While most small business owners understand the benefits an accounting software package brings to their business, it remains a grudge purchase. Yes, it saves substantial head hours compared to manually keeping the books and its reporting functions are more helpful than a spreadsheet.
However, if you happen to be a small business owner with an operation that carries inventory and has a significant number of customers, then you are likely to find an accounting software package will not only save you time, it will cut down on errors which can prove costly, particularly in dealing with the ATO.
Moreover, these days accounting software is easier to use than it ever was. Chances are you don’t need an accounting background to navigate your way around it.
Here are five simple tips for choosing the right accounting software package for your business’ needs.
1. Identify Which Accounting Functions You Require
The first step in choosing the right accounting package for your business is to identify which function you need. Most small business accounting packages on the market feature a standard range of functions:
- Tracking sales
- Managing customer purchases and contacts
- Reporting including standard income, P&L, cash flow and tax reports
- Inventory management
- Merchant accounts for credit card payments
Some packages will hive off some functions such as inventory management and payroll into separately priced modules. Check what comes as standard and what is available as optional modules.
2. Do Your Due Diligence On Accounting Software Options
Do some desk research on popular business accounting packages. See what the reviews say and if there are any consistent assessments. Then reach out to your small business network. Talk to other business owners. See what accounting software they use, preferably in businesses of similar scale to yours. There may be no perfect match for your specific business or industry needs but this part of the process should enable you to create a short list of accounting software packages.
Having arrived at your short list, work through the following checklist of questions.
Does The Accounting Software Scale As Your Business Grows?
Establish if your preferred software comes with modules you can incorporate later as your business evolves. The most popular growth-oriented module is payroll accounting.
If your accounting software doesn’t allow you to add modules as you grow, can you migrate the software to a more comprehensive version later on? Alternatively, can you export your data to a format that can be read by another accounting software package later?
Desktop Or Online Delivery?
Accounting software used to have to be installed on your accounting desktop computer. However, these days, web-based software accessed over a secure Internet browser is the fastest growing form of accounting software access. Online accounting software has proven to be particularly useful for accessing accounting records or data from multiple devices.
Can You Restricted Access Across Types Of Users?
How versatile is the software access security? More than one person needs to be able to use the software simultaneously. However, one staff member may only need access for data entry, while your accountant may require full access.
3. Optional Software Support
One frequently overlooked aspect of accounting software is the availability of support. Include ongoing support costs in your budget. Many accounting software providers offer fee-based support by phone or email. Others include a window of free support for a set time to enable you to familiarise yourself with the software. After that free support time limit expires, a support fee is typically charged either on a per-user, per-query, monthly, quarterly or annual basis.
4. Avoid Paying For Costly Features You Don’t Need
Smaller, less complex businesses often require fewer functions than larger businesses do. Regardless of how compelling the lure of optional “bells and whistles” may appear, resist the temptation to buy more accounting functionality than you actually require.
The rule of thumb is you pay more for that additional functionality in accounting software. If your business growth justifies more advanced accounting features, you can usually upgrade.
5. Accounting Software Versus An Accountant?
In most small business environments, an accounting software package rarely replaces your accountant. You will need professional accounting input from your accountant to ensure your business complies with its legal and statutory accounting and taxation obligations. Accounting software, however, is brilliant at automating routine, every day accounting tasks, enabling your accountant to focus on greater value-added contributions to the business.
One area where small business owners should immediately notice the impact of a good accounting software package is in the ability to automate a standard suite of monthly, quarterly and annual reports. This will transform your ability to leverage the information in your business in order to make more informed financial decisions
Running a successful business is a tough slog as it is, without having to arm wrestle with your accounting books every month. A good accounting software package will enable you to get on top of your Finances without having to spend hours slaving over them manually. The trick is, to select the right accounting software for your business, allowing you to focus on essentials such as goal-setting, growth strategies and business development.