By Nishi Patel, Northants Accounting
Business owners and professionals alike are critical with essential things like accounting software. They need a tool that can accomplish all their accounting tasks, such as:
- Invoicing and recording payments.
- Tracking expenses.
- Reconciling transactions.
Accounting software should provide insight into the financial health of your business or service. It can also generate reports that can help analyse your business performance based on various factors.
However, selecting the best software can be challenging since there are many apps out there. Fortunately, you can narrow down your selection based on the following criteria:
The cost of accounting software will depend on various factors. However, the cheaper ones often have fewer features and user support. There’s also a significant price difference between cloud-based and licensed software. The former is initially less expensive, but they usually charge a monthly subscription.
While some software also offers multiple plans, high-end software will understandably cost more. Fortunately, paying annually may give you substantial discounts.
However, expensive software often has advanced features such as:
- Inventory, project, sales and expense tracking.
- Recurring invoices and billing.
- Automatic reminders for past-due accounts.
- Advanced reporting capabilities.
- Purchase orders.
Software providers can also offer integration with other programmes. To entice customers, many offer free versions that only contain basic features or a limited number of users or transactions. Others provide their software free of charge. You only pay for add-on services. However, such programmes are only suitable for small businesses or if you want to test them thoroughly first.
In the end, your budget can help you decide which software to use for the office.
Consider how and where to use the software and how many people need access using following factors:
Software apps, especially the cloud-based varieties, allow for more than one user. This is helpful if you intend to grant access and control of the system and data to all partners and accountants.
Meanwhile, you can provide employees with limited access, such as tracking customers’ invoices. Some providers will allow:
- Multiple users with additional costs.
- Free access provided you subscribe to a higher-priced plan.
- Adding new users to the system for a fee.
- Multi-business support
There are also software providers who offer one single account for people who own multiple businesses. Depending on the vendor, you can have it at no extra cost.
- Cloud-based and mobile-friendly
Almost every popular accounting programme used today is cloud-based. It allows users to access their accounts when or where they need the data. With internet access, you can do business at the office, home or even on holiday.
Most of these cloud-based programmes also allow you to download a mobile app version. It’s a convenient way to monitor and accomplish vital operations while on the go. Some providers provide separate apps but with limited features for your employees. They can use it for time tracking or expense receipt submission.
However, not all accounting apps have the same capabilities. So ensure that the one you pick has the feature or functionality your business needs. Also, consider the platform of the mobile app. Is it compatible with the one your business is using? If not, you may have to look for another app or use its platform.
One of the most popular cloud-based accounting software apps that also has a mobile app is Xero. It’s subscription-based software you can use for business expenses, inventory, invoicing, taxes and payroll. It’s also available for Androids and iPhones. You can read this article from Northants Accounting to find out more about its features and capabilities.
Many accounting programmes have all the bells and whistles for managing your finance. However, it’s essential to choose one that will answer all your business requirements or make your accounting task easier. Also, choose the software that allows you to see the ‘big picture’ relating to your business performance.
- Basic accounting
Many small business owners are content with programmes that offer basic features such as:
- Customer management.
- Financial report generation.
- Income and expense tracking.
However, once you have several partners and accountants on board, you’ll need reliable software that can track everyone’s time and billable hours.
You can set some accounting programmes to:
- Automatically send past-due notifications and recurring invoices. This will save you time on your invoicing and accounts receivable jobs.
- Reconcile your accounts using suggested transaction matches.
- Convert documents to invoices for quotes or estimates.
- Reorder products by creating purchase orders once the items go below a certain number.
- Preparing taxes
Software that can make an accountant’s life easier with tax computation is highly valued. It should have features such as:
- Automatic tax calculations.
- Multiple tax rates.
- Tax reporting.
If someone else is doing your taxes, they should have access to your relevant data. Alternatively, you can email them the essential files and information.
Pay attention to extra services. Features such as payment processing or payroll service will incur additional costs. However, they can make your work easier, and the costs are probably lower than getting them elsewhere.
- Integrating third-party apps
With the various financial software apps used by business today, you’ll want accounting software that can integrate with your existing programmes, for example, automatically share data in real time.
Criteria for selecting suitable accounting software
Okay, so you now have two or three pieces of software to choose from and have tested them during the free trial periods. What’s next?
Here are several questions that can help you choose the accounting software suitable for your business:
- Is the software accepted in your industry?
- Can the provider offer a customised solution for your business?
- How many users can the software accommodate?
- Is the software compliant with accounting and tax laws and financial regulations?
Depending on your business and industry, you can formulate questions designed to check the suitability of the software.
Accounting software apps are powerful tools for your business and services. However, not all of them are the same or created equal. It’s also possible that your business has specific requirements that many programmes can’t accommodate. In such situations, an accountant is the best person to help you. As a finance professional, they can provide an educated opinion on the software that your business needs. They can also help set up the programme.
Nishi Patel started Northants Accounting after a successful corporate career as a management accountant and financial analyst.