One of the key tools every small business owner should consider buying is accounting software. Not only does it decrease cost and time in preparing financial information, it can also be used by businesses to instantly generate reports for decision-making.
Choosing accounting software is an important decision for small businesses since choosing wrong would mean losing money, productivity and business opportunities due to time spent learning and implementing the system. Here are some guidelines to follow when evaluating different accounting software packages in the market:
Most accounting software can be had for a one-time fee, while some charge yearly or monthly. There are free accounting software but these packages usually lack support and various updates that paid programs provide. Similarly, open source accounting software must be altered to fit the specific needs of a business; which translates to hiring specialists to modify the program and, in some cases, maintain it for the company.
You shouldn’t base your purchasing decision on cost alone. We all want to get the most value out of our money but this doesn’t necessarily mean that the cheapest software will give you the most value. It might make sense to pay a premium for accounting software that better suits your needs.
2. Ease of Use
An easy-to-use system is ideal for small business owners since every bit of time spent on accounting is time that could have been spent running or growing the business.
Simpler systems will most likely have a low learning curve, and the faster you learn how to use a software package, the faster you gain the benefits from use. Complicated systems are also prone to user mistakes and if they’re not corrected, any reports and documents generated would not be accurate.
A simple single-entry system (as opposed to double-entry, otherwise known as full general ledger) will suffice for the vast majority of small businesses. This will allow you to do your bookkeeping in-house and hire a CPA, Chartered Accountant or accounting firm to produce your end of year financial statements.
3. Other Features and Reporting Capabilities
Depending on your needs, advanced features and reporting capabilities can save you countless hours. Some accounting software may offer advanced features such as automatic payroll calculations, invoicing and stock management features. Reports produced by the system allow you to quickly assess your bank accounts and give you financial insights into your business to help with decision-making.
These features maybe bundled in, sold as an upgrade or provided as add-on modules to the original system. A modularized system is ideal for businesses that don’t need a particular feature now, but may do so as their company grows. Having all available features may seem nice but these things will most likely cost more. Determine your needs beforehand so that you don’t end up paying for features or add-ons you won’t use.
4. Support and Program Updates
Computer and software error can happen when you least expect, so it’s good to know you can contact someone to resolve your issue. Personal and timely support provided by people skilled in the particular software package can be invaluable, saving time, money and stress. Ideally, support offered should be more than a simple knowledge base and email. Knowing you can pick up the phone and talk to someone is important. Some companies even provide webinars and face-to-face training sessions to help you master their software.
Program updates are important to fix unforeseen bugs and provide new features. Support and updates are generally considered as a premium service by the industry. Most companies usually offer per-year or per-month subscriptions to support and update programs while others may also utilize a pay-as-you go model.
As you embark on your search for the right accounting software, remember to spend time determining your business needs. Take advantage of the various ‘free trial’ offers. Ask questions of the software provider get a feel for the extent of their support. This will allow you to effectively evaluate different software first-hand before committing your business’ time and money to a particular product.
Grant Hewson is managing director at Accomplish Global. Accomplish Cash Manager is small business accounting software that allows business owners to focus on their businesses. You can download a free trial here.