What can accounting software do

Accounting software: what can it do and who is it for?

Anyone who registers a trade and becomes economically active produces business transactions every day. These business transactions must be mapped for accounting purposes. It is not enough just to file the receipts. In order to keep an overview it is necessary to do the bookkeeping. To what extent and in what form this happens depends on your business.

Excursus: Buy with foresight and don't get bogged down

From an economic point of view, it makes sense not to get bogged down with many small auxiliary tools. This is usually expensive fun, which also often leads to (too) high costs. It is better to use fewer providers who cooperate with one another and offer appropriate interfaces. A specialized product that is just a perfect island solution (for example, the perfect accounting software for your purposes), but does not harmonize with your other selected software products, means a lot of manual work to synchronize the data. An example should show how this is meant:

You run an online shop. When placing an order, you must write an invoice. The invoice must be posted and the payment assigned to the invoice. The entire process from ordering to payment should run smoothly thanks to the necessary software solutions. The following sequence would be ideal

  1. Customer orders the goods online in the shop.

  2. System sends order confirmation to customers.

  3. Software informs warehouses about the order and informs customers about the shipment status.

  4. When the goods are dispatched, the system sends the invoice to the customer. This is preferably done in conjunction with the accounting program.

  5. The accounting program monitors the payment deadline, sends a reminder by email to the customer if the deadline is exceeded and informs the accounting department.

  6. The system picks up the account statements and checks the transactions. The incoming payment is assigned to the customer account by the system.

  7. Relevant documents are made available to the accounting department for financial accounting and for VAT registration.

If the individual steps are carried out by different software, the workflow is interrupted. Any interruption means that you have to take manual action. Ideally, you should therefore structure the process flows in such a way that all individual steps are automated. The bottom line is that this saves a lot of time and money. When choosing the accounting software, it is therefore advisable to rely on a product that has the necessary interfaces that you need for the individual process. From this point of view, the cheapest provider is not necessarily the best.

Not all accounting software is created equal

Those who have decided to do the accounting themselves and not do it Engage tax advisors, faces a large offer. The market offers a variety of different accounting tools. These differ in terms of the necessary prior knowledge and the scope of services. Therefore, the question of what accounting software can actually only be answered against the background of which specific software is involved. In order to answer the second part of the question "Who is it suitable for?", It is necessary to take a closer look at the various accounting software. This article highlights three particularly popular products that require different prior knowledge.

What should any good accounting software do?

Before we get into the presentation of the individual accounting programs, we would like to point out that all accounting programs bring certain standards or should absolutely bring them with them. Check your preferred software for the following points:

  1. Please ensure that there is a reliable up-to-date guarantee. This means that ongoing changes in the law are guaranteed through updates throughout the year. This way, you won't make mistakes that could end up with costly consequences.

  2. Accounting software saves time. However, this only applies if the selected software also fits your level of knowledge. If you are a complete beginner who works with an accounting that requires a solid knowledge of accounting, we most likely make mistakes out of ignorance. On the other hand, software that is made for absolute beginners is not necessarily suitable for entrepreneurs who are savvy in accounting. The problem arises, for example, when certain special accounts are to be set up in accounting for the purpose of controlling or when the invoice is also sent to customers based abroad and there is uncertainty about the correct tax code.

  3. Accounting software performs auditing tasks in the background. This means: The software checks your entries for plausibility and completeness. If something is missing, a message appears. You can fix the deficiencies and create a coherent overall accounting.

Anyone looking for suitable software should keep an eye on future developments right from the start. Should the sideline turn into a large company with sales that exceed the limits of small business owners? Then the bookkeeping should be able to grow with it. Software that grows with a company should offer the following services:

  • Document entry

  • Financial accounting

  • Asset accounting

  • quoting

  • Billing

  • Cash book

  • Payroll accounting

  • Inventory management: purchasing and logistics

  • Online banking

  • Dunning

  • Interfaces to tax advisor programs (e.g. DATEV interface) or output in a file format that can be imported into common accounting programs at tax offices (e.g. csv format)

  • Interface to Elster to transfer advance VAT returns and tax returns to the tax office

  • Evaluations: BWA, liquidity, controlling, key figures, etc.

  • Creation of income-surplus-account (EÜR), profit and loss account (P&L) and balance sheet

  • Possibility to create cost centers and your own accounts

  • Modules for expansion

Tried and tested a thousand times over: Lexware accounting

Lexware's software is so popular for a reason. It offers good conditions for beginners and advanced learners. Expansion options in the form of upgrades are also available. The entry-level version offers a complete accounting module, interfaces to Elster and DATEV, online banking and the ability to manage several companies at the same time. You can book an upgrade as the demands placed on the accounting grow. This gives you an integrated cash book function and you can submit the annual sales tax declaration. It is also possible to book personal support. Support is available by phone or email and can also be provided directly on the Leif PC via the screen.

Lexware accounting is well suited for beginners with basic prior knowledge. The software can do everything a small company needs: bookkeeping, annual accounts and balance sheets and evaluations in the form of business figures.

In addition to this popular variant, the provider Lexware also offers other accounting products. In principle, there is something for everyone: for the self-employed with and without previous knowledge, for tradespeople who would like to work online and for those who want to do their accounting centrally on one computer. Take a look at Lexware's product range, you will surely find a product that suits your level of knowledge and your accounting needs.

Tip: Lexware offers an app for document entry. You can take a photo with your mobile phone and send it directly to the software. In most cases, this recognizes the essential information on the receipt and later suggests the relevant data to the accounting department. That works quite well and saves a lot of time.

Buhl: My office software from ZDF WISO

The provider Buhl has an enormous range of different software. You have the opportunity to test the products in advance. In the standard version of WISO My Office you can work with the following modules:

  • contacts

  • Article management

  • quoting

  • Billing

  • Online banking

  • Simple accounting

  • Reports and evaluations.

About the basic version, users report that it is clearly structured and easy to use, even without extensive knowledge of accounting. That is definitely a plus. There is also another aspect, which, however, has advantages and disadvantages. It's about the additional modules.

Modular structure is double-edged

On the one hand, the modular structure is practical, but the interfaces cost an additional monthly fee. In this way, an inexpensive basic package can turn into an expensive fixed cost factor. Another problem is that beginners can hardly see which modules are useful for them and which are not. Some start with a package that is far too large out of ignorance and then fail in the implementation - they are simply overwhelmed and cannot find their way around.

Anyone who is well versed in handling accounting software and also knows how to use the evaluation options and additional modules can, however, benefit. The additional bookable services go far beyond the standards offered by other accounting software. Additional modules can be booked from the following areas:

  • Administration and organization: adding another company, adding additional workplaces, accounting and organizing project-related orders, designing business letters

  • Marketing: Maintaining customer contacts, printing form letters, labels and newsletters

  • Articles, orders and contracts: Create delivery notes from orders, monitor stocks, use finished article lists from the "Craft" module, use ready-made contracts (maintenance, service, delivery)

  • Tax returns and finances: connection of online accounts, interface for tax advisors, creation of tax forms

  • Online shop: interfaces to existing accounts in web shops such as Amazon and eBay, checkout module for real money checkouts

  • Data backup: module for backing up office data

On the one hand, it is good that so many different options are offered; on the other hand, the question is justified whether an accounting software with a module is really useful, for example in the field of marketing. As a rule, specialized marketing tools are the better choice because they offer a lot more possibilities, also in terms of controlling the success of marketing activities. Some additional modules that can be booked are already integrated in the basic version with other software providers. The fact that a data backup has to be booked separately, for example, is not customer-friendly. The same applies to the interfaces to DATEV or to the creation of tax forms, which should actually be included in a standard accounting software.

Different variants with expansion options

Under the name WISO Mein Büro there is an annual version that does not renew automatically and a version that includes an automatic renewal. Both variants cost less than € 100. But if the necessary modules are booked, for example the package “DATEV, Design, Finances +, Craft and Marketing”, just under 3.00 euros per month are added, so a total of around 36 euros gross per year. In terms of total costs, that's a hefty proportion.

Conclusion: The basic version is good for beginners, but be careful when booking additional apps.

sevDesk: Online solution with a reduced scope

In principle, the sevDesk provider has everything that beginners need without a great deal of accounting knowledge. Since it is a cloud solution, you can always access your data if you have an internet connection. They are no longer tied to their workplace in the office. There are three different variants, whereby the first module is only used for invoicing, the second module is designed for standard accounting and the third module also includes merchandise management.

The second variant is ideal for service providers and businesses without warehousing. It includes the advance VAT return with the ELSTER interface, evaluations are available and online banking and payment functions are also on board. If you work with a tax consultant who is supposed to control the work, an interface to DATEV enables the export. To capture receipts, users can either scan the data or capture them photographically using the app. However, practice shows that the receipt recognition of the recorded invoices does not work consistently well. Regardless of the fact that the receipt recognition is not (yet) running optimally in some cases, recording via the app is still practical. This saves the scanner and can later edit the uploaded documents manually.

Our conclusion: Lean solution for the smallest and smallest companies that do not need a balance sheet.

Basic knowledge is always helpful

If you consider that the job of tax clerk is one of the most difficult training courses in Germany, it seems a little surprising that accounting should be possible for entrepreneurs without any prior knowledge. Vendors advertise with it again and again. But just because the software is easy to use does not release you from your obligation to provide correct information to the tax office. If, in principle, you cannot control yourself due to ignorance of the fundamentals of accounting, then from a pragmatic point of view it is not a sensible decision to use such software.

The bottom line is that from a commercial point of view, it is absolutely recommended to familiarize yourself with the fundamentals of accounting in order to be able to check the accuracy of the information provided in the system. It is not advisable to blindly rely on the accounting software to “know” exactly what to do. Ultimately, the software only does what you trigger with your input. If something is incorrectly posted, it is ultimately the entrepreneur who is responsible for it and not the software. “Ignorance does not protect against punishment” applies in particular to documents that you send to the tax office.

If you want to do the bookkeeping yourself, we recommend that you complete a basic bookkeeping course or read up on the topic to keep track of things. Courses from the Chamber of Industry and Commerce, the employment agency, the VHS or online courses from commercial providers or YouTube courses from serious users are ways to get used to it quickly. Alternatively, in consultation with an accountant, tax clerk or tax advisor, you should set up the bookkeeping and have your main bookings explained. In case of doubt, you have a personal contact person this way, if you don't know what to do later.