job cost adjustments.
Month- and Year-end Closing
While you can bill revenue and collect cost information, if this information is not published in the form of financial statements in a timely manner, the statements themselves are essentially useless.
Control Reports
All business management systems must have some form of controls to make sure information is input correctly. Software features covered in this category are designed to accomplish this task.
Financial Statements
Financial statements drive the company. However, for smaller companies this may not be true to the same extent, since the owner or manager should have a "feel" for operations rather than relying on printed reports. Larger companies cannot do this, simply because they are too big.
2. Accounts Payable
Vendor Master File
Master files are the starting point in any application. For accounts payable, the vendor master file must be set up first, as that drives the rest of the accounts payable functions.
Purchasing Controls
While anyone can issue a purchase order, the process should be controlled. This category covers the purchasing process as well as control systems you can use.
Data Input
Once a purchase order has been sent and goods received, the obligation for that purchase needs to be recognized. This category reviews the various steps required to actually get information into accounts payable.
Payables Analysis
Once an invoice has been input, it needs to be approved and scheduled for payment. This category covers those steps.
Check Writing
Once an invoice has been processed and approved, it needs to be paid. This category addresses various check-writing features, including bank account assignment and check formats.
Control Reports
While you may choose to assume that information has been input correctly, that is not always the case. The features in this category address reports that give users the ability to check information to make sure it has been input correctly.
Financial Reports
Once data has been input into accounts payable, users will probably need to review slices of that data to determine if costs are in line, where costs are being incurred, and how those costs compare against other benchmarks.
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