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How to Choose Accounting Software

No need to say that if you run a business you have some calculations to do. Back in the days, all these calculations used to be tracked in handwriting and the whole accounting process was paper-based.

But from then onwards things have changed a lot and keeping accounting has become much more convenient.

Paper-based accounting was replaced by accounting software that helps save a lot of time on most of the tasks and manage company’s finances in a flexible way.

No company can do without accounting software as it helps to store all the essential data in one place and set and monitor company’s financial processes.

In this article, we’ll consider how to choose appropriate accounting software for your company taking into account the size of your business, the cost of accounting software, accounting, and usability features.

What Is the Size of Your Business?

The accounting needs will grow according to the size of a business. For example, some standard and free accounting software are enough for a small company with annual turnover of $25,000-50,000, while a company bringing millions will need advanced software helping to solve much more complex accounting processes.

If your business is a fast growing one, prepare to invest more money in your accounting software and purchase one that can be scaled and upgraded according to the increasing needs of your company.

What Types of Software do You Need?

There are several types of accounting software. You need to decide which processes of your business you need to automate the most:

What Is the Cost of Accounting Software?

The cost of accounting software may comprise of a number of factors such as the set of features involved, the number of invited members and other.

A large number of accounting software may be cloud-based SaaS (software as a service) products and work on the subscription basis charging a monthly fee.

As a rule, types of subscriptions are divided into paid plans depending on the amount of time that you plan using accounting software. Its cost may range from $10 for a simple start to $50 for an advanced package per month. Though, some companies offer discounts if you pay annually.

Bear in mind that the more sophisticated and feature-packed the software is, the more it will cost.

Most companies also offer free trials of their software, so you can first try several accounting software, understand which matches your needs and only then make a purchase.

Compare the available accounting software and make a decision according to your budget.

What Features Does Accounting Software Have?

There is a great number of accounting features. Most of them help save time greatly which is one of the main benefits of accounting software.

Here are some accounting features that may help you set your financial processes:

Reporting features

This feature will help you analyze time and expense tracking and employees’ effectiveness. Creating graphics according to the reports will be of great benefit.

Automation features

Accounting processes are based on a lot of tasks that are typical, recurring or doesn’t involve much effort but may take more time if not automated.

These tasks may be:

  • managing accounts payable and accounts receivable
  • scheduling automatic payments
  • paying and tracking recurring invoices
  • tracking payrolls
  • creating orders and many more.

Tax features

Such features will help you do all the tax work a lot faster. Accounting software may have a database with most common tax forms and allow to personalize filling out of tax forms, automatically calculate taxes and tax rates and pay them via the system.

Banking features

The software may be connected to your bank account so that you are able to perform direct payments with the accounting software.

This feature will also help to connect all your essential bank data with the accounting system.

Data security features

Accounting deals with confidential information that’s why it’s important to make sure that accounting software is secure and keeps your data safely.

Ask a software provider how they store the data. They can use cloud hosting service providers, for example, Amazon and Rackspace are some of the trusted ones. If they have their own serves for accounting software, learn what security measures they take to prevent data loss.

The set of features may differ from software to software. Try to find accounting software that will offer customizable features. Thus, you’ll be able to buy only those features that you need.

What Usability Features Does Accounting Software Have?

Access for multiple users

Accounting processes in a company involve management of at least several people. Most accounting software will provide you a possibility to invite several people to your system. Apart from that, you will be able to manage people’s access to the company’s data and tasks.

Monitoring several businesses

If you run several businesses, this feature will come in handy. There will be no need to buy several accounts and manage them separately.

When choosing accounting software (if it’s not mentioned in the plan description) ask the provider whether the software supports such a feature.

Cloud-based accounting software

Just like most types of software, accounting software is mostly cloud-based so you can get access to it from any computer, location and at any time. You just need access to the Internet. Such feature will help you operate your business remotely.

Access to accounting software from mobile devices

Accounting software may go with a mobile app which will allow you to track essential data and perform urgent tasks on the go.

Accounting app features may be different from their desktop version. Make sure to double check that all the needed features are included in the app.

Some apps may be compatible with either iOS or Android platforms. Make sure you check whether the app is compatible with the platform that you use.

Make a Decision

If you choose accounting software, we advise you to pay attention to the following criteria:

  • The size of your business. Will a free or standard version be enough for your company’s needs?
  • The cost of accounting software. What is your budget?
  • Accounting software features. What accounting features do you need?
  • Usability features. Will it be convenient to use this particular accounting software?

What factors can influence you when choosing accounting software?