Financial software should make your life easier not harder, and it is also ideally useful rather than redundant. If a financial software does not amount to less time spent managing money, with better results then that software may not necessarily be any better than another method of financial management. Of course everyone's needs and goals are different and that is why the following benefits of financial software might be considered when choosing.
• Helps meet financial goals• Easy to use software
• Reasonable cost
• Is efficient and facilitates record keeping
• Produces reports and documents useful in loan processes and tax filing
Types of financial software for individuals and households
Financial software can be divided into three types, personal finances, small home based business, and tax preparation. Depending on how complicated one's finances are all, none or some of the three types of software may be useful. For example, if Mrs. J runs a day care out of her home, and also manages the household finances and Mrs. J's household has a lot of tax deductions and tax reporting requirements, Mrs. J may benefit from the organizational facilities of financial software.
If on the other hand, one has a very simple financial life without a lot of complex monetary calculations, decision making and record keeping, then it may simply be a waste of time and/or redundant to bother with financial software at all. In other words, the individual situation will in part determine how useful financial software can be. The three types of software are described more fully as follows:
Financial management software
Financial management software helps organize bills, check book balancing, calculate expenditures and interest, prepare financial summaries for banks, reminds the user when bills are due, records savings etc. This type of software requires information be entered in consistently and accurately for the software feedback and output to be most accurate. Examples of personal financial management software are Microsoft Money and Intuit Quicken.
Small business software
Small business software is designed for organizing the finances of a small business operation. This includes billing, accounts receivable, accounts payable, customer profiles, financial documentation such as invoices, and balance sheets, company financial profile etc. This type of software can be very useful when managing a small business as when responsibility for clients is involved, it is helpful to have reliable and effective software. A commonly used small business software is Quickbooks, however personal business software is included in premium and specific versions of Microsoft Money and Intuit Quicken.
Tax preparation software
Tax preparation isn't something that always has to be done at tax time. Tax documents are accumulated all year round, and documenting tax related finances can help make the process go a lot smoother when tax time comes around. Tax preparation software is designed to replace and supplement the traditional paper filing method of tax reporting as many of these software's enable the user to file taxes directly through the Internet.
Depending on how complex one's financial tax situation is, this software packages may or may not included all the necessary features and tax code resources needed for optimal tax filing. What these packages can do is help facilitate and organize the tax preparation process and in some cases expedite receipt of tax returns. A few samples of tax filing software are Turbo Tax, Tax Act, and H&R Block Tax preparation software.
The above methods are not the only software available to organize finances. One may be content using software available through Microsoft office such as Excel, access and word. Or one may benefit from finding a bank with an excellent online banking service and manage one's accounts online through one or two banks. Or one may choose a custom made financial planning software from an independent programmer.
Whatever one's financial software choice, the key is to feel comfortable with the method that is being used and being able to be stick with it. As with any kind of management, whether it be a kitchen, children, a garden etc. finances are no different in the sense they require attention to detail and effort. Financial software is a tool that helps with that process but doesn't actually do the job, that as with most things, is left to the software user.
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