Individual vs. Business Accounting Software

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Individuals and businesses generally have different needs when it comes to accounting software. The goals of an individual almost always differ from those of a business except rarely in the case of a sole proprietor whose only income is from self-employment.

Business Entity

 If a business is set up as a corporation, an LLC or a partnership, the tax filings will require those companies to produce balance sheets, cash flow statements and certain kinds of documents related to the ownership structure and amounts paid to shareholders, members or partners.

Vendors and Payroll

 Businesses that utilize outside vendors, employ people or hire independent contractors may be required to file tax paperwork for each transaction that exceeds a certain threshold. This paperwork will usually need to be coordinated with the business accounts and expense reports.

Payroll for regular employees also requires benefits paperwork, federal and state contributions for insurance and retirement, and any necessary tax withholding.

Sales and Project Expense Tracking

 All businesses will have sales or billable services which may trigger taxes which will have to be tracked separately. If there are internal expenses billed to particular customers, those will have to be tracked on a per-customer basis so the income can be compared to expenses for purposes of proper reporting. 

Individuals

 Individual accounting software doesn't require any of the preceding three features. On the other hand, it should have features that allow for tracking loan repayments, retirement savings, large purchases and balances for the traditional kinds of accounts used by individuals. Most home accounting packages include a budgeting feature that makes many of these functions available through a standard interface. Generally speaking, any software package that provides a way to do double-entry accounting can form the basis for any of the above functions. Balance sheet, tax paperwork or budget features are all nice to have, but ultimately they all depend on the basic well-understood principles of credit and debit bookkeeping.

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