Choosing the right accounting software for your business

The right accounting software can provide the backbone for establishing your business’s systems and processes which has a major influence on how efficiently your business operates. In recent years, we’ve observed a growing shift in the South African accounting software landscape from desktop based accounting software to cloud based software. The cloud platform, which makes data and software accessible online, anywhere, anytime, and from any device, is gradually replacing traditional on-premises accounting software. It seems inevitable that within the next five years, desktop accounting software will be a thing of the past and everyone will have migrated to ‘the cloud’.
The benefits of cloud based software have been a disruption to the entire accounting industry. Those accountants and bookkeepers that continue to utilise the older more manual methodology of accounting are likely to face increasing pressure from those who promote cloud accounting software packages as they are faster, offer increased levels of service and are ultimately cheaper than firms who use manual accounting methods. Some of the main benefits of cloud based accounting software over desktop based accounting software include:

  • Accessibility: multiple users can access the same data allowing for increased collaboration with your accountant and increased productivity.
  • Integration: with other popular third party cloud applications and accounting software.
  • Better backup: immediate access to upgrades, and faster bug fixes.
  • Security: more secure data storage.
  • Cost: paying for only the services required, on a monthly basis.

Of these benefits, it is the integration with quality third party software platforms that is particularly beneficial to small and medium-sized businesses. Cloud accounting allows for small and medium-sized businesses to pick and choose between various add on applications, some that are industry specific, to bring further efficiencies to the business. Applications covering workflow management, inventory, CRM, business intelligence, payroll, debit order management and debtor finance can all link with your cloud accounting software.
Choosing the right accounting software for your business doesn’t need to be a complex process. When choosing accounting software you should start by focussing on three important questions: What is your monthly budget for accounting software? Why does your business need accounting software? Which features does your business require in an accounting software package?

What is your monthly budget for accounting software?

Accounting software products vary in cost, depending on the features you choose. Most cloud accounting software providers use subscription models for different types of packages, and some offer free versions with basic functionalities or limits on the number of users and clients. The most popular packages available to the South African market range from around R205 per month to approximately R675 (US $50) per month, however, most providers offer a discount if you pay for a full years subscription fees upfront. Features that add to the costs include additional number of users, payroll services and advanced reporting capabilities.

Why does your business need accounting software?

To find the best accounting software for your business, the first step is to figure out the primary reasons for needing accounting software in the first place. For some small businesses, such as a property letting business, using spreadsheets or even handwritten ledgers will do. For most, however, the ease and efficiency of accounting software make it the better choice.

Here are some factors to consider:

  • You’re just starting out. Using accounting software right from the start sets your business up for success down the line. It’s far more beneficial to begin using accounting software from the first day than to implement one after months, or even years, of using spreadsheets or handwritten ledgers.
  • Your business is growing. If you plan to expand your business, or if your business is growing quickly, a manual accounting system becomes inefficient and complicated. If you use accounting software, it can save your growing business loads of time and money by automating processes and being highly scalable to your business’ size.
  • You want immediate, on-demand access. Accounting software is not just about the numbers. On the contrary, most packages give you an easily accessible database of both financial and customer information. You can even include all types of details about clients and vendors, such as contact information, purchase histories and credit terms.
  • You want to streamline your operations. By performing tasks ranging from payroll to day-to-day transactions, accounting software can integrate all parts of your operations and automatically input data from other systems, such as your enterprise resource planning (ERP) system, point-of-sale (POS) system, customer relationship management (CRM) system and other third-party solutions. Accounting software can also link your bank accounts and credit cards to automatically track expenses and update your books.
  • Your current system is too complicated. Not all accounting systems are made the same. For small businesses, some of the mainstream accounting systems are too complex and packed with unnecessary features. If the software you currently have is too complex, a solution made specifically for small businesses is a much better option.
  • You want to make sure you comply with all laws and regulations. Many accounting software programs do the legwork for you and can guide you to ensure compliance with taxes such as VAT. You can’t get that with spreadsheets or by doing everything by hand.

Which features does your business need in an accounting software package?

The best accounting software packages include a full suite of features for both accounts receivable and accounts payable as well as inventory and asset management. They sync with your business bank accounts to give you an up-to-date overview of the money flowing in and out of your business. They include features that help you move to a paperless system, such as the ability to attach images of receipts to expense reports and send invoices via email.

Whilst some cloud accounting packages only cater for invoicing and debtors management, we suggest that you choose a package that should be able to perform a minimum of the following basic tasks:

  • Creating invoices, with a minimum of two output options: email, print or convert to PDF
  • Customising invoices with your company’s logo and payment terms
  • Tracking business expenses
  • Bank connectivity for easy processing of cashbooks
  • Running a variety of financial reports
  • Additionally, the software should include free access for your accountant and should integrate with a payment processor so your customers can pay their invoices online in just a few clicks.

At Dümmer and Neal Accountants we specialise in matching accounting software solutions to a client’s industry and their unique business needs to help our clients better understand their business and ultimately help their business grow. If you’re having difficulties establishing which accounting software solution is best suited for your business, speak to one of our dedicated specialists today.

Extracts from this blog post were used from: http://www.businessnewsdaily.com/7542-choosing-accounting-software.html

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