How to Choose Accounting Software That Fits Your Small Business
As a small business owner, it’s good to know exactly where your company stands when it comes to cash flow and profitability. Gone are the days of manual bookkeeping, spreadsheets and hand-written ledgers. With a variety of easy to use accounting software packages available on the market, anyone can maintain their books effectively.
When choosing accounting software for your business, here are several things to consider:
Ask a Professional
Your CPA, financial advisor or business peer may have first hand knowledgeable of the different industry accounting software packages out there. As first hand users, they are better equipped to gauge what software fits your business best. Including your CPA in your software selection is additionally beneficial, as they will also be using the software for tax purposes at year-end.
Ease of Use
Do you and your employees find the software program easy to navigate? Are users able to pick up on its functions fairly quickly? It should be straightforward and provide an overview of your business’ financial health, with reports that show key insights into your business’ performance.
If your business requires that multiple users be able to access the system at one time, you may need a more complex and dynamic program. However, if you don’t need a feature like this, you shouldn’t be paying for it.
Connects to Your Bank Account
Many popular accounting software packages have the ability to import your banking activity, which can potentially eliminate hours of manual data entry. All that remains is for you to categorize each transaction, and even that can be automated for repeat vendors.
Typically you’ll be able to import credit card data as well. This is definitely something to consider, especially if your business deals with multiple credit card types and/or more than one bank account. The greater the volume of transactions the more attractive the direct import function becomes.
Other Tool Integration
Your software must be flexible with other tools you use in your business. Look for software that is compatible with any other business management applications you are currently using. For example, many companies use third party Customer Relationship Management (CRM) software. Can your accounting software and CRM software easily talk to each other?
Look for complimentary software that is easy to use and fits well in your accounting infrastructure. One example is the MasterCard Business Network Expense Reporting Tool. Your employees can easily create and manage expense reports online, attach images of receipts, import transactions from their issued MasterCard credit card, and then submit the expense report for approval. The removal of a manual process, along with the automation of the approval process, makes for a seamless expense reporting system. These can then be batched and entered into your accounting system.
Make sure your software protects all of your data. If you use desktop software, you can typically run a backup program located within the accounting software. This is done independently of your server backup where data files are stored independently. The frequency of the backup is also important, consider daily at a minimum.
Staffing and Knowledge
Does your current bookkeeper know the software you’re planning to purchase? Can you hire someone who knows it? There are a few well-known software packages and many more that are not so well known. Purchasing software programs that are unique and tailored to your business needs could make hiring new employees harder. This leads us back to its ease of use and how user friendly the program is.
Most software providers offer a users manual or support resources on their websites. Providers with a large customer base sometimes have online communities made up of their users collaborating with each other. These communities and online help forums are often a great resource for unique issues that arise while using your software. Be sure that the software you choose offers reasonable customer support options.
Cost varies dramatically from one accounting software package to another. Once you have established the type of software you need, consider your budget options and shop around to find a system that works for you. Remember the old adage, you get what you pay for. That also means you shouldn’t shop for a program that offers all sorts of bells and whistles that you won’t use.
Always consider the following in your budget:
- Account fees – monthly or yearly
- Upgrade fees
- Costs of additional add-on modules
- Annual license fees
- Support fees
- Installation and setup fees – if you can’t set it up yourself
Do a comparison between the technical support packages and other additional fees to determine if it fits in your budget.
Don’t buy what you don’t need. Paying for something that is not useful to you is not cost effective. However, consider your company’s short-term growth. If you feel you’ll use those features later, it’s something to think about. Ask yourself if there’s a software program that suits your company’s growth versus your immediate needs.
Purchasing software to handle your accounting needs is not a decision to be made lightly. Be sure to weigh all your options and make sure that your company’s needs now, and in the immediate future, will be met.