How do I select accounting software?
Every business needs to track its financials. This can be a lot of work however not only is it essential – it is critical to the survival of the business.In aviation, accident statistics show that the pilot who has not been trained in instrument flying, or one whose instrument skills have eroded, will lose control of the airplane in under10 minutes generally resulting in death. Business owners that do not track or use reports to manage their business run the same risks.
Today there is a plethora or different software packages available and they suit everything from a small sole trader to large enterprises. I am going to focus on the small to medium enterprise.Like all areas in life – discuss your options with those that use them the most – bookkeepers. Have a look around the web and ask the questions on the various forums that are available. The considerations below are based on the assumption that you have a basic understanding of the accounting process.
Desktop vs. Internet (Cloud) or Hosted
First question – how reliable is your internet? If you don’t have consistent reliable internet then the choice is obvious.
Points about desktop are:
- They’re purchased either in-store or online.
- They’re often installed using a CD or a link onto a PC.
- They usually offer rich-functionality.
- Users usually pay once or annually for upgrades.
- Updates occur at regular intervals to provide users with enhancements and/or program changes that help them meet new compliance requirements.
- IT costs are lower because hosting is managed for you.
- Users get access to familiar programs over the internet.
- They may also be available on desktop.
- Users usually pay an annual or monthly fee for access.
- Allows access to fully featured accounting software via the internet.
- The accounting software is commonly hosted and backed-up in a secure data centre.
- No software is installed and updates are usually automatic.
- Usually accessible on any device.
- No software installation is needed.
- User experience is built with web in mind.
- Most commonly only accessible via a browser.
- Updates occur at any time.
- Users usually pay a monthly fee for access.
- They often have an open API that allows for added tools from 3rd parties.
- They’re accessible on any device.
Consultation with your advisor to select the system for you.
If the program isn’t intuitive then you may struggle. Most companies offer training in their programs (at a cost) and there are also lots of videos on You Tube.
What features do you need and what is on offer? See if the program (& associated cost) is scalable to meet your business needs. Can you easily add a feature as you grow (e.g. payroll)? Again discuss a needs list with your bookkeeper. You need to be able to tracks costs such as cost of goods sold, payroll if needed and how you revenue is made up. This leads to what I think is the number one critical capability.
How good is the software at producing quality accurate, customizable reports? This is really where the value in a piece of software lies. You need fantastic reporting capability.
Add-ons and compatibility.
Most companies have SDK (software Developers Kit) which can be made available to developers in the market. Your business may require particular applications in say e-commerce or inventory control. Can your data be exported to Excel or CSV format?
Do you need a capability for multiple users or access and what is the cost? A lot of the “Cloud” or Hosted products offer this capability which allows other team members access to real time data.
Price is a factor but only one of them. We often see clients who have purchased a software package – because it was on special! The right product for your needs is the important thing – be smart and buy right.
Manage your cash flow, get your budgets in place and run your business by the numbers. One of the first questions we ask new clients is whether they run a household budget.
What we have found is those that don’t run businesses that don’t make money.
What do you have at risk?
One of the things we have learnt over the years is implementing new software takes planning, lots of it & in detail. It is projects of significance- don’t let anyone lead you to believe otherwise. The road is littered with the corpses of failed software upgrades and implementation that have failed miserably and you have undoubtedly read about them in the papers.
We will work with you and assist with the design , implementation, documentation and training that is all required to have a successful transition to new software.