Best Bookkeeping Software for Small Medium Sized Business

| Updated on: January 6, 2022

What is a Bookkeeping Software?

Bookkeeping or Books of original entry is a science and art of recording all the business transactions that result in a transfer of money or money’s worth’ in the accounts books. Bookkeeping is a task concerned with recording and classifying financial data related to business operations in order of its occurrence. Bookkeeping and accounting are inseparable and there is a thin line to differentiate bookkeeping and accounting.

Features of TallyPrime as a Bookkeeping Software

TallyPrime is a complete business management software that helps you manage all major functions of the business. Using TallyPrime, you manage accounting, inventory, banking, taxation, banking, payroll and much more to get rid of complexities, and in turn, focus on business growth.

Record and bookkeeping  

TallyPrime is a comprehensive accounting system that makes the process of recording transactions and bookkeeping easy and simple.

Invoicing and billing 

It’s simple to create, print and e-mail professional-looking invoices in a few seconds. Fully flexible to configure the information on the invoice, add a logo to the invoice, choose billing formats that suit your business nature and much more, makes TallyPrime a tailor-made accounting software for your business

 Pre-defined chart of accounts  

You create and organize the chart of accounts the way you want. What’s more? TallyPrime comes with a pre-defined chart of accounts. All you need to do is just create and map your ledger accounts.  

Accounts receivable and payable management  

Automated bill-by-bill accounts receivable and payable management in TallyPrime helps you keep track of all the pending bills. The insightful reports along with powerful tools such as ageing analysis, multiple bill settlement, credit control utilities etc. provide you with an efficient way of managing receivables and payables

Bills receivable in TallyPrime

Insightful Accounting and financial reports

TallyPrime comes with a diverse set of readily available business reports with numerous views and actionable insights to help you make informed decisions for your business growth. These reports are designed to aid in analysis such that you can slice and dice the information in reports and create various viewpoints to understand the reports better. 

Accounting Reports in TallyPrime

Complete GST solution

Right from recording tax invoices to filing accurate GST returns, TallyPrime is a one-stop solution for all your GST needs. The prevention, detection and correction technology ensures your books and returns are always accurate. 

Inventory Management 

TallyPrime is a flexible inventory management software that enables businesses to manage the optimum level of inventories always

ageing analysis in TallyPrime

Multi-currency support  

You can record invoices, quotations, orders, accept payments and receive bills in multiple currencies of your choice. The gains or losses in forex that occur due to daily variations in currency rates are auto-calculated

Sales and Purchase Management  

TallyPrime is designed with complete flexibility to suit various purchase and sales processes, followed by the businesses.

Online business reports  

Securely access your business data anytime, anywhere using a web browser on any device. 

Multi-Company support  

With TallyPrime, you can manage multiple companies and easily handle the complexities associated with them. What’s more? You can easily toggle between companies' books and make a quick comparison between two or more companies irrespective of business nature.  

Payroll Management 

Using TallyPrime, you can organise your employees into departments/functions, record attendance and auto process salary calculations. 

Difference between bookkeeping and accounting

Accounting is a broad subject. It calls for a greater understanding of records obtained from bookkeeping and an ability to analyze and interpret the information provided by bookkeeping records.

Bookkeeping is the recording phase while accounting is concerned with the summarizing phase of an accounting system. Bookkeeping provides necessary data for accounting and accounting starts where bookkeeping ends.

The distinction between Bookkeeping and accounting can be tabulated as under:

S.No

Bookkeeping

Accounting

1.

Yield of bookkeeping is an input for accounting

The yield of accounting permits informed judgments and decisions by the user of accounting information

2.

Purpose of bookkeeping is to keep a systematic record of transactions and events of financial character in order of its occurrence

Purpose of accounting is to find results of the operating activity of business and to report the financial strength of a business

3.

Bookkeeping is a foundation of accounting. It is done by bookkeepers, who do not require any special skill or knowledge

Accounting is considered as a language of business. Accountants, on the other hand, require special accounting knowledge and skills

4.

The objective of bookkeeping is to summarize the cumulative effect of all economic transactions of business for a given period. This is done by maintaining a permanent record of each business transaction with its evidence and financial effects on accounting variable

The objective of accounting is not only bookkeeping but also analysing and interpreting reported financial information for informed decisions

Tasks you can manage using Bookkeeping Software

Using bookkeeping software, you can manage a host of tasks right from recording transactions to generating reports. Here are some of the key tasks that you can manage using bookkeeping software:

  • Customize invoicing – allows sending invoices as soon as jobs are done and getting paid for works your company does

  • Automate banking – allows getting real-time updates on the cash flow and monitoring financial transactions by connecting to the bank accounts

  • Payment reminding – allows setting up the automatic reminders to customers with overdue invoices

  • Remote access - allows access to crucial business reports on a web browser, anywhere, anytime

  • Inventory tracking – allows managing the flow of products and goods in and out of the company and getting the real-time stock valuations

  • Instantly reporting – allows getting customized reports anytime they are needed

  • Payroll – allows tracking employees working hours and automatically payroll filing and tax calculation

  • Paying bills – allows scheduling bill payments, receiving and storing bills electronically, and knowing where the business is spending money

  • Tax Management – allows automatically calculating the sales and other tax rates the business needs

  • Purchase order – allows simplifying the purchase order process and maintaining the control 

Importance of Bookkeeping Software

Bookkeeping software plays an essential role in keeping track of business financials and assist in preparing the financial statements, giving complete visibility of business health. 

  • Bookkeeping software helps to keep track of receipts, payments and records of every expenditure made from the business

  • It helps to summarize the income and expenditure records on a periodic basis

  • These records are used to create financial reports which tells us specific information about the business as how much profits the business has made or how much the business is worth at a specific point of time

Who needs a bookkeeping software?

A bookkeeping software would be a great deal of help for small businesses who have a daily routine of keeping their books of accounts up-to-date. An intuitive bookkeeping software simplifies data entry, organises your vital information, provides reports, and allows accountants more access to important financial information about many aspects of the business. 

Bookkeeping process

Bookkeeping is a mechanical task that involves the following steps:

  • Collection of basic financial information
  • Identification of events and transactions with financial character i.e., economic transactions
  • Measurement of economic transactions in terms of money
  • Recording financial effects of economic transactions in order of its occurrence
  • Classifying effects of economic transactions
  • Preparing an organised statement known as trial balance

How does bookkeeping software work?

The bookkeeping software starts right from recording the financial transaction and goes all the way till generating the business reports. Here is how it works: 

Things to Consider before Buying Bookkeeping Software

  • Automation of  recoding and bookkeeping tasks
  • Auto-generation of business reports s
  • Scalability & incremental implementation of features/modules as business grows
  • Complete solution to manage GST and other statutory as applicable to your business
  • Integrates several functions such as accounting, inventory, taxation etc. 
  • Online access to business reports 
  • Quick to on-board and easy to use
  • Date Security
  • Option of Free trial to experience the software 

FAQs on bookkeeping software

  • What is bookkeeping?

Bookkeeping is a process of recording and organizing all the business transactions that have occurred in the course of the business.  Bookkeeping is an integral part of accounting and largely focuses on recording day-to-day financial transaction of the business.

  • What are the types of bookkeeping?

The single-entry and double-entry bookkeeping systems are the two methods commonly used. While each has its own advantage and disadvantage, the business has to choose the one which is most suitable for their business.

  • What are the bookkeeping principles?

To ensure the all the transactions are recorded and organised systematically, bookkeeping principles are applied. The following are the bookkeeping principles

    • Revenue principle
    • Expense principle
    • Matching principle
    • Cost principle
    • Objectivity principle

  • What are the elements of bookkeeping software?

Bookkeeping procedures are governed by the end product, the financial statements. And ‘financial statements’ includes profit and loss account and balance sheet including schedules and notes forming part of accounts. The three primary elements of bookkeeping software are; journal, ledgers and financial statements.

  • How to do simple bookkeeping for small businesses?

Bookkeeping is a mechanical task that involves the following steps:

    • Collection of basic financial information
    • Identification of events and transactions with financial character i.e., economic transactions
    • Measurement of economic transactions in terms of money
    • Recording financial effects of economic transactions in order of its occurrence
    • Classifying effects of economic transactions
    • Preparing an organised statement known as trial balance

  • Do I need bookkeeping and accounting software for my small business?

If you're a sole proprietor with a modest income, a bookkeeping software would suffice to run your business smoothly as bookkeeping is the recording phase and provides necessary data for accounting and accounting starts where bookkeeping ends. However, as your business grows, more processes get added to manage your business, thus, accounting software will help streamline your processes better and generate more analytical reports that help in faster decision making.

Read: Why Bookkeeping is important for all businesses?

  • What are the benefits of bookkeeping software?

    • Bookkeeping helps to keep track of receipts, payments. Sales, purchases and record of every other transaction made from the business
    • It helps to summarize the income, expenditure and other ledger records periodically
    • It provides information to create financial reports which tells us specific information about the business as how much profits the business has made or how much the business is worth at a specific point of time.

  • How to choose the best bookkeeping software?

An intuitive bookkeeping software simplifies data entry, organises your vital information, provides reports, and allows accountants more access to important financial information about many aspects of the business. Check out features of TallyPrime as a bookkeeping software for your business, and take a free trial today!

  • What is meant by bookkeeping and accounting?

Bookkeepers and accountants sometimes do the same work. But in general, a bookkeeper’s first task is to record transactions and keep you financially organised, while accountants provide consultation, analysis, and are more qualified to advise on tax matters.

Check out: What is the difference between an accountant and a bookkeeper?

TallyPrime

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