Accounting is a part of the foundation of your small business, there’s no arguing that!
From getting paid by your customers to long-term financial planning, everything loops back to your accounting processes. If your accounting isn’t in order, then it’s highly likely that other aspects of your business will follow.
What is the key to organized accounting? It used to be a reliable pen and paper, but nowadays, it all comes down to the accounting software that you choose. Accounting software is designed to do the grunt work of accounting, recording and processing your business’ transactions.
As with any choice, there are many things to consider when selecting an accounting software to use for your small business. Each accounting software on the market has something different to offer. It’s important to find the one that has the most to offer specifically to your business.
That’s why we compiled our top 7 tips to help guide you through the choice process. Let’s get started.
Tip #1: Consider the Cloud
Most top accounting software today is cloud-based. What does this mean? Just that the data stored and processed by the software is not on-site. Rather than staying on a server or hard drive, the information is processed over the internet, or what many people simply refer to as “the cloud”. This type of accounting has many benefits.
For example, it can save you up to 15 hours every week! Not to mention, it means that you can access your data anywhere, as long as you have an internet connection. This is great for small business owners who are always on the go. Here are some of the top cloud-based accounting softwares that you should check out:
Tip #2: Be Realistic About Your Needs and Skills
Don’t just pick the accounting software with the best price or the most enticing marketing. It’s essential to first consider how your business operates and your own accounting skills. For example, some software is designed to work perfectly for service businesses.
This wouldn’t be a great pick for a retail business. Consider your industry, how much money you make, and how much support you need while doing your research on accounting software.
Tip #3: Keep Your Budget in Mind
The price range for accounting software is varied. There are different payment systems and a big variety on the overall price tag. However, there is also a big variety in the amount of services offered.
Normally, accounting software that is designed for a specific niche tends to be more expensive. If you go with the more generalized software, you may be able to work on the lower end of your budget. However, consider the last tip and be sure not to trade a lower price for valuable features that you may need.
Tip #4: Check Out the Bonuses
Add-ons and extra features aren’t the core of an accounting software, but they can certainly make your life easier and offer some extra value. Be sure to consider every feature and add-on listed for a certain software. One little thing may be valuable enough for your business to make it a no-brainer!
Often, the add-ons are where you will find integrations. Be sure to look for apps, software, or systems that you already use. The more compatible your accounting software is, the better. Here are some valuable add-ons that are worth considering:
- Xero Expenses: an add-on for Xero that helps you and your employees log and manage expense claims.
- SOS Inventory for Quickbooks: an inventory tool that connects seamlessly with your Quickbooks Online accounting software.
- Shopify for Freshbooks: Link Shopify and Freshbooks to automatically update and track clients and their orders.
There are so many bonuses and integrations out there. Be sure to keep an eye on the ones that will offer value to your business.
Tip #5: Ask For Help
An accountant or financial planner is a great person to go to for advice on your accounting software. If you’re already working with financial help, asking their opinion about the type of software you should choose is crucial.
Professional accountants know a lot about what’s out there, and not to mention, they will probably be working closely with the software themselves! You can even ask around to see what other business owners in your industry recommend.
No matter how much research you do, the best way to make a choice will be to base it on the actual experience of others.
Tip #6: Don’t Forget About the Other Systems
Integrations are important!
This is a mantra you should repeat while you’re researching different accounting softwares. Consider the different types of software you already use.
Do you have a payroll or HR system? An invoicing software? Any sort of business automation that you already use should be considered in order to work seamlessly with your accounting software.
Tip #7: Ask About the POS
One thing that you may forget to consider, if your business has a physical location, is the POS (point of sale) system, and how it integrates with accounting software.
This type of integration is something that not all accounting software has, and it can make your life much easier. If you work with a POS system, make sure that you only look into accounting software that is able to work with it. If not, you may end up with skewed reporting and many more hours of manual data entry to do.
Here’s a quick recap of what you learned in this article:
- Nowadays, a cloud-based accounting solution is the right way to go and has many benefits like security and saving time.
- The right accounting software for your business depends on its specific needs, as well as your skills in the accounting area.
- Your budget plays a big role in picking the right accounting software. Be sure to consider how much you’re spending compared to the features you’ll get.
- Features and add-ons may not be a part of the bare necessities, but they’re worth considering! Think about the bonuses you might benefit from in one accounting software compared to the next.
- If you work with an accountant or a financial planner, take their opinion on the software into consideration.
- Your accounting software will have to work with other aspects of your business- make sure it’s compatible.
- If you need a POS, be sure that the accounting software you pick is able to integrate with it.
There’s a lot to consider when choosing an accounting software. Be sure to give it your full attention and not make the choice as an afterthought! By using these tips to help guide you through the process, you’re on the right path to picking the right accounting software for your small business.
Working with the right tools is the first step to success. When it comes to your accounts receivable, be sure to pick a tool like InvoiceSherpa that integrates seamlessly with the top accounting softwares.