There are a number of things you need to keep track of when you own a small business. One thing that you should never skimp on is your small business accounting tools. Knowing where your money is going, and being able to reconcile any discrepancies immediately, is essential to your company’s health and growth.

There are three basic types of software you may want to consider providing your accounting department: bookkeeping software, timekeeping software, and bank reconciliation software. While there can be some overlap among them, you’ll want to understand the particulars of each kind in order to effectively assess what your business needs.

Bookkeeping Software

The basics of accounting happen right here, and this is probably what you think of when you consider software for your accountant. Bookkeeping software should be able to track your cash position, record transactions such as sales, billing, purchase orders, and vendor payments. there should also be a way to prepare invoices, sign checks, and document all of the above. Some small business accounting programs might give you the ability to track your inventory in addition to being able to balance your books and reconcile your accounts.

Timekeeping Software

Small business accounting isn’t just about paying vendors. Timekeeping software is essential if you have hourly employees. This both gives you the tools you need to pay them and can also keep track of workplace compliance in regards to breaks and lunches required by your state laws. Even if you don’t have hourly employees, or if you are a sole proprietor, there can be a lot of value in tracking your time. Knowing the amount of time you spend on any given task or project can be a terrific indicator of your profitability and can help you scale your operation accordingly.

Bank Reconciliation Software

Bank reconciliation software may seem redundant or unnecessary, but it will allow you to use data matching to analyze your transactions with your bank. This can shave hours off the workload of your accounting team. Even more important, it can help identify discrepancies that may be impossible to otherwise. You won’t know how invaluable that is until your accounting team spends weeks trying to track down a transaction that was recorded wrong and throws off all of your books.

Some of this software is available free, and some can be had for a nominal price or a monthly access fee. Don’t overlook the importance of small business accounting tools. Not only will your accountant thank you, but you’ll always have the financial information you need right at your fingertips.