Tuesday, 2 January 2018

8 Things to Consider Before Choosing Small Business Accounting Software

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Accounting software can be a great option for businesses of all sizes, from freelancers and entrepreneurs to large corporations. With many packages and services to choose from, which is the right fit? You’ll want a program that’s robust enough to cover all your financial needs, but not so complex that you’re paying for more than you need.

The key to finding the right one for your business is going into the process with a clear idea of what you do—and don’t—need. (If you don’t have your own accountant, it helps to make an honest assessment of just how comfortable you are with handling the numbers so you’re not taking on more than you’re confident doing.) It’s also important to not only think about your business now, but your business in the near future—especially if you anticipate growth. You don’t want to outgrow an accounting solution right after you’ve invested the time and money in it.

Here are a few things to consider before you start your search for the perfect accounting software so you have a handy checklist of the features you need when you start comparing your options.

How much are you willing to spend?

Let’s start here so you have a baseline for when you start comparing features. Accounting is an important investment for any business, but don’t pay for more than you need (and similarly, don’t skimp if you’re going to need more features down the line). For example, what a freelancer needs from an online accounting software will not be the same as an SMB—paying for a complex package with features you don’t need simply doesn’t make sense.

Do you need double-entry accounting or is single-entry accounting sufficient?

For sole proprietors running small businesses without employees, single-entry accounting will likely suffice, and is also easier to learn. Double-entry accounting is not only required by law for larger organizations, it’s a must for any small business that expects to grow and scale over time. It’s important for monitoring financial growth as your business scales, increases accountability (a bonus if you have investors), and makes life easier for accountants at tax time. Learn more about how it works here. Once you know if you need it or not, it will be easy to weed out which software meet your requirements.

What other features do you need?

Most accounting software handles the basics: invoicing, bill payments, finance reports, and expense reports. Advanced software (for double-entry accounting, which we’ll cover below) will offer accounts receivable, accounts payable, and more. Here are some important accounting features—these won’t be available in every single option out there, so know which you need before you begin comparing options.

  • Double-entry accounting

  • A/R and A/P Transaction Forms

  • Time tracking

  • Payroll

  • Inventory tracking

  • Access for Customers/Vendors

  • Quarterly tax estimation

  • Multi-currency support

  • Document management

  • CRM integration

Note: If a software you choose is missing one or two features but meets all your other needs, know you can usually find an add-on or extension to supplement your package, whether it’s a customer relationship management (CRM) feature or timesheet trackers.

Do you want cloud-based, desktop, or both?

Although many vendors are putting more emphasis on cloud-based products and less on desktop, a few options still offer desktop plans. A SaaS accounting option has benefits, as most cloud-based products do: the software is always up-to-date (so no software updates for you to handle), your data is backed up for you, and the program is able to sync up with bank accounts and points of sale. Unless you can remote into your PC, you won’t be able to do any accounting with a desktop program unless you’re physically at your machine.

What integrations do you need?

The cloud has transformed how we work—and smart integrations take that a step further by connecting the CRMs, systems and services we use every day for a more seamless working experience. If you have a few different cloud-based SaaS platforms behind your business, being able to integrate these into your accounting software is paramount. Some packages prioritize integrations while others do not. Also, look into what bank integrations packages offer to make sure your accounts are able to link.

How important is a mobile accounting app?

Many packages offer mobile apps so you can check your finances from your mobile device, scan receipts, or handle payroll on the go.

How important is training and/or live support?

Here’s another feature that differs a lot between options, so if you’re a true beginner and the learning curve feels a bit daunting, going for a package with excellent customer support (or even training) may be a draw for you. Some software is specifically designed for those with little-to-no accounting experience, while some higher-level packages are more tailored to CPAs and c-suite financial executives.

Do you need any payroll or time tracking services?

If you have employees, contractors, or freelancers to pay, chances are you’ll want payroll services built-in to your package to seamlessly handle paying talent for the work they do. Whether you need 1099s or direct deposit, integrating payroll into your accounting process is helpful for giving you a broad snapshot of your organization from one, central dashboard. Not all packages include this feature, but some offer it as an add-on within the same provider. If you don’t require any payroll or timesheet tracking you can narrow down your choices so you’re not paying for more than you need.

Source: B2C

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