One of your top priorities as a small business owner is keeping a close eye on the money you bring in and pay out, which is why it's critical to have the right accounting software. You need a program that helps you accomplish your daily accounting tasks – recording payments, tracking expenses, invoicing customers and reconciling transactions – and gives you insight into your business's financial health, allowing you to generate reports that help you analyze your business's performance from multiple angles.
But choosing the best accounting software for your business is challenging. Each program includes a different set of features, and most offer multiple pricing plans to choose from, which also vary by feature, number of users or other factors. Here are three items to keep in mind when selecting accounting software for your business:
Costs. Would you prefer inexpensive, basic accounting software or an application that costs more but includes extra features?
Usability. How many users need to access the software? Do you prefer a cloud-based system that you can access anywhere or desktop software? Do you need it to have a mobile app? What capabilities do you need the app to have?
Features. What do you need the accounting software to do? Do you need both accounts receivable and accounts payable tools? Which reports do you need it to generate? Do you need it to track inventory? Do you need it to include ancillary services, like time tracking, project management and payroll?
How Much Does Accounting Software Cost?
Accounting software varies in cost, depending on the features included, the number of users supported and other such factors. Many of the best accounting software companies offer cloud-based software as a service rather than software licenses, so they charge a monthly subscription fee.
You can usually choose from multiple plans, with paid packages typically ranging from $10 to $60 per month, though high-end programs can cost much more. If you're willing to pay for the software annually rather than monthly, discounted rates are often available.
More expensive plans often include advanced features such as expense and sales tracking, recurring invoices, project tracking and billing, automatic past-due reminders, team functions, advanced reporting capabilities, inventory tracking, and purchase ordering. Many accounting software companies offer integrations to augment the software's capabilities or to connect it to other business programs, sometimes at an additional cost.
Several companies offer a free version of their accounting software, though these usually have either basic features or limit the number of users, clients, or transactions. Some free accounting software providers make their money from the paid add-on services they offer. These programs are useful if your business is very small or you want to take the software for a longer test run than the trial period allows.
What Usability Factors Should You Look for in Accounting Software?
To find the best accounting software for your business, you need to decide how and where you want to use it and if anyone else will be using the system. Here are some factors to consider:
Multiuser Access
Most accounting programs allow you to invite other users to the system and control the data they can see and the tasks they can access. For instance, you may wish to give your business partner and accountant full access, while only allowing your employees to use the system to track their time and invoice customers. Some systems allow you to invite multiple users at no additional cost; others provide free accountant access but require you to subscribe to a higher pricing plan or pay extra if you want to add other users to the system.
Multi-Business Support
If you own more than one business, you may want accounting software that supports multiple small businesses under one account at no additional cost. Otherwise, you'll pay extra to set up separate accounts for each entity.
Cloud-Based Software and Mobile Access
Most of the top accounting systems are cloud-based, so you can access your account anytime, anywhere from any computer with internet access, helping you run your business remotely, whether you're home or on vacation.
Many also offer mobile apps to help you monitor key information and accomplish core tasks on the go. Some offer separate apps for employees that have limited features such as tracking time and submitting expense receipts.
Mobile app capabilities vary, so if this is an important feature for you, you'll want to ensure it has the functionality you need. You'll also want to ensure it works on your preferred platform, as some are compatible only with iOS and others can be used with smartwatches in addition to phones and tablets.
Most of the top accounting systems are cloud-based, so you can access your account anytime, anywhere from any computer with internet access, helping you run your business remotely, whether you're home or on vacation.
Many also offer mobile apps to help you monitor key information and accomplish core tasks on the go. Some offer separate apps for employees that have limited features such as tracking time and submitting expense receipts.
Mobile app capabilities vary, so if this is an important feature for you, you'll want to ensure it has the functionality you need. You'll also want to ensure it works on your preferred platform, as some are compatible only with iOS and others can be used with smartwatches in addition to phones and tablets.
Which Accounting Features Do You Need?
Accounting software offers many features and tools to help you manage your finances. It should cater to your business's needs, making it easy to accomplish routine accounting tasks. It should also help you see the big picture of how your business is performing.
Many business owners we spoke with said that ease of use and timesaving features are the top two things they look for in a program. Here are some of the features accounting software should have to help you save time and better manage your finances:
Basic Accounting Features
Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), income and expense tracking, financial report generation, and customer management. However, if your business sells more than just a few products, you'll also want the software to track your inventory, manage vendors and assist you with purchase ordering. If your business provides services, you want a program that makes it easy to track time and invoice billable hours.
Timesaving Automations
Some accounting software can be set up to automatically send recurring invoices and past-due notifications, saving you time on your invoicing and accounts receivable tasks. Others can save you time reconciling your accounts by suggesting transaction matches. If your business provides customers with quotes or estimates, look for a program that converts these documents to invoices in just a few clicks. If you carry inventory, look for a system that reorders products by automatically creating purchase orders when items drop below a set threshold.
Tax Preparation
Make your life (and your accountant's life) easier with accounting software that helps you with your taxes with features like automatic tax calculations, multiple tax rates and tax reporting. You should also be able to give your accountant access to relevant data within the system or easily email all necessary data and files to them.
Add-on Services
Accounting software add-ons, such as payment processing and payroll services, make it easy to accept invoice payments online and pay employees. Although these services usually cost extra, they're convenient to use, and the costs may be comparable to what you'd pay elsewhere.
Third-Party Integrations
Accounting software can make it easier to run your business by integrating with the programs and services you already use, automatically sharing data between systems in real time. Popular integrations include POS systems, payment processing, advanced inventory management, e-commerce, ERP, CRM, email marketing and Google apps.
Question to Ask When Evaluating Accounting Software
When you've narrowed your choices to your top two or three options, sign up for the free trials so you can see for yourself whether the accounting software has the features you need, is easy to use and saves you time. Call the software companies to get a feel for their customer service so you can feel confident that you'll receive the support you need should you experience an issue with the program.
Here's a list of questions you can ask when you call to help you select the right accounting software for your business:
- Is your software a good fit for my industry?
- Do you offer customized solutions to fit my business's needs?
- How many employees and clients can your software accommodate?
- How can your software help me comply with GAAP, tax laws and financial regulations?
- How is my data backed up? Can access be restored immediately after an outage?
- What security measures do you have in place to keep both my business's and my customers' data secure?
- What is the total cost? Are there any setup or cloud storage fees?
- What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)
Source: https://www.businessnewsdaily.com
Image Credit: Rawpixel/Shutterstock
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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