10 Factors to Consider Before Selecting Accounting Software
When you have a business of your own, only you know the responsibilities and tasks that come along. And most businesses don’t want to spend much on the additional software for basic accounting tasks as they have a team working on the same.
This, however, is the difference between a normal and smart business. The smart ones spend on quick work rather than toil hard unnecessarily.
Buying the best accounting software is not an easy task for the business owners and it needs actual efforts. It is a bit confusing as there are thousands of accounting software available in the market that has different specifications and USPs. You must choose one that suits your business needs so that you don’t regret it later.
These are the factors that you need to consider before buying one.
1 Offline or Online
The first thing to do is to analyze your requirements. You need to consider whether you need to have desktop/ offline software or online software. Most businesses use online cloud solutions for their accounting issues. The major reason to go for cloud accounting is the provision of better advantages than offline solutions.
When you use an offline system, you have to deal with manual tasks. Also, you are restricted to remote working. However, when you go for cloud or online solutions, you do not require installing the application every time on your desktop. You can operate on any device and there is no need to worry about updates.
Nevertheless, when you prefer the cloud, it opens the door to benefits like these.
Need to stress about security
Hosting providers ensure multi-layer security
They provide automatic backup for all the files and data
The small business accounting software application is hosted on the cloud to have additional benefits. These benefits include remote access and integration with other cloud-based applications to make the tasks easy for you while saving time.
2 Software Features
The features of software speak a lot about its functionality. The more features the software has, the better is the productivity. There are various software like Zoho Books and QuickBooks Online that have the vital features to meet all the accounting needs.
The cloud-based software tends to have more features compared to the offline ones. For better accounting practices, you can opt for the one pertaining to all the features required for your business needs.
Here are some of the features to consider in your accounting software:
Create and track invoices
Manage bank accounts and transactions
Perform bank reconciliations
Manage and record inventory
Keep a record of customers and account variables
Create tax reports and manage tax
Have multi-currency transactions support
Offer access and manage efficiently multiple team projects
3 The Overall Expense and Hidden Costs
Before you go about picking the best software, make certain to plan a budget. You must know the amount that you are ready to spend on the software. Sometimes, the hosting providers may charge an extra amount for similar functions. Also, there are cases when you end up not closing the deal very well.
Spending unnecessarily on the software and later paying extra for maintenance can be a wastage of finances. In case you failed to choose the right one, you have to get add-ons for the required features.
To avoid this, make sure that you know about the hidden costs and avoid any kind of extra charges once you buy the software.
4 Complexity and User Interface
One of the major factors to consider before buying an accounting software is the selection of user interface. Before you buy one, you should make sure that the software is easy to use.
Most of the time, small businesses hire accountants who know less about the purchased accounting software. To avoid such cash flow, one should select software that is easy to understand and can be handled by everybody.
It is wise to use a software that has a better user interface and has limited features. It’s a wise decision to go for software with better usability and less complex features.
Most of the businesses work according to the number of employees and user collaboration. To have better collaboration, you should choose software that can handle multiple user access along with managing other accounting tasks and accounting programs.
Whether it is finance, accounts, bookkeeping or billing, the software should have features that allow multiple users to collaboratively perform the tasks.
To select an accounting software you must look for basic features like:
Purchase and order
But something that actually separates a basic accounting software from the best one is customer support. This reduces the risk of data breach or dereliction. A huge number of software don’t have excellent customer support and are cheap but considering them is no good.
All software requires support at some time and you have to contact the customer support team for any kind of dysfunction. So, you should make sure to check the post-sale support of the software you are buying.
Almost all accounting software looks best at first. Most of the businesses mistake buying software that meets their requirements at present but regrets later when the business needs a subtle makeover. You cannot purchase new software with changing trends or requirements.
To avoid such mishappenings, you must purchase software that is scalable and meet your business’s additional needs.
Also, you need to make sure of these factors:
Before you choose any software, ensure its scalability
The software should definitely meet the specific business needs
Analyze and make sure that you do not require frequent shifting from one software to another
There are various software categorized on different versions and editions. Some are catered according to your business needs. Go for software that has feature-rich versions that can be used in the future as well as now.
8 Time-saving Automation
Relying on software to carry your accounting tasks is a great advantage. A software that has time-saving automation is a four-leaf clover for the businesses.
Almost 75% of marketers say that they use at least one type of marketing automation tool in their business. Not only this, but an additional 21% of the marketers agree to use more automation tools in the future. So, try having an application that can automatically perform several tasks.
For example, an efficient software can automatically send invoices and notifications and perform transactions. If you require sending customers financial quotes or estimates, the software can do it without any manual support. The more your work is automatically done, the more you can save time and be productive.
9 Exit Strategies
Sometimes, the software you bought can malfunction or the company you chose shuts down. What can you do to avail the best in this case? That’s why it is recommended to have a backup plan in case of any emergency.
One needs to remember that to safe keep your data, exit strategies are important. To avoid losing essential data and confidential information, buy accounting software that has a data export facility.
You should practice keeping all your files copied somewhere or make excel sheets holding all the important transactions and accounting tasks. Keep the data backed up in any device to avoid cases like these.
10 Data Security
If you choose an online software solution or you go for an offline one, your prior concern should be data security. When you prefer cloud solutions, make sure that you know every aspect of the data security program that your hosting provider offers.
Info-security states 87% of the cyber breaches occur due to user errors. Also, phishing is one of the primary causes of breaches in 2019 with a total of 45% recorded cases.
Cloud solutions like AI and IoT make sure that the user’s data is fully protected and no attacker could harm it. Ask if the hosting provider ensures keeping your data safe on their own.
Make sure to ask how they do it and what are their recovery or disaster management plans. Have a look at their HTTPS connection and all other cyber-security options. Overall, do check all of their security measures and policies before signing for one.
What to do next?
Once you consider all these factors, you still need to be a hundred percent sure about buying the product. For better knowledge about the software, you can talk to somebody who already bought the same software or so using the software.
The best case is to consult an accountant who is an experienced user. Go for a trial period and use the software while looking at all its features and functionalities. Now you are all set to indulge the software into your business and use it for all your accounting needs.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2020 Rupinder Kaur