Choosing an accounting software doesn’t have to be complicated. Here are three questions to focus on when selecting one for your business:
- How much are you willing to pay?
- Why do you need accounting software?
- Which features does your business require in an accounting software program?
How much are you willing to pay?
Accounting software products vary in cost, depending on the features you choose. Most providers also use subscription models for different types of packages, and some offer free versions with basic functionalities or limits on the number of users and clients.
Paid packages range anywhere from less than $10 per month to roughly $40 per month. Features that add to costs include expense tracking, sales tracking, recurring invoices, automatic past-due billing, team functionalities, payroll services, advanced reporting capabilities and company branding.
Why do you need accounting software?
To find the best accounting software for your business, the first step is to figure out the primary reasons why you need one in the first place. For some businesses, using spreadsheets, or even handwritten ledgers, will do. For most, however, the ease and efficiency of accounting software make it the better choice.
Here are some factors to consider:
- You’re just starting out. Using accounting software right from the start sets your business up for success down the line. It’s far more beneficial to begin using accounting software from the first day than to implement one after months, or even years, of using spreadsheets or handwritten ledgers.
- Your business is growing. If you plan to expand your business, or if your business is quickly growing, a manual accounting system becomes inefficient and complicated. If you use accounting software, it can save your growing business tons of time and money by automating processes and being highly scalable to your business’ size.
- You want immediate, on-demand access. Think accounting software is just about the numbers? On the contrary, this software gives you an easily accessible database of both financial and customer information. You can even include all types of details about clients and vendors, such as contact information, purchase histories and credit terms.
- You want to streamline your operations. By performing tasks ranging from payroll to day-to-day transactions, accounting software can integrate all parts of your operations and automatically input data from other systems, such as your enterprise resource planning (ERP) system, point-of-sale (POS) system, customer relationship management (CRM) system and other third-party solutions. Accounting software can also link your bank accounts and credit cards to automatically track expenses and update your books.
- Your current system is too complicated. Not all accounting systems are made the same. For small businesses, some of the mainstream accounting systems are too complex and packed with unnecessary features. If the software you currently have is too complex, a solution made specifically for small businesses is a much better option.
- You want to make sure you comply with all laws and regulations. Don’t know anything about generally accepted accounting principles (GAAP), tax laws or other financial regulations? Many accounting software programs do the legwork for you and can guide you to ensure compliance. You can’t get that with spreadsheets or by doing everything by hand.
Which features does your small business need in an accounting software?
Accounting software offers a bevy of technical functions and capabilities to help you manage your finances. However, many of the business owners we spoke with said that ease of use and time savings are two of the top features they look for in an accounting software solution.
“For me, perfect accounting software is easy to use,” said Christopher Pabon, founder of Simple Tree LLC, an app development company. “I’m happy with anything that makes my life easier and saves me time.”
Accounting software should also be able to cater to your business’s needs, to help you see the big picture. Michelle Devereux, owner of Back Office Support Services (BOSS), an ERP company that helps businesses manage their finances, said tailoring solutions to a client’s unique needs helps the client better understand its business and plan for the future.
Here are some of the features accounting software should offer to help you save time and better manage your finances:
- Basic accounting tasks. Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), income and expense tracking, financial report generation, and client and vendor management.
- Automation. Things like automatic billing, recurring payments, past-due notifications and other automated processes save you time because you will not have to manually do them yourself.
- Quote and estimate creation. Use customized, premade templates to create quotes and estimates for clients; then automatically convert them into invoices.
- Tax preparation. Make both your life and your accountant’s life easier with accounting software that can help you with your taxes. Features include automatic tax calculations, multiple tax rates and tax reporting, and the ability to instantly email all necessary data and files to your accountant at the click of a button.
- Multiuser access. Most accounting software products give access to multiple users (e.g., you and your accountant), so you don’t have to do everything on your own.
- Payroll processing. Enter time sheets, calculate pay, print checks and pay your employees — without all the legwork.
- Mobile access. Use your accounting software anytime, anywhere on your mobile phone or tablet. This is particularly useful for business owners who are always on the go and are too busy to sit down and manage the books at a computer.
- Third-party integration. Accounting software can make it easier to run your business by integrating and automatically inputting real-time data from apps and tools you use the most. This includes POS systems, inventory, e-commerce, ERP, credit card processing, CRM and Google apps.
Accounting software also offers a wide range of additional benefits for small businesses, simply because it makes it easier to run a business. Here’s what some business owners said they love most about their accounting software:
- All-in-one solution. Peter Geisheker, CEO of The Geisheker Group Marketing Firm, said his favorite accounting software is an all-in-one solution that provides everything a small business needs: affordability, ease of use, credit card processing and more. It also lets his accountant monitor transactions.
- Simple interface. Patrick Cullen, founder and CEO of Panda Bear Linens, said a simple look and feel and the ease of use of his accounting software take away the frustrations and complexities of bookkeeping.
- Less stress. Ryan Ireland, founder of e-learning company Mijingo, said that managing a business’s finances is difficult enough as it is, so it’s important to have an accounting software that alleviates that stress instead of adding to it.
- Tracking capabilities. In addition to tracking expenses, Darren Davis, CEO of LinkCaffeine.com, found that the ability to track when a client has viewed email invoices takes the mystery out of whether the invoice has reached the customer. This is particularly useful when a bill is past due, he said.
- Accountant access. Ian Lamont, founder of i30 Media Corp., chose his accounting software because it’s the one most accountants use and recommend, thus making finance management easier for everyone.
- Do-it-yourself solution. Ian Aronovich, president and co-founder of GovernmentAuctions.org, said his accounting software can perform a range of tasks, including tracking expenses, automating invoicing and billing, organizing tax and banking information, and providing payroll services. As a result, he doesn’t need to hire a full-time bookkeeper to manage the company’s finances and pay his employees.
- Less clutter. If you have accounting software, you don’t need to keep piles of paperwork everywhere. For example, Mike Wolfe, co-founder and CEO of WAM Enterprises, found that his accounting software’s mobile app makes it easy to add receipts to expenses simply by taking a picture.
- At-a-glance dashboards. Carrie Enders, vice president of front office at RE Suspensions, said she loves her accounting software’s dashboard, which provides a snapshot of how the business is doing every morning and lets her add customized modules to fit the business’s needs.
- Real-time data. Accounting software updates data in real time and thus eliminates the need to manually input financial information. Nicole Wolfgram, founder of NV Blues, loves the reconciliation feature on her accounting software that keeps her up to date on the company’s finances.
Choosing the right accounting software
To find the right accounting software for your business, ask potential vendors the following questions:
- Is your software built for small businesses?
- Is your software a good fit for my industry?
- Do you offer customized solutions to fit my business’s needs?
- How many employees and clients can your software accommodate?
- How can your software help me comply with GAAP, tax laws and financial regulations?
- How is my data backed up? Can access be restored immediately during an outage?
- What security measures do you have in place to keep both my business’s and my customers’ data secure?
- What is the total cost? Are there any setup or cloud storage fees?
- What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)
Written by: Sara Angeles – Business News Daily