It used to be the case that when a business needed accounting software, it was a simple choice between Sage and Quickbooks. However, as the market grows, a host of new web and desktop-based solutions are starting to oust the standard systems in the world of accounting software. Some are created for specific industries, whilst some are suited to certain business sizes, with various levels of functionality. Different systems also have different deployment models and integration methods, some of which are more expensive than others depending on the business. There are many factors to consider when selecting the right solution for you, which is why we’ve put together this guide to show you when choosing Accounting Software.
Why Do I Need Accounting Software?
Before you can select an appropriate solution, it helps to understand what you actually need it for. Some businesses are satisfied with just using spreadsheets or handwritten ledgers. However, there are a host of advantages to upgrading to an Accounting Software solution:
- Efficiency – the main advantage of Accounting Software for most people is the ease and efficiency it provides compared with its alternatives. Accounting Software cuts, or removes entirely, redundant data entry by simplifying and automating book-keeping processes. Checking information such as bank statements, VAT returns and monthly management accounts can be achieved much more quickly. Some solutions even support online banking and online tax filling.
- Management reports – Accounting Software can generate a range of management reports in real time. This lets you accurately see who owes you money, what your bank account balance is, or how much VAT you owe. You can generate your balance sheet, profit and loss or cash flow reports, or view performance against budget as well.
- Sharing data – Accounting Software can facilitate the sharing and use of data in many ways. You can use information about outstanding debt to generate automatic debt-chasing letters. You can find your most promising customers and automatically send them deals and offers customised to them. You can also check the authenticity of expenses claims.
What Features Do I Need to look for when Choosing Accounting Software?
Deciding on what features you need from Accounting Software can help you to significantly narrow down your options. There are some features that are essential to Accounting Software:
- Basic accounting tasks – the bread and butter of Accounting Software is functionality such as invoicing, income and expense tracking, financial report generation, and client and vendor management. Some small businesses will only require these functions.
- Automation – no longer having to manually deal with processes such as automatic billing, recurring payments and past-due notifications can save a lot of time.
- Quote and estimate creation - Quotes and estimates can be easily made with customised, premade templates, which can then be automatically converted into invoices.
- Tax preparation – Features such as automatic tax calculations, multiple taxes and tax reporting, and the instant emailing of all necessary data and files to your accountant can save time for both you and your accountant.
- Payroll processing – Accounting Software provides a way to let you enter time sheets, calculate pay, print checks and pay your employees all in one place.
- Mobile access – In our mobile-obsessed world, it’s important that any solution can be accessed anytime, anywhere, by a mobile phone or tablet. Many business owners need to travel about and be away from the office, so mobile access provides them with a means to manage their books wherever they are.
- Third party integration – Accounting Software can integrate and automatically input real-time data from the applications and tools that you use the most. This includes POS systems, inventory, ecommerce, ERP, credit card processing, CRM and Google Apps.
What Are My Options in Choosing Accounting Software?
There are a few general categories that most Accounting Software falls into, which accommodate a variety of business requirements:
- Small business payroll and accounting – Some Accounting Software is especially built to provide the basic accounting tools and reports that small businesses need to use your financial data.
- Business management software programs – This kind of solution is higher priced but with a greater range of features. They can include more functions to help you manage your business such as customer relationship management, inventory control, point of sale, billing and purchasing.
- Web-hosted accounting applications – As the business world becomes more confident in the safety and benefits of the internet, more and more online financial management applications have become available.
Free Accounting Software programs – There are quite a few functional free systems available, but generally you ought to be wary of free software. Freeware is usually built to benefit the owner in some way, usually by promoting sales of a full version of the software.
What Else Should I Consider?
After deciding what type of Accounting Software you need, and what features it ought to have, there are a few more considerations to bear in mind whilst looking at potential solutions:
- Flexibility – Software needs to be able to scale as your business grows. This is especially important if you have a small business that is likely to expand significantly.
- Check to see if the software has modules you can add later if necessary. For example, payroll accounting is a module that is often added after a business grows.
- Online or desktop? – Desktop software has generally been more powerful, and you only need to pay once in order to own it. As it doesn’t require an internet connection, business owners can use it without any concerns about connectivity issues. However, desktop solutions have their problems. As they’re limited to a single computer, they are often expensive and require a lot of training to understand and operate. Unlike web-based software, it can’t be accessed if you’re away from the office. Desktop software needs to be updated and repaired regularly, and it isn’t easy to share files between computers. All errors and problems are the responsibility of the user. Data has to be inserted line by line, which can result in mistakes. If the computer dies or the hard disk becomes corrupted, you risk losing all of your files.
There are a lot of considerations when choosing Accounting Software. Going through every option takes a lot of time and money, and there’s no guarantee that you will end up with the right solution.
At Software Advisory Service, we can find the right Accounting Software for you. We offer expert, non-chargeable buying advice, and can provide a shortlist of potential software vendors depending on your specific requirements. Fill in your requirements here so that we can find the solution you need today!