Want to choose accounting software for your business? It’s no exaggeration to say that getting the right software can mean the difference between success and failure.
Adding in the very best accounting software to your business will make it effortless to manage cash flow and know your company’s financial health at all times. You can issue and track invoices, it will be it easy to keep on top of your accounts receivable payments and you can also chase late payments efficiently.
In this article, we take a look at five factors that you might not have thought about before when you choose accounting software, with some handy insights courtesy of a group of business experts.
1. Will the accounting software grow with me?
Carl Reader is known as The Startup Coach and is the author of The Startup Coach and The Franchising Handbook. He has some wise words when it comes to examining the credentials of the company behind the software.
Carl says: “Look at whether the software provider is going to be around in 10 years’ time. Look at how well capitalized the company is. Has it got the funds to be able to compete going forward? Has it got the staffing, infrastructure and systems that you would expect to allow it to continue going forwards?
“And in 10 years, will it be the same company or is it likely that they might be acquired or pivot their business model, which might mean an uncomfortable transition.”
You hope your business will grow. As it does, what’s required from you as the owner will become more sophisticated too, as will the need to know more about business management.
Yet good accounting software will grow with you, with additional packages by the same software vendor sometimes coming into play as your business develops new requirements, such as bank feeds or payments processing.
2. Can the right people get the information they need?
Carl says: “Businesses should be run on a grounding of a solid understanding of the financial data by all teams. The more that people understand how their actions contribute to the bigger picture, the better.”
This underlines how far we are from the old days, when financial data was something closely guarded by those who “needed to know”.
In a modern, forward-thinking business, financial data is shared with those who need it – and it’s shared instantly. For example, a sales team might have access to a dashboard showing insights into the company financials that will help with its progress.
This kind of culture is one that promotes success and growth – and at its heart is the right accounting software. The ability to create bespoke dashboards or reports is a necessity, as is the ability to easily share them with key stakeholders.
The very best finance software takes a democratic approach when it comes to financial data. Not all data should be shared, of course, but allowing the right people to know the right information can truly revolutionize a business.
Ask the software vendor the following before purchasing: Is my accounting software designed only for finance professionals or is it for the whole business? And how easy is does it make it to share key data with stakeholders within the business?
3. Will it keep up with tomorrow’s technology?
Roger Knecht is the president of Utah-based training organization Universal Accounting Center and is an authority on how accounting software can benefit businesses of all sizes.
On the topic of upcoming technologies and their impact on businesses, he says: “Accounting software is helping the business owner be more present in their business.
“With the use of artificial intelligence (AI), we are just in the first phase of this evolution to give business owners the accounting information they need in a way they can use and understand it to make better informed decisions.”
Another incredibly promising technology on the horizon from an accounting perspective is blockchain. The most well-known implementation of this is cryptocurrency, which includes the likes of bitcoin. Cryptocurrency is already accepted by many businesses worldwide and governments are experimenting with the technology, while people use it for investments too.
It’s still too early for accounting software to process cryptocurrencies (most software focuses only on legal tender), yet it’s not unreasonable to ask whether or not the accounting software vendor is monitoring the same technological horizon as you are, or even what its position is on future technologies such as blockchain.
Ask the vendor if they have a progressive approach to existing technologies, such as mobile and cloud.
4. Does the software help me remain compliant?
Adam Prince is vice president of product management, compliance and migration at Sage. Talking specifically about accounting software, he says: “Remaining compliant has never been more important.
“Tax, employment law, data protection and more must be high on the list for anybody running a business of any size and are all pushed by the pace of digitization.
“But the right software helps you get it right without stress or having to sweat the details.”
It’s tough being in business but especially so if you’re a new business owner when there are legal requirements seemingly coming from all sides.
The most obvious is ensuring you take care of tax, because a business that is unable to pay its tax is essentially bust. Another common compliance area is payroll and pensions, where the rules can be complex but software can quickly simplify the workload.
And then there’s the need to keep your data is kept secure so you don’t fall foul of data protection laws.
Good accounting software will certainly help you stay on the right side of the law by providing functions and features that make it easier for you to remain compliant. Essentially, the folks behind the software will have done the hard lifting for you and thought through the processes, making it easier for you to fulfil the requirements.
5. What reports and dashboards do you get out of the box?
Just like in your car, the dashboard in accounting software aims to provide the key information you need at a glance. The very best accounting software includes at least one dashboard and they can be revolutionary for a business. Rather than having to run a report each time you want to see data in context, you can simply take a glance at a dashboard and see live, up-to-the-minute information.
Seeing data in this way means you can become responsive and truly track trends and developments, or simply stop any problems before they have a chance to arise. Compare that to the old days of periodic and basic reports, which forced people to be reactive and to make decisions based on things that had already occurred.
However, it’s not just key accounting information that benefits from being shown on a dashboard. The ability to configure bespoke dashboards (or bespoke reporting) can provide unique perspectives and reveal relationships between data that wasn’t possible to see before. Dashboards can allow different departments in a business to work together more efficiently too because they’re able to see a broader picture.
Therefore, the ability of accounting software to let you go beyond the basic dashboard is simply a necessity. And only the best accounting software includes such features.
How to choose accounting software: final thoughts
Businesses start with an idea and a passion and they should continue to drive you forward. Getting the right accounting software can be about more than taking care of the numbers – it can help to support your mission and goals.
The right software will support your business as it grows and prepare you for whatever the future brings. Making the right choice when your mind is on other things might take effort but, as with all things in life where effort is demanded upfront, doing so will mean significantly less work over the long term.