There are many accounting software suitable for small businesses. And, at first glance, all these packages seem to have the same functionality. So how do you decide which accounting software will be best for your business? Don’t jump right in and buy the first accounting package you see with a name you recognize. Take a look at this list of factors to consider first. Here are twelve things to consider when looking for accounting software for a small business.
1. General functionality
Start your research by writing down a list of basic features you will need. Would you like to increase purchase orders, for example? Will you hold a stock of raw materials, parts or finished products? All good accounting systems will help you keep basic accounting records. However, they can vary greatly in other types of functionality.
2. Industry specific functionality
Certain types of businesses have specific requirements. A website developer may need a project cost to track the profitability of projects. An e-commerce business may need accounting software that integrates with e-commerce software. So don’t limit your search to only well-known general accounting software packages. It will also be worth searching online for industry-specific packages.
3. Multi-currency functionality
If you often post transactions in other currencies, you will need multi-currency functionality. This will allow you to record transactions in both the foreign currency and your home currency. If you hold assets and liabilities in other currencies, you will also need to be able to perform currency revaluations. Foreign currency functionality is often not available in standard small business accounting systems. So if you use a lot of different currencies, make sure the software you buy has multi-currency functionality.
4. Cloud or Desktop?
Cloud-based accounting software is becoming the norm. It provides easy access to your accounting system wherever you are. It also allows you to give other people access to your accounts, such as an accountant or your accountant. The downside of cloud-based software is that you need internet access. So no internet access, no access to your accounts. This is worth keeping in mind if your internet connection is unreliable.
5. Bank compatibility
Most of the best accounting packages will allow integration with your bank. This integration will allow you to download transactions from your bank. Then you can complete your bank reconciliations. If you automate your bank reconciliations in this way, it will save you a lot of time. To be able to do this, however, your accounting software will need to be compatible with your bank’s software.
If you expect your business to grow, you’ll need an accounting system that can grow with it. Business growth will lead to an increase in transaction volume. This will also lead to the need for a multi-user accounting system. Higher transaction volumes may also warrant the use of additional software features. It is therefore a good idea to check the upgrades you will need to be able to cope with the future expansion of your business. And, you should also check how much these upgrades are going to cost.
7. User Security Options
If you’re planning for significant business growth, you’ll need to consider user security. You will need to be able to define what each user can see and do on your accounting system. This type of security goes far beyond simple read and write security. When multiple people use the software, you also need to have role-based security.
8. Ease of use
Most modern small business accounting packages are easy to use. Some, however, need more accounting and technical know-how than others. Accounting software should make your life easier, not harder. So, try a software demo and read customer reviews before buying accounting software.
9. Customer Support
Customer support is a key factor when choosing software for your business. You will need training and support when you start using a new accounting system. You will also need ongoing support. Check what type of support and training is available and check when support is available. Monday-Friday support won’t help you if you usually update your accounts over the weekend.
Check which standard reports are available with the system. Most accounting software will have a report writer. Even so, writing reports from scratch takes time. A package that includes a full suite of standard reports will save you a lot of time. You will be able to write your own custom reports as you become more familiar with the system.
11. What your accountant recommends
Ask your accountant if he recommends accounting software. If your accountant is familiar with the software you are using, they may be able to help you set it up and use it. Familiarity will also make it easier for your accountant to find the information they need in your accounts. Thus, this should reduce your accountant’s costs.
Cloud-based online accounting software is not very expensive. It is usually available for a modest monthly fee. The price you pay will depend on factors such as functionality and number of users. Some plans are also priced based on transaction volume. Think about what you will need in the future as well as what you need now. You can modify your accounting software if you leave it. But it’s usually much easier and cheaper to upgrade a system than to replace it.
The main takeaway from this article is that you shouldn’t rush into buying accounting software. Systems like QuickBooks, Xero, and Sage may all look the same, but they don’t all have the same functionality. If you buy the wrong accounting software, you won’t just be wasting your money. You will also have wasted a lot of your time. And, when you’re running a small business, your time is one of the most valuable limited resources you have.
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