Choosing the right accounting software saves time and money. It reduces the risk of error and makes it easier to understand your business finances. Good business accounting software is also designed for people who are not professional accountants and should be easy to use.
Why use accounting software for your business?
There is some basic accounting software that is cheap and fairly easy to use while still performing well. However, unless your business processes less than ten transactions per month, accounting software will certainly save you time and money.
Accounting software facilitates many accounting tasks
Accounting is simplified and automated. For example, take a current operation in the activity of your company. When you enter an order, the software automatically updates your inventory levels and customer records. You can also automatically translate the order into a sales invoice. The software also speeds up the verification of bank statements, VAT returns, monthly management accounts.
Finally, most of the software supports online banking and online tax reporting and offers optional features to help you manage payroll.
Accounting software provides real-time management reports
With dashboards, you can quickly see who owes you money, or check your bank account balance or how much VAT you owe.
With the software, you can manage your balance sheet, profit and loss or cash flow reports, or view performance against budget. Some software even allows you to estimate the profitability of a particular job.
The software facilitates the preparation of your annual accounts or an audit
It allows data to be shared with your accountant, associates or shareholders and used in different ways
Identify your needs in terms of functionality
Before you buy specific accounting software, think about what you want to do with it and how it can help your business. Being clear about your priorities helps you assess the different software available.
Think about your business goals
You can plan to open new stores, you plan to increase your turnover by 10%, etc. Choose accounting software that includes features that can help you achieve these goals.
Who is going to use the software?
Future users of the software should have a say in your choice. Also involve your accountant who will advise you and ensure that the software you choose is compatible with his and will allow the exchange of documents and information.
What management information is essential for the management of your business?
Accounting software isn't just about complying with the law. It is also intended to provide information to help you manage your business and make decisions.
Your accountant or consultant may be able to use this data to identify areas for improvement for your business.
Can the software handle all the accounting tasks you need?
Accounting software should help you with day-to-day financial tasks, including:
- sales, invoicing and receipts;
- purchases and payments;
- banking and cash management;
- VAT, taxes and accounts;
- inventory control and payroll.
Pay attention to the specific needs of your business. For example, if you run an online business, the software should integrate with your ecommerce solution or if you buy and sell in different countries, you need software that can automatically convert currencies using the correct exchange rate.
Pay attention to ease of use and ergonomics
These days accounting software is powerful but is designed so that you can easily learn about it and access and understand the main features.
Can the software interface adapt to your needs?
These are the details you should pay attention to:
- The possibility of adding new fields and controls, such as the identity of customers who order for example
- The option to set default values for fields.
- The option to set a range of values.
- The possibility of customizing documents and screens to adapt them to your graphic charter.
Can you freely and easily import and export information provided by the software?
Make sure that the software allows you to import data and export it freely so that you can change the software if necessary or communicate it to a third party (consultant, auditor, accountant, etc.).
Can you use the software anywhere?
Cloud accounting software can be accessed by connecting to the Internet. You don't have any software to install on your computer. It usually offers mobile and tablet applications. So you can check your numbers and perform financial tasks from almost anywhere, as long as you have an Internet connection.
The options and costs
Many good accounting software is inexpensive but can incur additional costs when setting up the system and training your employees in its use.
Cloud or desktop accounting software?
Cloud accounting software is often the best option for small businesses. The cloud software is accessible over the Internet and runs on a server operated by another company. It offers great flexibility and usually offers a monthly subscription with different pricing levels depending on the features and the number of users.
There are no upfront costs to plan and the management costs are lower because the supplier takes care of the infrastructure and technical support.
The data is stored securely by the software provider, accessible from anywhere and anytime. This makes it easier to work with your accountant or advisers. However, make sure that the cloud provider encrypts your data and backs it up regularly.
The most popular packages include Sage One, Intuit QuickBooks Online, Xero, Freshbooks, KashFlow, and FreeAgent.
Workstation-based and server-based packages are generally more complicated to use and set up. Desktop accounting software is installed on your computer and all your data is stored there, so all accounting data is kept within your company.
Server-based software runs on a central server in your company, so it can be accessed by multiple people at the same time. Large organizations that have the resources to configure and manage software, access levels, security, and backups often make this choice.
Popular packages include Sage One and Mamut One Office accounts.
Add-ons or modules
Some features are not offered in the basic subscription of your accounting software but can be added in the form of modules. Your software can then provide functions like payroll, login to your e-commerce system, etc.
Maintenance and support
Maintenance and support are key aspects to consider when purchasing software. You may need to pay an annual fee for continued technical support and to update the software from time to time.
If you opt for cloud software, the monthly fee usually includes ongoing updates and support.
If necessary, get advice from someone who understands your business needs and the capabilities of different software packages. Most accountants can advise companies on which software to choose, but seek independent advice if there is any doubt about a conflict of interest.