General Ledger Software in 2023: A Comprehensive Guide to Features and Benefits

Hi there! As a business leader, having visibility into your company‘s overall financial health is critical. A general ledger plays a central role in providing that visibility by recording all financial transactions in one place. But manually maintaining a general ledger is messy, time-consuming, and prone to errors. That‘s why in 2023, technology can be your friend.

Let me introduce you to general ledger software – an invaluable tool for streamlining accounting and enabling data-driven decisions. In this comprehensive guide, I‘ll explain what general ledger software is, its key benefits, top features to look for, and recommendations for implementation. Let‘s dive in!

What is General Ledger Software?

A general ledger is like the master set of books for recording all transactions related to assets, liabilities, equity, revenue and expenses. It summarizes information from sub-ledgers and journals into accounts like Cash, Accounts Receivable, Inventory, and so on.
General Ledger
A general ledger summarizes all business transactions into accounts for reporting.

General ledger software automates the process of maintaining a general ledger. It eliminates manual data entry by automatically recording transactions and posting debits and credits to the appropriate accounts. Leading software solutions are cloud-based, providing anytime, anywhere access to real-time financial data.

Here are some key capabilities provided by general ledger systems:

  • Automatic journal entries
  • Customizable chart of accounts
  • Multi-currency support
  • Bank feeds and credit card integration
  • Financial reporting and dashboards
  • Process workflows and approvals
  • Audit trail tracking
  • Access controls and permissions
  • Integration with other business software

Now that you understand what general ledger software is, let‘s look at some of the great benefits it offers businesses like yours.

5 Benefits of Using General Ledger Software

Benefits of General Ledger Software
Streamlining with general ledger software offers many upsides

Adopting general ledger software can tremendously improve your accounting processes and financial visibility. Here are 5 key advantages:

1. Increased Efficiency and Productivity

By automating time-consuming manual processes like entering transactions, reconciling accounts, and generating reports, general ledger software boosts productivity.

Finance teams recover up to 70% of time previously spent on routine data tasks. This allows them to focus on value-add analysis and decision support.

2. Enhanced Accuracy and Reduced Errors

Humans make mistakes. All that manual number crunching leads to errors that distort financial reporting.

General ledger systems minimize mistakes through automated calculations, validations, and controls. Financial statements become more accurate and reliable.

3. Improved Security and Compliance

General ledger software allows granular user permissions and activity logging to restrict access to sensitive financial data.

Robust audit trails also support compliance with regulations like Sarbanes-Oxley (SOX).

4. Better Reporting and Analytics

Modern general ledger solutions include powerful reporting engines and drill-down capabilities. Easily analyze performance by business unit, product, region or other dimensions.

Dashboard analytics help you identify issues and opportunities so you can make informed decisions.

5. Scalability for Growth

Leading cloud-based general ledger software seamlessly handles growing transaction volumes and increased complexity as your business expands.

The system scales to accommodate organic growth as well as mergers and acquisitions.

Key Features and Capabilities to Look For

Now let‘s explore the most important features and functionalities you should look for when evaluating general ledger systems:
General Ledger Software Key Features
Key features to look for in general ledger software

Automated Journal Entries

Rules-based journal entries save tons of time over manual entry methods. Recurring transactions are created automatically.

Customizable Chart of Accounts

The chart of accounts should adapt to your changing needs. Easily add new segments and categories as required.

Multi-Currency Support

For global businesses, manage financials across currencies. Exchange rates update automatically.

Bank Feeds and Credit Card Integrations

Connecting accounts provides real-time visibility into cash flow as transactions import automatically.

Financial Reporting and Dashboards

Robust reporting capabilities are a must. Look for summary and detailed reports, forecasting tools and custom fields.

Workflow Automation

Streamline processes like journal entries and allocations with built-in approval workflows.

Audit Trails

Complete audit trails provide transparency into who changed what and when for compliance.

Access Controls and Permissions

Granular controls safeguard sensitive financial data by restricting user access.

Integrations with Other Software

APIs simplify connections with POS, ecommerce, CRM, payroll and other business applications.

Mobile Access

Support for apps or mobile-responsive interfaces allows access from anywhere.

Recommendations for Your Business Size and Needs

With so many general ledger platforms available, how do you choose the right solution for your unique business needs?

Here are my recommendations based on company size and other considerations:

Small Businesses

For small businesses, an affordable cloud-based solution requiring minimal IT support works best. Top options include:

  • QuickBooks Online – Simple, user-friendly general ledger software integrated with other QuickBooks modules. Ideal for service businesses. Pricing starts at $20/month.
  • Xero – Full-featured accounting solution good for small ecommerce businesses. Plans from $12/month.
  • FreshBooks – General ledger capabilities alongside strong invoicing and time tracking. Pricing starts at $15/month.
  • Wave – Free general ledger software good for basic requirements. Paid plans add features.

Mid-Size Companies

Mid-size companies need deeper functionality like robust reporting, multiple entities support, and advanced integrations. Leading choices are:

  • Sage Intacct – Cloud financial management solution with extensive accounting capabilities. Pricing starts at $400/month.
  • NetSuite ERP – End-to-end business management on a unified cloud platform. General ledger is part of the system. Plans from $999/month.
  • Microsoft Dynamics GP – On-premise ERP with strong analytics. Pricing varies based on implementation.

Large Enterprises

For complex global businesses, enterprise-grade ERP systems like SAP S/4HANA, Oracle ERP, and Epicor provide sophisticated general ledger capabilities. Pricing is customized based on unique needs.

Industry-Specific Requirements

Some industries have specialized needs. For example, healthcare organizations should look into Sage Intacct‘s nonprofit and healthcare edition.

Best Practices for Implementation

Here are some tips to ensure a smooth implementation of your new general ledger software:

Migrate Data – Work closely with your vendor to fully migrate historical transaction data to the new system. Account for any data cleansing needed.

Integrate Systems – Leverage APIs to connect the general ledger with other business applications for synchronized data.

Test Extensively – Thoroughly test with scenarios and sample data before deploying the software live. Identify and resolve issues.

Train Employees – Provide training on new workflows and reports. Offer resources and support post rollout.

Plan Communications – Keep stakeholders informed about timeline and changes to minimize disruption.

Involve Leadership – Get buy-in from leadership to set clear objectives and success metrics.

Utilize External Help – Consider partnering with accounting firms or specialists for advice and implementation assistance.

The Bottom Line

I hope this detailed overview gives you a clear picture of how general ledger software can transform your finance processes. By automating routine tasks and providing real-time visibility into financial performance, a modern ledger system is invaluable for growth-oriented businesses.

The key is choosing a solution tailored for your size, industry requirements, and growth trajectory. With some diligent evaluation and planning, you can implement general ledger software to boost productivity, accuracy, and strategic insights.

If you have any other questions as you explore options, feel free to reach out! I‘m always happy to offer technology recommendations and advice.

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