10 Factors to consider when choosing accounting software
Choosing the right accounting software for your small business can be difficult. Choices abound, and it’s easy to make the wrong choice if you don’t know what to look for.
In this guide, we’ve put together ten key considerations that will help you find the best accounting software for your needs.
We cover everything from price and compatibility to security, ease of use and customer support – so whatever your priorities are, there should be something here to suit you.
10 Factors to Consider when Choosing Accounting Software
Here are our top factors to consider when choosing the best accounting package for your small business.
1. Accounting Software Features
When choosing accounting software, it’s essential to consider the offered features. Some software provides basic features, while others offer more advanced options. Here are some of the vital features to look for:
Stock or Inventory Management
Tracking stock is essential for ensuring that the business is running smoothly. Not only does it help to keep track of what items are being sold, but it also allows you to keep an eye on inventory levels and make sure that there is always enough stock on hand.
Fortunately, many accounting software packages include features for tracking stock and inventory. This can make life a lot easier for small business owners, as they can manage everything from one central location.
If your small business needs to track stock and inventory, make sure to look for an accounting solution that includes this functionality. It will make your life a lot easier in the long run!
Payroll
Many small businesses need to employ staff, which comes the additional payroll cost. When making your choice, make sure to consider whether or not the software offers payroll features.
If you’re looking for an accounting package that includes payroll features, you’ll find that it’s a lot easier to manage everything from one central location. It can save you time and money in the long run, as you won’t need to hire a separate payroll specialist.
Accounts Receivable
Accounts receivable is essential for ensuring that the cash flow continues to operate smoothly. It allows you to keep track of money owing to you and your clients’ creditworthiness.
With invoicing, it’s essential to make sure that you have a good template that will make your life easier. Many accounting software packages include templates that are ready to use, making the process of creating invoices quick and easy.
One of the advantages of using accounting business software is that you can accept credit card payments online, which is convenient for customers and allows you to get paid quicker.
Accounts Payable
Small business owners need to be vigilant when tracking accounts payable, as this is an essential part of ensuring that the business is running smoothly. One way to do this is to enter bills into the accounting software as soon as they are received so that you can keep track of payments that need to be made. An easy way of doing it is by using software with automatic data entry by scanning the bill.
Another important task for small business owners is paying their suppliers on time. This can help build good relationships with suppliers, and it also allows you to avoid late payment penalties. Good accounting software makes it easier to track suppliers and when to make payments.
Business Expenses
Accounting software can be a lifesaver when it comes to tracking business expenses. Not only does it allow you to keep track of mileage and parking expenses, but it also allows you to keep track of other types of expenses, such as credit card payments and office supplies.
One of the advantages of using an accounting system is that you can easily import data into the software. This means that you can quickly and easily keep track of all your business expenses.
Time tracking
When it comes to small businesses, time tracking is essential for ensuring that the company is running smoothly. Not only does it allow you to keep track of how many hours have been worked, but it also allows you to know how many hours to invoice a client.
Fortunately, many accounting software packages include features for time tracking. It can make life a lot easier for small business owners to manage everything from one central location.
Reports
One of the most important aspects of using accounting software is good reporting features. It allows you to track the financial health of your business, and it also allows you to keep an eye on your business trends.
Good reporting features include generating balance sheets, profit and loss statements, and cash flow forecasts. It allows you to get a complete picture of your business’s financial health, and it also allows you to make sound financial decisions for the future of your business.
Multiple Locations
When a business has multiple locations or departments, it is essential to track income and expenses by department. It allows the business to see which departments are making a profit and which ones are not. It can also help the company decide where to allocate its resources.
One way of tracking income and expenses by the department is by using an accounting system. This software allows you to keep track of all your business finances in one place. It also allows you to generate reports showing department income and expenses.
2. How Many Users
The number of users can often determine the cost involved. Some software, like QuickBooks, has a limited number of users, while Xero is unlimited. This can be an important consideration for small businesses, as they need to make sure that everyone who needs access to the software can have it.
Most accounting solutions will allow you to invite an accountant or bookkeeper as part of the price plan.
3. Does it have a Good App?
With the increase of people using mobile devices, the accounting system must have a good app. It allows people to complete tasks such as invoicing on the go, checking figures and sending out reminders.
Good apps should be easy to use and should have a user-friendly interface. They should also be able to sync with the software on the computer so that data can be easily transferred back and forth.
4. Desktop or Cloud accounting Software
There are two main types of accounting software: online accounting software and desktop software. Online accounting software is cloud-based, which is stored on the internet. This type of software is ideal as it is always up to date, it can be accessed from anywhere, and you can share information.
On the other hand, desktop accounting software is installed on a single computer. This type of software is ideal for businesses with only one location or a bad internet connection. There are a few options for buying accounting software, including eBay and bookkeeping templates.
5. User-Friendly Software
One thing to look out for is a good user interface that is easy to use. This means that the software should be intuitive and it should be easy to navigate. The dashboard should also be easy to understand, as this is where users will go to get an overview of their financial situation.
The dashboard should include information such as the total income, total expenses, Profit and Loss statement and balance sheet. It should also show how much money is in the bank and how much money is owed to creditors.
6. Data Security
The accounting data must be secure in all business software. This means that the software should have features that protect your data from being accessed by unauthorized users. It should also have features that protect your data from being lost or corrupted.
The best way to protect your data is by using cloud-based accounting software. This type of software is stored on the internet, safe and secure. The data is also backed up regularly, so you can rest assured that your data will not be lost.
7. Pricing
The cost can vary depending on the type of software and the number of users. It is important to consider what features you need and what kind of software you want. If you are looking for cloud-based accounting software, then Quickbooks or FreshBooks are excellent options.
Some packages are free, but most have a monthly or annual fee. Check for any additional costs; some charge more for payroll, bank feeds, additional users, additional features, or you need to upgrade to an additional pricing plan.
8. Experience
It is worth considering the users’ experience; it might save a lot of time if an employee has already got experience. Speak to your staff to find out if they have used the software before. If some of your team are new to using accounting software, you may need to choose something more user-friendly.
The other option is to take out a free trial; most offer 30 days and then a discount for the first few months.
9. Customer Support Offered
It is important to consider the customer support offered, including online chat, telephone calls, emails, videos, and Facebook groups. Some software packages like Ember have accountant support but at a higher cost.
The best way to get help is by using online chat or a phone call. This allows you to speak to a customer service representative directly. They will be able to help you with any problems you are having, and they will guide you through the software.
10. Integration with other Apps
It is important that it integrates with other business software apps when it comes to accounting software. This allows you to connect your accounting software with your business applications. It makes it easier to manage your finances and your business.
Some of the best software providers integrate with various apps, including Xero and Zoho Books.
Conclusion on Factors to Consider when Choosing Accounting Software
Choosing the right accounting software package can be complicated with so many different software providers, but there are many factors to consider. Whether you’re trying to find an online or desktop-based solution or looking for a specific type of feature, we hope that these 10 tips have helped guide your decision.
Choosing cloud-based software will give you access to all of the latest features and updates while giving your data more protection than other options may offer.
