Accounting is an integral part of every business which records each and every meaningful transaction that the business conducts. Without accounting organizations will not be able to keep track of incomes and expenses. Even the small organizations need to maintain journal entry books and ledger books if not balance sheet or income statement. The basic point is that accounting is a part of study that helps to identify the type of transaction, date, amount, account holder’s identity, and summarize every account’s transaction details over a period of time. In the past, accounting software was only used by a handful of big organizations while the small organizations maintained records in pen and papers. The popularity of free accounting software can be attributed to evolution of technology, intense competition in IT sector, and penetration of the internet to common man.
Free Accounting Software
As the name suggest, free accounting software manages the accounting life-cycle of a business. They are designed to make accounting to process very simple to use and user friendly. By means of the free accounting software, the complete process of accounting is brought down to mere inputs and outputs. The client only requires providing some data in the system that includes date of transaction, account holder’s name or category of account, the amount, etc. and as per this information the free accounting software will automatically process data and generate reports for the user. Nearly every free accounting software packages that is obtainable in the marketplace is capable of managing basic stages of accounting such as posting journal entries, classifying accounts, manage receivables and payables, estimate cash flows, option to forecast revenue growth, prepare budget, calculate accounting ratios, and also generate MIS reports for senior management to make important business decisions.
The basic features of free accounting software are same even though the developer might include some additional features. The most common features that can be found in almost all free accounting software includes:-
1. Posting journal entries on daily basis
2. Classifying account heads
3. Record and backup all transactional data
4. Petty cash management
5. Revenue forecasting
6. Receivables and Payables management
8. Cash Flow Analysis
9. MIS reporting
10. Organize financial statements and annual reports from accounting data
1. Automatic statistics and reports
2. No additional cost of installation
3. Very user-friendly and easy to use
4. Manages the entire accounting cycle
5. Minimizes chances of error
6. Minimizes time
Conclusion & Recommendations
Free Accounting Software came as a boon for not only do they manage the most important part of business, they also reduces chances of making clerical errors and shortens time. The most important point to note is that accounting software in general can be applied to any industry irrespective of size, organizational structure, years of operation and so on. Free accounting software not only assists in minimizing time of the accounting process but they reduce chances of error. They drastically reduce the tension of managing hard copies and records. They also help to prepare management reports with graphs, statistics which are more accurate than human made financial models. In short, companies should exploit the opportunity to incorporate free accounting software in their system and thereby minimize time and reduce cost of operations.