If you’re a business, you need accounting software to record your expenses and income. Ideally, this’s the very first piece of software you need to purchase when you begin the company.
Nevertheless, most business owners get one only when they have to pay taxes or perhaps apply for loans.
So, how to select the right accounting software program for your company?
This could get confusing as there are lots of products offered in the market today. Therefore, I am trying to make your job easy by listing down some important filtering criteria you have to consider before investing in an accounting system.
There’s also a brief step-by-step process, in the end, to assist you in the decision-making process.
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1) Online or perhaps Offline
The first question to ask yourself is whether I want online software or perhaps desktop-based offline software?
Just how does it matter?
These days, most businesses are adopting cloud-based software programs as they provide many advantages over traditional offline software. Nevertheless, some businesses like retail stores require speed and are not always connected to the web. For them, offline POS (Point Of Sale) systems are actually probably the best option.
Advantages of Cloud Accounting Software: – Nothing to install. Just signup and start entering the transactions of yours
– You do not have to be concerned about upgrades as all changes are actually pushed automatically. Online software is usually up to date.
– Can be seen from any internet-enabled device at any point in time – Cloud accounting software providers take care of backup and maintenance that is a cost-saving for you.
– Data across your offices is always synchronized.
– It can integrate with other cloud-based applications.
When you need to buy offline or perhaps desktop-based software: – You have a retail store and need to produce few 100 invoices over the counter.
– You don’t have internet connectivity at your business location.
It strongly suggested you go for an online accounting software program as you will have the financial data on yours tips yours even if you’re not in the workplace.
2) Data Security
Skip this point in case you’ve opted to go for an offline accounting package. However, if you’re thinking forward and considering an online accounting application, then data security is actually the most crucial factor to check.
Things that are Important to check: – Ask the company just how they store the application data. Typically, this info is going to be offered on the site. Here’s an example. Several of the trusted cloud hosting service providers are actually Rackspace and Amazon. If the accounting software provider of yours is actually hosting the application on their own servers, ask them about the security measures they’re taking to safeguard your data.
– Check-in case these services are actually using HTTPS connection. It’s effortless to check this – open the application and find out if the URL in the address bar starts with HTTPS://. Typically, this’s highlighted in green color. You can also click on that to see the security certificate. HTTPS protocol ensures that the data transferred from your pc to the software company’s servers are actually encrypted and can not be seen by hackers.
Create a list of important functions that you absolutely need in accounting software. Here are a few features which must be a part of a great accounting package.
Create invoices and customize the look and feel
Track expenses according to categories
Manage inventory, inward, outward stock movements, and wastage
Perform bank reconciliation by importing bank transactions
Create purchase orders (PO) and record inventory purchases
Create and control taxes
Record-Journal Voucher entries
Manage list of vendors and customers
Receivables and view account payables
View Balance Sheet, Loss and Profit Statement, and Trial Balance reports
Add additional team members
Audit Trail Tracking
Good to have Featured:
Support for multi-currency transactions
Option to control employees and process payroll
Categorize transactions according to projects
Access control for every team member
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4) User Interface & Complexity
Most business owners don’t have an accounting background. Even in case you have a separate accountant who’d be making use of the application, as an owner, you must be in a position to log in and browse the things. Besides, it must be easy enough for your employees to find out the program. Investment in training is actually a cost and must be stayed away from.
When the software program is actually stuffed with every possible feature you can imagine, it will become hard to use for the staff yours. So, go for a software application with a simple user interface and is not bloated with unnecessary features. A clean interface makes it simple to concentrate on important tasks and certainly will reduce the learning curve.
Many companies make a mistake by purchasing an application that suits the needs at the time of purchase. Later on, when their business starts to grow, the accounting software fails to cope with the progress, and eventually, business owners have to migrate to another software. Migrating data from an existing system to completely new software can be painful.
So, select an accounting program that will scale with your business needs. Some software offers only one model of the item, and some have progressive versions based on the business type or even size. Go for the software program, which offers an entry-level version and also a feature-rich version that you may not need now but will certainly need in the future.