In this article, you will learn:
- What is Home Accounting Software?
- Features of Home Accounting Software
- All About Quickbooks Home Accounting Software
- What is the Purpose of Accounting Software?
- Is the Prerequisite Accounting Knowledge Required to Operate Accounting Software?
- What Factors Should be Considered Before Choosing Accounting Software?
- What are the Benefits of Accounting Software?
- Cloud-Based Home Accounting Software
- When is the Best Time to Switch to Cloud Accounting Software?
Most of us do not have control over our financial life. This is because we fail to organize our home expenses, payments, and prepare budgets to have full command over our personal financial goals.
Lack of organization of personal financial information at one place makes it challenging for us to get a snapshot of our spendings, personal savings, managing day-today aspects of our life, and accomplishing long term financial goals.
Whether it’s keeping a track of our monthly grocery budget or saving funds for your child’s education, all of this is quite challenging to achieve without having a proper home accounting software.
A home accounting software can help you get rid of all of these challenges and allow you to manage your finances quite effectively. So, in order to make your life simple, run your home or your business out of your home anytime, anywhere with reliable accounting software for home use.
In this article, we will learn what is a home accounting software, the features of home accounting software, and what are the benefits of using such software.
What is Home Accounting Software?
Accounting software for home use is the one that enables you to manage your personal finances effectively by tracking your income and expenses and budgeting for future occasions.
A home accounting software also keeps a track of your bank accounts and identifies the areas where your money is spent. It uses a simple double-entry bookkeeping system that allows you to record any payment or receipt with regards to any income, expenditure, asset, or liability.
Also, you can have access to your receipts, checks, as well as online banking as online accounting software for home use gets connected to your phone, tablet, and the computer instantly.
Thus, with home accounting software, you can:
- connect your bank accounts
- get a snapshot of your bank account balances
- create income and expense categories to know what comes in and goes out
- reconcile your accounting statements with bank statements
- create a chart of accounts for assets, liabilities, and investments to know your net worth
- prepare a budget in order to track future spending and compare your actual spendings with the budgeted spendings
Features of Home Accounting Software
Simple accounting software for home use allows you to run your home just the way you run your business. It also helps you to run your business out of your home without investing in a home accountant to manage your accounts.
Home-based accounting software has the following features:
- Tracks Income and Expenses
Accounting software for home use integrates all your bank accounts thus allowing you to keep a track of where your money is going. Once you integrate your credit cards, bank accounts, Paypal, and more, you can securely import your transactions which then get automatically sorted into various income and expense categories. You can even snap photos of your receipts and the home accounting software will automatically match them with your existing expenses.
- Capture and Organize Receipts
Gone are the days when you had to deal with a stack of home expense receipts against utility, grocery, and other day-to-day expenditures. Remember the time when you had to go through the hassle of keeping a record of physical receipts and vouchers only to record them in your books later?
Well, with a simple home accounting software, there is no need for you to maintain a record of physical receipts and vouchers as you can snap the photos and add your receipts on the go.
Besides this, you can even upload your receipts and match them to existing expenses or create new expense categories. Furthermore, you can classify your receipts into various tax categories so that you do not have to undergo stress while filing tax returns.
- Create Invoices and Accept Payments
If you are using a home accounting software to run a business out of your home, you can create professional-looking invoices within minutes and get paid faster. Furthermore, you can also accept bank and credit card transfers in the invoice itself. Also, you can track the status of your invoice, send payment reminders, and match your payments to invoices automatically with accounting software for home use. Besides this, you can even customize your invoices with your company logo and can send them via any device.
- Get Ready for Tax
A home accounting software helps you to avoid the stress that you have to undergo during the tax period. This is because you can easily organize your income and expenses into various categories and subcategories and hence estimate how much taxes are due each quarter. You can even set automatic reminders of quarterly tax due dates in a home accounting software to avoid any kind of penalties.
- Pay Your Employees
A home accounting software helps you to track employee time, billable hours by your clients and incorporates such information automatically into your invoices. You can either add the employee hours yourself or give access to employees so that they can complete their timesheets on their own. Such a process helps you to pay your employees easily.
- Team Collaboration
Accounting software for home use allows you to give access to your sensitive financial data to some of the important members of the team. This means that you can give permissions for sales transactions and expense reports, deposits, and much more to specific individuals within your team. Besides this, you can assign work to specific users, thus increasing the productivity of your team.
- Prepare Budgets
In order to run your house properly, it is very important to prepare a budget that includes an estimated amount of various home expenses like groceries, utilities, home rentals, taxes, etc.
Furthermore, if you are running a business from home, you can prepare budgets as per your business need with the help of home accounting software. This will help you in converting estimates into invoices quite easily.
- Create Reports
With home accounting software, those of you who are working from home or self-employed can create basic financial reports like Profit and Loss, expenses, and balances. These customized reports give you important insights with regard to the various aspects of your business. Thus, such a feature helps you to keep a track of cash flow and reports the same on the dashboard of the accounting software for home use. With such valuable insights, you can certainly make better business decisions.
All About Quickbooks Home Accounting Software
Whether it’s running your home or running a business out of your home, Quickbooks gives you smarter tools to organize all your expenses, payments, and other transactions, all in one place.
These tools help you manage your home affairs right from online banking access to managing receipts and checks. Thus, Quickbooks home accounting software helps you run your home from anywhere, via any device so that you can get more done.
Since Quickbooks keeps a track of everything all in one place, it helps you to budget your day to day spending. Not only that, but you can also pay people in time, update your finances automatically, balance your checkbooks and budgets, and get prepared for tax period via Quickbooks home accounting software.
Since Quickbooks home accounting software is cloud-based, your financial data gets safely hosted on the cloud so that you can access it anytime, anywhere, and across any device.
So, with Quickbooks accounting software for home use, you need not get worried about staying on budget, paying your housekeepers, sending invoices, managing receipts, and tracking sales and expenses.
Therefore, Quickbooks offers the following feature to make your ride easy as far as managing your home finances are concerned:
- Track Expenses
Track your expenses by connecting your Quickbooks accountant to your bank accounts, credit cards, and much more. Create custom rules to categorize your expenses and generate reports to know your spendings.
Snap photos of receipts with the Quickbooks mobile app and match your receipt information to an existing transaction.
- Be Tax Ready
Since Quickbooks automatically categorizes expenses and organizes them in one place, you can easily track expenses all year round. Therefore, you do not have to worry about overlooking tax deductions and undergoing stress during tax filing.
- Generate Professional Invoices
Do not worry about generating invoices when running a business from your home as Quickbooks home accounting software helps you create professional-looking invoices tailored for your brand within no time. Besides, it helps you set up recurring invoices for regular customers a well as automatically adds billable hours to the invoices both for clients and employees. Apart from this, Quickbooks automatically matches your payments with the invoices in order to balance your books of accounts.
- Accepting Payments
Quickbooks payments allow you to accept credit cards, debit cards, and bank transfers so that you can accept all types of payments quickly and easily. It also helps you to keep track of your bank balance and know when payments hit your account so that you can make payments on the go.
- Manage Your Bills
With Quickbooks accounting software, you can organize and manage your bills all in one place. Since the bills or receipts are saved in the cloud, there is no chance that you ever overlook any receipt or invoice. Furthermore, you can schedule your bills in advance so that its easier for you to manage your expenses. Also, you can track the due dates of your bills in order to make payments in time directly via Quickbooks.
- Pay Your Bills
There are various ways with the help of which you can settle your bills via Quickbooks. Also, you can pay multiple vendors all at once and also a select method of payment for each of the vendors. Since your business bank account is connected with Quickbooks, the bills that you pay via check or direct deposit get automatically recorded in Quickbooks. In addition to this, you can even make partial payments against the bills by simply filling in the amount that you want to pay. Thus, Quickbooks will automatically keep a track of the outstanding amount to be paid on a specific bill.
- Track Mileage
In order to add to your potential tax deductions, Quickbooks home accounting software gives you the functionality of tracking mileage automatically via GPS so that you can claim a tax deduction for mileage. Also, you can easily categorize individual trips as either business or personal and get a breakdown of miles in mileage reports that can be shared easily for availing deductions.
- Easy Collaboration
Quickbooks home accounting software allows you as a small business owner to give access to Quickbooks accounts to various employees and partners like sales reps, office managers, etc. Such custom access to Quickbooks would help you to share limited insights with business partners and investors. You can even collaborate with accountants by sending them an invitation to log into Quickbooks account separately.
- Track Time
As a small business owner running your business from home, you can track the time spent by your employees on specific jobs by giving them access to your Quickbooks account so that employees can fill in their timesheets and mark billable hours. Such seamless integration of employee time to Quickbooks would help in preparing accurate timesheets and would enhance payroll.
What is the Purpose of Accounting Software?
Cloud-based accounting software helps you maintain your books of accounts online, anytime, anywhere, and through any device. Since the cloud-based accounting software connects to your bank account, it helps you keep a track of what comes in and goes out of business.
Furthermore, it automates your day-to-day tasks such as managing receipts, creating and sending invoices, data entry, and bank reconciliation.
Besides this, a cloud-based accounting software gives you a snapshot of where your business stands as all the transactions are updated on a regular basis. It also allows you to collaborate with your employees, partners, accountants, and other stakeholders by giving partial or complete access, as per the need. Most importantly, the chances of committing errors are reduced drastically as the information gets updated into your Quickbooks account automatically on a regular basis.
Thus, the purpose of accounting software is to:
- automate day to day tasks like creating and sending invoices, data entry, bank reconciliation, receipt management, etc
- provide world-class data security as the financial data gets saved in the cloud
- give access to multiple users for easy collaboration
- generate and access financial reports at the click of a button
- give an overview of the financial position of your business as and when income and expenses get updated
- improve the accuracy of data by categorizing income and expenses
- saves time and cost as you bank accounts are connected with the online accounting software, which fetches your accounting transactions automatically
- lend mobility as you and run your home and manage the business on the go
Is the Prerequisite Accounting Knowledge Required to Operate Accounting Software?
There are a number of aspects with regards to your business finance that do not necessarily require accounting knowledge or the experience of an accountant. If you want to manage your home finances or run a business out of your home, then an online home accounting software would help you to carry out the day to day tasks quite easily and effectively.
By spending a small amount every month, a cloud-based home accounting software provides you with smarter tools to manage various simple tasks like:
- recording and tracking expenses
- creating and sending invoices
- generating basic financial statements or reports
- reconciling transactions with bank statements
- managing and organizing bills
- tracking time
- managing your contacts
Thus, to perform such day-to-day tasks, an online home accounting software is quite user-friendly and intuitive to help you take control of your finances, in case you do not have any financial or accounting knowledge.
However, there are some tasks that require the expertise of an accountant, especially when you are running a small business.
For instance, deciding your business structure and preparing a business plan is quite challenging without taking the advice of an accounting professional. Besides this, submitting tax returns to statutory authorities requires precision as well as expertise in providing accurate data.
What Factors Should be Considered Before Choosing Accounting Software?
Good accounting software for home use must offer functionalities that help in automating the entire accounting process, providing data security, generating accurate financial reports, and offering customer support when needed. Therefore, before investing in a home accounting software, the following are the factors that you need to consider:
- seamless collaboration
- ease of use
- import or export of data
- high-end data security
- round the clock customer support
- regular software updates
What are the Benefits of Accounting Software?
More and more businesses are now using cloud accounting software to manage their finances. This is because cloud technology has dynamically transformed the way businesses manage finances in day-to-day lives.
The financial information is saved in the cloud and is encrypted, thus, only people having access to their accounting software can view this information.
Furthermore, a cloud accounting software offers a host of tools that help in automating the accounting process as well as undertaking day-to-day tasks like generating invoices, managing bills, preparing budgets, and much more.
Hence, if you haven’t upgraded to a cloud accounting software, then the following benefits of a cloud accounting software would certainly help you in giving a direction.
- Brings Automation
A cloud accounting software integrates your bank accounts and updates income or expenses automatically as and when a transaction takes place. It sorts this income or expense into various categories and creates new categories for the expenses that have not been recorded previously.
Besides, you can even generate invoices and send them directly to your customers to get paid faster. Furthermore, reconciling your income or expense statement with a bank statement is quite easy as you simply need to match book entries with bank transactions.
- Data Security
Cloud Accounting Software provides world-class data security. This is because unlike the traditional accounting system, all your financial data gets stored in the cloud and is backed up regularly. Therefore, you do not have to worry about your data being hacked.
Cloud-based accounting software allows you to work anytime, anywhere, and through any device, as you simply need to log into your account via the internet and get started. This means there is no need for you to get bound to your desk or maintain spreadsheets to organize your data.
With the help of an app or via a web browser, you simply need to connect to your account and access financial information on-the-go.
Since online accounting is carried out from the cloud, you do not have to worry about investing in IT infrastructure. The traditional accounting systems demanded huge investment in IT infrastructure as well as its maintenance. But via cloud accounting, you can access your financial information in the office, at home or during a customer meeting.
And for this, you simply need to pay a small amount of either monthly fee or yearly. This is in contrast to the traditional accounting software where no doubt you have to invest one time, but relatively, the cost is huge.
- Easy Collaboration
Cloud-based accounting software allows you to easily collaborate with fellow accountants, employees, and other stakeholders. This is achieved by giving limited access to each of them depending upon the task they undertake.
For instance, the employees can access timesheets in order to regularly update their logged in hours. Similarly, your accountant can have access to accounting information so that the data is recorded with accuracy and financial reports like income statement, balance sheet, etc are prepared regularly.
Thus, with a cloud accounting software, your colleagues, management team as well as your advisers all have access to the same numbers and reports instantly from any geographical location.
- Constant Software Updates
Cloud accounting software is constantly updated by the in-house developers for change in accounting rules or taxation laws. So you do not have to worry about your financial statements, tax reports, invoices, or other business forms or documents not incorporating the latest changes.
- Third-Party Integrations
Get more done with a cloud accounting software as it offers third-party integrations to provide various other functionalities like payroll, inventory management, etc. Apart from helping you to carry out day-to-day tasks such as generating invoices, managing bills, and completing books of accounts, these programs help you to carry out various other aspects of your business such as managing inventory, payroll, CRM, etc.
Cloud-Based Home Accounting Software
Cloud technology has revolutionized our day-to-day life both professionally as well as personally. Be it uploading pictures on social media, paying utility and other bills via online banking, making fund transfers, or using smartphones to send and receive emails on-the-go, cloud technology has certainly enhanced the way we work and live.
When it comes to business, various cloud-based tools have been developed to launch businesses, organize teams, and serve customers through various devices such as smartphones, laptops, or tablets.
Project management, file storage, video conferencing, online accounting, and social channels are some of the areas where cloud technology has dynamically changed the way we work.
When it comes to online home accounting, Cloud-Based Home accounting software is a tool that helps you run your home as well as your business out of your home in the most effective way. The cloud technology automates the entire process of running your home, managing your personal finances, and running your business out of your home.
Be it managing bills, tracking expenses, generating invoices, scanning receipts, accepting payments, or collaborating with team members, a cloud-based home accounting software makes all of this possible in one place.
Unlike your traditional home accounting system, where you had to manually update the data in spreadsheets, collect and organize receipts, maintain a calendar to track payment due dates, a cloud-based home accounting software surpasses all these challenges and helps you to work as well as manage your home in the most effective way.
With a cloud-based home accounting software, you can:
- Organize and track your expenses
- Pay bills on time
- Connect your bank accounts and categorize expenses as and when the transactions take place
- Prepare budgets and set goals so that you avoid the risk of overspending
- Reconcile your books with bank statements
- Prepare for tax period as income and expense reports get updated automatically
- Accept payments
- Snap a photo of receipts and organize them all in one place
- Collaborate with accountants, managers, and employees to carry out various tasks by assigning roles and giving limited access
When is the Best Time to Switch to Cloud Accounting Software?
As a small business owner, you have to perform a host of activities including bookkeeping and accounting all by yourself due to lack of resources. If you are spending a good part of your time on Bookkeeping and Accounting, you would have to compromise on your core business activities including managing productivity, generating leads, building clients, etc.
So, if your business is facing the following challenges with regards to bookkeeping, then its time that you switch to a cloud accounting software.
- There is less or no automation as you are still manually preparing invoices and entering data, using a physical copy of expense receipts, and spending a good time reconciling books.
- You are desk-bound and cannot manage your books of accounts on-the-go.
- You cannot connect your bank accounts with your accounting software.
- You are manually preparing invoices and processing payroll.
- Spending too much time on secondary tasks in place of core business activities