A key feature of accounts software is the trial balance. All good accounting freeware will include this.
Look at Small business accounting freeware best downloads for more information.
Most freeware accounts systems include Sales, Purchase and Nominal Ledgers, and invoicing, with possibly an inventory control system.
I have spent several years working with these systems, also known as a Supplier Ledger, Creditors Ledger, or a Bought Ledger.
I have been involved in the work of 3 different types of small businesses in the UK including:- Gas Heating Installation and Maintenance, Garden Design and Grass Cutting, and Wooden Flooring Installation and Renovation.
In each case, I needed to use software to keep account of the contracts and monies outstanding, as well as all the other usual accounting functions.
For each business, I tried to keep costs down by using free software; this freeware is sometimes of surprisingly good quality. It might be released as a free advertisement to stimulate sales of other products or services. Other freeware that I use frequently include Firefox browser and phpBB forum software; I believe in freeware! Like every user of the internet, I indirectly use Linux, Apache, MySQL and PHP most times that I browse and visit a website.
Free accounting software should, in a perfect free world, include various components:-
1. Job Costing file with numerous records, so that each job should be followed through in the accounts, showing its status, with profitability calculation as a bonus.
2. Customer File comprising customer records, so that when you have repeat customers, each of these should have a record, which especially counts when you sell on credit terms.
3. Invoice production, because it is useful to have properly printed invoices rather than hand-written ones, which counts heavily with customers (and reassures tax inspectors.)
4. Quotation Software to produce accurate and professional quotes will boost sales, and turning accepted quotes into sales invoices saves time.
5. Stock file comprising SKU records, because if you buy and resell, it is important to keep track of your inventory in hand.
6. Products and/or services file to include things such as "30 minutes work", "standardcall out charge" or "plant a tree" that have a standard price, although you hardly keep them "in stock", and if this amalgamates seamlessly with your Stock Control, matters are simplified.
7. Sales Ledger, with Customer Statements, because if you sell on credit, it helps you for all the software to be integrated.
8. Timesheet entry, because workers will work harder if they have to account for their time, and if they know it will all be entered into the computer.
9. Payroll, so that if you already have timesheets, they can feed directly into a payroll system.
10. Subcontractors Ledger, because in the UK, you must keep track of subcontractors' tax certificates to satisfy revenue authorities.
11. Purchase Ledger. because if you buy stock, it helps to computerise purchase invoices and what is owed to suppliers, and then you might as well include all invoices for everything, including overheads, that are purchased.
12. Petty cash system, because petty cash disappears less frequently, and causes fewer tax problems, if a voucher must be filled in for the computer system.
13. Nominal or General Ledger, because this gives a summary or overview of everything in your complete accounts system; this type of software is essential to the financial health of a business, although many small businesses do not realise the importance of cash control.
A purchase ledger is a new term for what was traditionally called a creditors ledger, which was the management system in accounting (otherwise accountancy) by which a firm or business records and monitors its creditors (suppliers with an account balance).
The purchase ledger contains details of suppliers to the business, and each supplier will have an individual account. A supplier is defined as another firm from which this business has made purchases, and this was historically for purchases on credit, although modern purchase analysis systems now record cash sales too. Information on invoices (and credit notes, which are invoices in reverse) received, and payments made, are recorded in the supplier's account. This was traditionally using the debits and credits system, although computerisation means that this checking is redundant; today the balance of each account at a given moment represents the amount currently owed to that supplier, and the total owed to suppliers will become the purchase ledger total as an item in the Nominal or General Ledger.
Historically, the purchase ledger was maintained in book form, hence the term "ledger", as in the books kept on a ledge, but in modern times it is much more likely to be held on computer using an integrated accounts system written as computer software.
I will gradually add more information about my experiences testing out various freeware accounts systems that are available, and I also intend to compile and add a table of features, which has not yet been published anywhere on the internet.
