Choosing The Right Accounting Software For Your Business

Choosing the right accounting software is important for all businesses, but there are two main problems. Firstly, you are an expert in your field of business, not on accounting practices and software. Secondly, you are faced with a huge number of options from software names that you know, and those that you have never heard of before.

Accounting Software

This guide is not about recommending a particular accounting software application as every business has different needs – what is right for one business might not be right for yours. Instead this guide will help you narrow down the choices by highlighting what you should look out for.

Do You Need Accounting Software?

Some businesses still use hand written accounts, although this is becoming increasingly rare. Using spreadsheets is an option for some businesses but there are circumstances when you should upgrade to accounting software:

  • Your business is growing
  • Your existing system is becoming complicated, time consuming and unwieldy
  • You need to ensure your business adheres to legislation
  • You want a more efficient system
  • You need more reports to help you run your business and plan for the future
  • You are starting a new business – it is always important to start as you mean to go on

For some businesses, having good accounting software in place is the difference between making profit and not.

Your Needs

Before you start looking at software you need to consider the needs of your business. For example, what do you want the accounting software to do? Most will do the basic functions of accounts, but if you want features like foreign currency transactions, stock control or purchase order processing, you might need something more specialised.

You should also talk to your accountant before making any decision. They will know many of the main accounting platforms available, and will be able to offer advice.

Talking to your staff is important too. This particularly applies to the people who will be using the accounting software – what is their level of skill, how much training will they need, have they previous experience of certain brands, etc. You should also include your IT staff in the conversation.

Types Of Accounting Software

You will find many different types of accounting software packages available, but in general they fall into four main categories:

  • Free programmes – be wary of these as they usually do not provide all of the features you will need. You will have to upgrade to get these features, and may end up with a solution that is unsuitable.
  • Small business accounting and payroll solutions – these are designed to do standard business accounting tasks such as keep customer and supplier records, create invoices, perform bank reconciliations, and process VAT.
  • Advanced accounting and business management solutions – these include additional features that your business might require, and are often more expensive.
  • Web hosted applications – web-based software applications are becoming increasingly popular. They often offer savings plus there are fewer IT equipment requirements.

Other Things To Consider

  • Legislation – is there legislation that governs the way your business must do its accounts?
  • Integration – does the solution have to integrate with other packages and systems?
  • Cost – make sure you get a solution that is cost effective, but remember that cost is about return on investment – for example, will you save more in resources by using the software than it costs you to buy it?
  • Paying – it may make sense for you to spread the cost of your software over time, or get a discount for paying up front.
  • Backups and security – make sure there is sufficient security and backup procedures in whatever solution you choose

Finally, it is important to spend sufficient time making the decision on new accounting software, as getting it right will be hugely beneficial.

Posted in Accounting, Information Technology.