Sometimes, a business owner needs more than a free efile to keep things running smoothly. When this is the case, it is time to find a piece of software that combines all of your accounting obligations into one easy-to-use technology.
Finding the best accounting software that meets and surpass the needs of your small business is not an easy task. In my career as an accountant and a business adviser, I have been asked the question; ‘what is the best small business accounting software’ many times that I can’t even remember. This shows that managers and business owners really care about automating their accounting and bookkeeping rituals. In this age and time, not using accounting software is an unpardonable business table that ultimately lead to unavoidable business failure.
This article is written purely with the purpose of educating managers and small business owners on how to select accounting software that will help them solve modern day business challenges without spending a fortune. I hope my fellow accountants or financial planners will not hang me for giving out this information for free; laugh.
WHAT IS AN ACCOUNTING SOFTWARE | FUNCTIONS OF ACCOUNTING SOFTWARE
Accounting software is an application interface that establishes a link between accounting transactions. Accounting software is application software because it is designed to perform range of specific tasks. Accounting software records, collates, processes, and analyse financial information in a format that is ready for interpretation and use in decision making.
Functional modules like: accounts payable, accounts receivables, inventories, payrolls, trial balance, etc are all linked in one package to help achieve the ultimate aim of an realising the importance of accounting. These sets of modules might be purchased off the shelf or built in-house depending on the circumstances of the company. You can find both paid for and free version of accounting software. However, I always advice all my clients to consider the paid version option as money spent on purchasing accounting software is a form of investment that will definitely yield result if done right.
In order to cut cost in the face of increasing competition- which by the way is one of the most important functions of management – businesses (large or small) are increasingly subscribing to software-as-a-service (SAAS) option as an alternative. SAAS allows a company to outsource certain functions that are traditionally done in-house to a third party who in most cases acts as consultants. The emerging problem with SAAS is the issue of security- what technological advancement does not introduce one form of problem or the other?
At the barest minimum, functional accounting software should be able to perform the following functions: capture accounting information, store the information in a retrievable manner, and produce same information in whatever suitable format required by any user at any particular point in time. To perform these functions, accounting software must have the features listed below and still fall within budget.
FEATURES OF ACCOUNTING SOFTWARE
DATA GENERATION ABILITY: In addition to being able to perform the basic functions of recording and processing financial data, accounting software must have the ability to produce decision support information that meets the needs and requirements of the intended user. For example, one of my clients that deployed one of the low-end accounting software ended up paying additional cash in penalty as it had insufficient cash in the bank to make its weekly wages because the software deployed does not have the ability to alert the user on cash flow activities. This kind of ugly incident can easily be avoided if a sort of alert feature is built in to link the various modules within the system.
SECURITY OF FINANCIAL DATA: Good financial system software must be secured. As obvious as this point is, a lot of vendors out there that provides accounting services do not really have the security of the end users at the back of their mind while coding. You must always ensure that there is an avenue for you to update patches or vulnerable points discovered in any accounting software from time to time.
FRIENDLY USER INTERFACE: Data input can be stressful if the user interface creates some sorts of barrier to data entry. Though many experts argue that this is not an important feature to look at, but think of it from this perspective; what will it benefit your business if your employees spend more time inputting data into your accounting software than they would have ordinarily done if the system were to have a friendly user interface.
SCALABILITY AND ABILITY TO INTEGRATE WITH EXISTING APPLICATION SOFTWARE: Due to the fact that accounting is a living subject, changes to accounting rules and norms always abound, a good example is the likelihood of accountants and business advisers encouraging the use of (XBRL). For this reason, accounting software that will make good investment must have an upgrade point. You must ensure that whatever technology you plan adopting must at least have a point where middleware can be plugged into for sake of compatibility.
TIPS FOR CHOOSING OR SELECTING THE BEST SMALL BUSINESS ACCOUNTING SOFTWARE
The first thing to do is to establish the fact that you need accounting software to smoothly and effectively run your business. The importance of accounting software is no longer newsworthy. This is to say that having the right accounting software equates the importance of accounting in business. I bet that running your business will be more stressful and demanding if information handling processes are not fully automated.
Your next task in the selection process is to ascertain the accounting needs of your business. The importance of this step is to allow you make the optimal decision regarding managing your accounts. You cannot make the right choice of accounting software if you fail to clearly identify what it is that you are exactly looking for. Take care to get this right as there will be no second chance without substantial cost of doing so.
Automate the search. You will literally bury yourself within the plethora of powerful financial software out there. You rely on the service of some databases to help filter out those tools that would not meet your business needs and accounting requirements. Just do a Google search to select from the search result. I have been using software called accounting library to help me achieve this. All I do is input my criteria and let the software search the relevant databases and the then come up with the most recent version of accounting software in the market with brief description of the basic and advanced features.