Factors & Tips for Choosing Accounting Software for Business
Today in this article, we will consider some factors for choosing accounting software for business. So, if you are a business owner, and planning to choose the best accounting software for small business then this will be an informative platform for you.
It is very worst to choose software for accounting management, without considering the factors. It may cause a big loss to your company. So here, we have given the detail to examine any accounting software before purchasing it.
But choosing the right accounting software for your business is not an easy task. Every software has its own advantages and disadvantages and most offer multiple pricing strategies to choose from, which also depends on features, the number of users, and some other aspects. You have to consider all the advantages and disadvantages of choosing the accounting software for your business.
3 Important Points to Choose Right Accounting Software
Here are three things to keep in mind when choosing accounting software for your business:
- Price: This is one of the important factors to choose accounting software. Because is directly connected to its features. So, compare the cost first.
- Usability: It’s important to know about usability before purchasing the software. Keep in mind these questions: How many users require to access the software? Do you prefer a cloud-based system that you can easily access anywhere or desktop software? Do you want it to have a mobile application? What capacities do you want the application to have?
- Features: It is essential to know about each and every feature of the software and don’t forget about these questions: What do you want the accounting software to do? Are you looking for both accounts receivable and accounts payable service tools? Which reports do you need to create? Do you want it to track inventory? Do you want it to add ancillary services, such as time tracking, project management, and payroll?
So, these are basics to choose the right accounting software for your business. And now let’s move on to tips.
Top 5 Factors to Consider when Choosing Accounting Software
There are so many accounting software packages available in the market. But with so many choices available, obtaining the right accounting software for your business can be a difficult task. Below are 5 tips to help you obtain the software that will best serve the requirements of your business.
1. Keep Your Budget in Mind
Yes! Keep your budget in mind before purchasing any software. There is many accounting software available that are appropriate for all budgets.
But, the more functional the software is, the more costly it gets, because the user base for specialized software is usually relatively small. There is a simple fact, if you want something special or advance to your business or customized for your company, you should be ready to pay an extra cost.
2. Consider Both Your Requirements And Accounting Skills
Before buying any software make a list of your requirements that is what you want from your accounting software.
Most of the entry-level accounting software will do only the basics such as client records, generate customer invoices and statements, supplier records, bank reconciliation and record, VAT, reporting (key financial reports and aged debt/aged creditor reports).
Apart from the basics functions, if you are looking at advanced features like stock control, foreign currency transactions, purchase order processing, project costing, departmental and cost center analysis. It is important to know that what are the key requirements for you as a business and what is good to be.
3. Data Security
Leave this factor if you are going for offline accounting software. But if you are thinking progressive and considering an online accounting software, then data security is the most important factor to check.
Necessary Information To Check:
- Ask the company how they save the data. In maximum cases, these details will be accessible on their website.
- Check if these services are using an HTTPS connection. It is very easy to check this – you have to simply open the application and check if the URL in the address bar starts with https://. Usually, this is highlighted in green color. You can also check to click on that to see the security certificate. HTTPS protocol assures that the data transferred from your system to the software company’s servers is encrypted and can not be seen by hackers.
4. Talk To Your Accountant
Talk to your accountant is also a good option because they have sufficient knowledge and they understand all business needs. So, if you have an accountant, and they will be supporting you to look after your accounting needs or taking them off you throughout or at the end of the year, talk to them about what software system they use and suggest.
If the software package that satisfies you best is not one your accountant already works, check if an accountant’s version is available from the supplier.
5. Check The Available Features
Make a list of important features that you definitely require in your accounting software. Here is a list of some feature that makes an accounting software best.
- Create purchase orders (PO) and record inventory purchases
- Record-Journal Voucher entries
- Track expenses according to categories
- Maintain inventory, inward-outward stock movements, and wastage
- Perform bank reconciliation by importing the bank transactions
- Create and manage taxes
- Manage a list of clients and vendors
- View account payables and receivables
- Generate invoices and customize the look and feel
- Opening Balance Sheet, Profit, and Loss statement and Trial Balance reports
- Add additional team members
Note: Keep in mind these features before purchasing any accounting software.
Mistakes To Avoid When Choosing Accounting Software
After knows the tips of choosing accounting software, let’s discuss major mistakes to avoid when choosing accounting software. We have done common mistakes to choose the best software package for business which reduces the productivity of our business. So, it’s important to know about these mistakes.
1. Don’t Be Cheap
Everyone wants to save money and time as well as. But for choosing accounting software for your business is a very important task and to handle all accounting and bookkeeping tasks you need the best accounting software that has all the essential features which are required for the business. Obviously, a complete software package is expensive and done all tasks properly. But if you go with cheaper software, you may face error or difficulties to operate features which are not good for your business.
2. Don’t Ignore The Database
It is important to know about the database because of this store all your information. Some vendors limit the quantity of data you can save on their systems, so you will have to change software if your business dramatically grows.
Luckily, most business-class solutions can manage a variety of databases, so it’s necessary to determine whether or not the database and system can work well with one another to maximize your back-end performance.
3. Don’t Neglect the Point-of-Sale (POS)
You will be amazed by how many accounting software don’t offer Point Of Sale (POS) integration. This is a large problem, mainly for brick-and-mortar businesses and restaurants conducting a bunch of small transactions across multiple locations.
The right solution will be capable to automatically collect, build, and synchronize transactions within your accounting software.
4. Don’t Buy On-Premises
If you are awaiting your business to grow, then you do not want to buy a system that totally depends on the support of your data center. With a cloud-based system, you will pay a small fee to increase the demand for the infrastructure of your vendor, but if you want to upgrade your home ecosystem, nothing compares to it.
Now if you can manage to upgrade over the board, or just feel more satisfied housing your data in your own data center, then neglect everything in this sub-section.
So, these are the factors that you need to keep in mind while you are choosing accounting software for your business. As we mentioned above this is not an easy task. Therefore you can consume to make a decision which software is best for you and which suits your budget because these kinds of things don’t change daily.