Things you should be familiar with even before the digital age, business owners keep track of everything using paper ledgers. Now a days, enterprises of all kinds, forms, and sizes utilize accounting software in keeping abreast on their revenues and expenditures, predicting future sales, managing their inventory, and recording important financial data. However, keeping their books up to date and overseeing financial transactions can tough and time consuming. Businesses must always bear in mind that proper bookkeeping translates to good financial judgment. On the other hand, poor bookkeeping results to lapses and mistakes that can immensely affect the business. Employing an effective accounting system that lets entrepreneurs identify their business’ strong points and vulnerabilities is a must.
Significance of Accounting Software
As a business owner, time is of utmost importance. Instead of focusing all your attention on managing your business, you may end up burning out from updating your finances and generating reports. A good accounting software should minimise the stress from keeping financial information up to date. When appropriately matched for your business and used properly and correctly, the right accounting software can do wonders.
Saves a lot of time
In contrast to manually updating books and using spreadsheet, accounting software will let you save a lot of time. The software itself slashes and gets rid off repetitious and superfluous data entries.
Performs other duties and tasks
Accounting software can perform various tasks efficiently. For instance, you can check your bank accounts and tax returns, automatically convert an order into a sales invoice, and update stock levels and records of your clients.
Manages the business’ cash flow
It is indispensable for all businesses to easily and efficiently manage its cash flow. An accounting software can consolidate financial transactions involving accounts receivable, accounts payable, and billing, thereby giving the organization an array of choices with regards to longstanding growth and progress, and strategies in generating more income.
Helps in making sound business decisions
An accounting software can give a brief summary and the current profile of your business. In addition, it provides comprehensive reports and other related information needed in creating and planning long-term strategies and campaigns.
Lays out the framework for development and progress
As the company grows and expands, the bookkeeping software also grows and expands, allowing more users and providing the essential types of reports and other business or financial data.
Factors to Consider When Choosing Your Accounting Software
Choosing the accounting software that best fit your business can be an arduous task. With a lot of choices available in the market, how can business owners figure out which of the accounting software that can readily be used is the right one for their company?
Listed here are several factors to identify and consider to assist business owners in making a well thought-out and strategic choice when investing in an accounting software.
What Your Business Needs Prior to purchasing an accounting software, business owners must identify first the nature of their business, its needs, and the accounting tasks that the software will execute. For instance, if your company generates millions of dollars yearly, your accounting needs will differ from an enterprise that makes less than $100,000 per annum. There are an array of choices of accounting software that are specifically designed for small- and medium-sized enterprises. You also need to consider the type of industry your business is engaged in. There are accounting software that are built for different business sectors, such as manufacturing and retail industries.
Types of Accounting Software
Generally, there are three main types of accounting software available in the market that can help businesses of all sizes with their accounting needs and concerns: cloud computing software, desktop accounting software, and server-based software.
➢Cloud Computing Software can be accessed via the Internet. In here, the software provider store and save the company’s data in the cloud. With this, businesses can access and use this information anytime and anywhere they want to. Examples of common cloud accounting packages are Xero, MYOB, Sassu and QuickBooks Online. Ideally.
➢Desktop and Server based Software is set up directly on your computer or a server. Unlike cloud computing software where you can use the company’s data on your own convenience, desktop accounting software can only be utilized, including the stored data, on the computer where it was installed.
After fully realizing what your company explicitly needs, you have to make a list of accounting functions that you need from your software so that you can narrow down your choices. In making a decision, you can create two columns — the product features you want versus the product features you need. Also, take into account the software’s integrability with other business platforms, such as CRM or shopping cart software. Usually, majority of beginner’s software package includes listing and/or updating records of customers and suppliers, creating customer invoices and statements, and generating important financial reports and creditor reports. Accounting software features such as automation, tax preparation, payroll processing, mobile accessibility, multi-user access, quote and estimate creation, sales tracking, time tracking, and live bank feeds should be considered for they will surely help business owners save time and manage the company’s finances.
The accessibility and convenience of connecting to the software provider, other users, and professionals is imperative, especially for new product users since not all of their concerns and issues regarding the accounting software are addressed in the product guides and manuals. Opt for software providers that have large customer bases. These online communities comprised of interactive users, and sometimes employees who join in discussions, can help you resolve problems that are related to the accounting software.
Probably the last and most important determinant you have to take into account is your budget. When purchasing an accounting software, not only the product’s price should be weighed, but also the fees for product upgrade, licensing, and support. There are also other charges involved such as technical support fees that cover the set up and installation of the bookkeeping software, and costs for additional features like company branding and team functionalities. Auspiciously, most software providers offer free trial periods. With this, you can assess whether or not the product’s benefits outweigh the costs. This is also a great opportunity for you to accustom yourself with the software. Once you are settled and determined to purchase the accounting software of your choice, it wouldn’t hurt consulting a trusted accountant for advices, suggestions, or recommendations.