What is crypto bookkeeping software for small businesses?
Small firms that deal with cryptocurrencies can manage their crypto accounting procedures with the help of crypto bookkeeping software, sometimes referred to as crypto ERP software for small enterprises. Crypto accounting software simplifies every facet of crypto accounting and can interface with cryptocurrency wallets and exchanges.
The importance of choosing correct crypto bookkeeping software solutions
The speed at which blockchain technology is developing is largely responsible for the complexity of crypto account software. Blockchain networks that are already in place, like Ethereum, are continually being updated as new layers of scaling alternatives emerge. The underlying data sources for on-chain transaction data will alter significantly as a result of these advancements.
The amount of time chief financial officers must spend collaborating with accountants and auditors can be greatly impacted by selecting the appropriate crypto bookkeeping software.
What makes crypto bookkeeping software great for small businesses?
The following are some important factors to take into account while selecting crypto bookkeeping software for your small business:
- Data coverage and quality
The three primary criteria of quality, coverage, and recency should be taken into account while assessing the data quality of crypto accounting software.
Determine whether the software covers all the data sources that are important to you, such as custodial accounts, non-custodial wallets, and blockchains, while evaluating coverage.
The majority of cryptocurrency accounting software supports whatever data source you ask for. It is important to keep in mind, though, that occasionally, getting a required data source—like a new blockchain network—to function can take a long time.
The inability of your project to spread activities across chains without creating new financial reporting issues could arise if it takes longer than a month to establish a new blockchain network.
You should be able to establish qualitative parameters in the system about the marketplaces you may access with suitable crypto bookkeeping software for small businesses. The system should then automatically make a decision based on qualitative characteristics like liquidity.
- Transaction classification and reconciliation
You might be interested in purchasing crypto bookkeeping software and crypto AI that can distinguish between different blockchain events, like staking, minting, deposits, and withdrawals, as well as different asset classes or token types. Additionally, it should be able to streamline accounting for cryptocurrency wallets, where transactions may involve multiple inputs and outputs.
Accurately representing the various transaction kinds, such as recognizing smart contract activities like approvals or appropriately detecting gaps fees, is another feature of good crypto accounting software. In addition, they must be dependable and consistent in recording and handling cryptocurrency transactions, particularly those involving intricate situations like mining, staking, airdrops, forks, and exchanges.
- Integration and scalability
The accounting and tax software you now use for your small business, like as QuickBooks Online, Xero, and Netsuite, among others, should be able to easily interface with good crypto bookkeeping software. This is so that, where feasible, on-chain transactions and assets can be automatically reconciled into your small business's primary ledger by means of crypto accounting software.
Robust and adaptable reports and dashboards are essential components of good crypto accounting software; these aid in tax liability tracking, portfolio performance analysis, financial monitoring, and operational optimization.
In addition to providing a consolidated picture of account balances and cryptocurrency financials, excellent crypto accounting software should be able to record transactions from cryptocurrency exchanges and wallets in real-time.
- Accounting methods and standards
Multiple accounting techniques, such as AVCO, ACB, LIFO, and FIFO, should be supported by excellent crypto accounting software. The most pertinent accounting rules and guidelines in your jurisdiction, such as GAAP, IFRS, or their regional counterparts, should also be followed.
With regard to ASC 820 and IFRS 13, excellent crypto bookkeeping software should also be adaptable enough to take into account differences in auditor opinions about access, cut-off, and other fair value measurement principles.
Need more information and help with crypto bookkeeping software?
Reach out to Entendre Finance today for more information and assistance with choosing the best crypto accounting software for your small business.