How to Choose the Right Accounting Software for Your Company
If you’re in the market for an accounting software program for your business, then that’s a very good move. One of the many advantages of accounting software is that it simplifies and automates repetitive tasks without losing accuracy. In fact, a comprehensive accounting software automates 75% of an accountant’s workload. Imagine the benefits that stem from improved productivity.
That said, picking the right accounting software for your business can be quite tricky as each business enterprise has its own unique needs and requirements, as well as regulations to comply with. The process involves a complex range of factors, like how many people will be using the software, security specifications, the specialized training required, the security needs, and other areas unique to a given organization.
No organization is the same. That means there is no ‘one-size-fits-all’ accounting solution. So before you gloss over your list of accounting software, you might want to check the guide below to help you make an informed investment.
- Identify Your Business’ Requirements
Before you start searching for the right accounting software for your business, it is vital that you begin by identifying the accounting requirements of your organization. It would help to get you going by answering the following questions:
- Are you running a small business, a medium enterprise, or a large organization?
- Do you see your business expanding within the next three to five years?
- Do you prefer an on-premise set-up or would you like to move your accounting processes to the cloud?
You can add a few questions of your own as you begin your search. Knowing what your business requires will help you determine what solution to pick from various types of accounting software. For small business owners and operators, there are a number of accounting solutions you can buy off-the-shelf and online. Medium-sized enterprises and large organizations have complex needs, which is why bespoke accounting platforms suit them best.
- Make a List of Features
Listing the features you need in an accounting solution helps narrow your search. Most accounting software options come with basic capabilities such as billing, invoicing, purchase orders, expense tracking, and general ledger. For instance, an auto repair expensing tracking capability for businesses in the auto industry.
Robust accounting platforms can be customized with more advanced accounting tools like inventory management, integrations with external apps and solutions, payroll, accounts payables, and accounts receivables. Scalability is also a big deal as this gives your software the ability to scale along with your business. It must be noted that tailored accounting software comes with a heavier price tag but is more suited for organizations with very unique accounting requirements.
At this stage, it is also best to include your organization’s accountants and other end-users in the loop. Their inputs and suggestions will help you understand what features they need and want, enabling you to further specify your search.
- Establish Your Budget
One of the crucial steps in evaluating accounting software for your business organization is establishing the budget. Variables like the number of users, pricing models, deployment, features, support, and add-ons affect pricing.
According to BetterBuys, basic cloud-based accounting pricing starts at $8 per month per user. Tailored solutions for medium-sized enterprises begin at $30 per month per user. Some vendors offer annual packages that require a bigger upfront investment than monthly software subscriptions but are cheaper in the long run. Premium accounting packages range from $300 to $500 per user per month to over $1,000 per license.
It is important that you perform detailed research when it comes to pricing. Most vendors are transparent with their rates and don’t charge extra while others don’t disclose hidden fees, resulting in unexpected, bigger TCOs (Total Costs of Solution).
Once you have filtered your vendor options, remember to ask about their pricing and prompt them to disclose all their charges.
- Match Your Industry
When shopping for an accounting software, also take into consideration the industry where your business operates. While there are universal accounting standards all organizations must comply with, each industry has specific sets of accounting rules and regulations they need to adhere to.
For instance, accounting processes and regulations for a hospital is way different from the accounting policies an auto repair shop must follow. Industry-centric accounting solutions are built with certain features and capabilities unique to their industry. Tax requirements per industry vary as well, further justifying the need for accounting software that is designed for a specific sector.
Speaking of tax requirements, this impressive tax software research provides you with a detailed list of the best tax software solutions in the market today.
- Consult with the Experts
Unless you have extensive experience and expertise in accounting and software implementation, consulting with a few experts right off the bat will do you and your organization a lot of good. It’s highly recommended that you get the services of an accounting software implementation consultant to help create and implement an effective and viable plan.
That said, a professional software implementation expert with a solid background in finance and accounting can be quite expensive. If your budget can’t afford having such an expert around, you can tap into accountants within the organization and ask for their advice.
- Choose the Best Qualified Software Vendor
At this stage, you know what your business needs, you have a list of features you want your software to have, and you have established a budget. On top of that, you know the best way to go is with an industry-specific accounting software. All that plus inputs from the experts you consulted will help you determine which software vendors are highly qualified to meet your unique accounting needs.
It’s always a good sign when a vendor regularly communicates with you and puts your needs first while supplying their own suggestions. Many recommend signing up for free trials and demos to get a good grasp of their products’ capabilities and how it fits with your business and existing processes.
It’s also wise when you reach out to their customers and ask about their experiences. Did your potential vendors deliver high-quality products that met the expectations of their clients? Are their products scalable? What about training and customer support?
The answers to these questions will give you a good idea about your prospective vendors and help you make a smart, data-driven decision that will alter the way you run your business.
Time for a Massive Shift
The continuous advance of business-critical technologies has elevated expectations on productivity and efficiency. Adherence to regulations is scrutinously monitored as regulations become stricter. In the accounting world, precision is of paramount importance. So is speed.
These needs, among others, validate the need for accounting software.
However, there are a significant number of corporate accounting teams that haven’t embraced advanced accounting solutions that would have enhanced their accuracy and efficiency. In a Journal of Accountancy podcast, accounting experts cited budget constraints, familiarity with legacy systems, and outdated and/or traditional perceptions of accounting’s role in a business enterprise as reasons why many businesses still fail to adopt newer accounting platforms and technologies.
Accountants and corporate leaders must realize together the value accounting software adds to their business. There must be a cultural shift towards digital transformation and the adoption of new technologies in order to close the gap. More than closing the gap, businesses need to embrace new accounting technologies to compete, thrive, and succeed in this highly technological business era.