The field of accounting can be rather confusing to those with little previous experience. Trying to figure out the difference between a debit and a credit, the balance sheet and the P&L, and increases or decreases in shareholder equity is enough to drive many people crazy. Fortunately, business owners that invest in a quality general ledger accounting software program can have most of these items done automatically for them without much effort.
There are a number of difference programs available that can accurately track a company’s expenses. Basic programs, such as Quicken, simply track expenses by reducing the amount of cash a business has. These programs were typically designed to be more like personal accounting software than anything used by larger, more complex enterprises. While it is certainly true that tracking cash flow is a crucial ingredient exhibited by most successful companies, many times a business needs more detail in order to fully thrive.
What is General Ledger Accounting Software?
General ledger accounting software is simply another name for the type of program that automatically uses dual entry accounting. Generally accepted accounting principles state that every journal entry has to have two sides; a debit and a credit. Having two sides to every entry is the foundation upon which the entire field of accounting is based.
Many business owners, however, could not care any less about accounting. They simply want a program that will produce accurate financial results without too much effort on their part. Using software that automatically integrates dual entry accounting makes it much easier to spot financial trends, see where their money is going, and track which customers are slow in paying their bills.
How Does GL Accounting Software Work?
The unique thing about this type of software is the fact that most of the journal entries are made automatically by the program in the background. For instance, when someone enters a new bill to be paid into the accounting system, more often than not they simply go to the Accounts Payable center within the program, enter the billing details, and tell the program what type of expense the bill is for. In the background, the software will record a journal entry similar to the following:
Debit – Office Supplies $50.00
Credit – Accounts Payable $50.00
Once the bill has been approved to be paid, the user generally can ‘pay’ the bill from inside the AP center as well. While the user simply prints the check and sends it to be payee, the software automatically records a journal entry similar to the following:
Debit – Accounts Payable $50.00
Credit – Cash $50.00
General ledger accounting software makes the day to day accounting tasks that much easier. In addition to recording the journal entries automatically, they can generally produce financial reports, such as the balance sheet, profit and loss statement, and a cash flow statement, with just a few clicks. Not only does this make the staff accountant’s job much easier, it also helps management make better decisions that may positively impact the company’s bottom line.
Have you found better GL accounting software than Quickbooks? For fraud detection, Apex Analytix is top and Netsuite has a better ability to create reports, but I don’t think either beats QB on general bookkeeping.
I agree that Quickbooks is the best allrounder