Introduction to Accounting Software — Video Training from a GoVenture Course Experiential Learning

let's take a brief look at accounting software now in the old days accounting was all done on paper you can get accounting books ledger books that have are lined in a certain certain way to make accounting easy to record on paper and still many businesses will continue to record their accounting on paper but technology computers and smartphones and tablets have made recording your accounting and managing your accounting much easier if you use software why is it easier well a number of reasons it can help identify mistakes before you make those mistakes as you're inputting your double-entry accounting postings but the most efficient thing about accounting software is that it generates reports instantly one click of a button and you can have a balance sheet and income statement of cash flow you can have your bills and and your invoices so it makes generating the financial reports which are really the important part of counting much easier to do and instantly able to do them whereas on paper you'd have to do it all manually so you definitely want to move to electronic accounting systems and there's various options available some people will use spreadsheets and do everything manually in a spreadsheet and that's probably a little bit better than paper but you still have the trouble of generating reports from those spreadsheets you probably want to move to full accounting software now accounting software is both simple and a little bit difficult it's difficult if you don't understand the fundamentals of accounting and by taking this course you are going to understand those fundamentals so it'll be a lot easier for you and once you understand the basics then it's pretty easy to navigate and use and what I'm going to show you here is an example of one a software application for accounting there are many options to choose from I'm not gonna recommend any in this video I'm just going to show you an example of what they look like using what I call a sandbox which is an empty empty business there's no actual transactions in this example I'm going to show you but I want to show you the menus system and the basics of the software so I remember that the fundamentals of accounting is all about accounts and the accounts are used to track financial transactions so one of the things that you have to do when you first set up accounting software is choose the accounting accounts classes that you want to include and most accounting software comes with a predetermined list of accounts so you can see here there's expenses like Bank service charges and freight or shipping or insurance there's a five scroll back to the top here you can see assets like cash on-hand and accounts receivable and liabilities like loans you can customize these accounts by deleting the ones that you know may not be relevant to your business and that'll help simplify your accounting for you and you can add new ones that may be more specific to your business so that's the first step is you create your chart of accounts that match your business and there again templates and a lot of these software programs so if you were running a food business they'll probably have a food business template that you can start with that makes things a little bit easier for you and once you once you have your chart of accounts and once you and there's a few other setup decisions you have to make like the name of your business and and so on you can even connect your banking systems to the accounting software so that automatically updates certain things I'm not gonna review that because it's a bit more of a complex topic I'm just going to show you the basics so once you have your chart of accounts they can do things like post transactions to those accounts so you have accounts and then you have to post transactions to a particular key so for example you can add an expense let's say so I'm gonna click on the expense and I can enter the date of that expense and maybe I'm gonna buy some office supplies so I type office supplies in description and let's say I spend $50 on office supplies and I can categorize them under different expense accounts so I probably have in my list of expenses here let's see we're going to where we're gonna find office supplies and this is a you know one of the reasons that you may want to customize and simplify the chart of accounts it makes a little bit easier to identify expenses you want to keep I'm just going to choose this option here and then it asks me well how am I going to pay for that or how did I pay for that in this case I'll say cash on hand and then I can record that transaction I can also bring up a little bit more details about the transaction so if I want to record purchases made from a particular vendor or supplier that I often purchase from I can set them up as a vendor supplier in the system and then identify every time I purchase from them that's helpful because it allows you to track how much money you're spending with each particular supplier or vendor I also have the option of different currencies as well so you can if you're doing business in different currencies you can choose a different currency you can set up taxes so if every time you're making your purchase there's tax and you have to try and government requires businesses to track their taxes this is another benefit of using accounting software you can very easily track the taxes that you're they're paying on your purchases and in taxes that you're collecting from your customers as well and then make it easy to see how much you owe or how much of a refund you may be due so this is an example of posting a transaction there's other other types of transactions you can post for example you can post purchases as bills and so you may recall newer lessons we learned the difference between a bill and an invoice and invoice is something that we would issue and we can see here under sales we can set up invoices and with our accounting software you can actually customize invoices and add your logo and juice colors for your invoice to make it match your particular brand and so you can issue invoices to your customers and then once your customers pay on those invoices you can go to the payments section here in your accounting system and actually identify the invoice and how the payment was made on that invoice and to keep track of all those payments and if you make purchases we also have the option of bills so you know when you when you receive an invoice from somebody you purchase from it's a bill to you when you're sending an invoice to a customer to be paid it's an invoice for you so that's where the difference between bills and invoices you may recall from our lesson and so you can also generate receipts and record receipts or if you actually have receipts a lot of the software nowadays actually you can use your smartphone and take photos of your receipts and keep track of them and so on and so this this is the benefit of accounting software it's all automated you can use a computer tablet or smartphone to actually do your accounting or have someone else do your accounting and then use your device to actually access the details of your accounting reports and so on so the lots of benefits to using accounting software once you understand the fundamentals of counting and follow the directions it's pretty simple to set up the software with your accounts your vendors suppliers your customers and then you just keep repeating that process and you know once you figure it out you just keep repeating that process and you'll have very clean accounting which you'll be very beneficial for your business good luck