5 THINGS TO CONSIDER WHEN CHOOSING AN ACCOUNTING SOFTWARE.

5 THINGS TO CONSIDER WHEN CHOOSING AN ACCOUNTING SOFTWARE.Currently there are quite a number of accounting software appearing in the market. And I am referring to the relatively less popular software that most vendors are selling at the peak of their business due to the availability of government grants, such as the Productivity and Innovation Credits Grants, and ISPRING, etc.

However, not all software are created to suit all businesses, and it is important that you consider the various functions and features of an accounting software to see if the software really suits your business needs.

I will share some of my pointers in this post to help you figure out if a particular accounting software is right for you.

 

1. Understand how your business operates.

As you all know, accounting software may have similar features, such as having the capability to generate invoice or to generate financial reports, but it is more important that you understand how your business operates first.

For example, a wholesale company will need an accounting software that is able to do inventory management. Do not assume that all software come with the same features.

Below are some of the common features and functions that the typical accounting software include:

  • Sales tracking
  • Inventory management
  • Merchant services to accept credit card payments
  • Management of customer contacts or integration with CRM
  • Business tax reporting
  • Payroll management
  • Budgeting
  • Multi-Currency Features

 

Understand what your business would require from the software before making the commitment. You can also consult your local accountant to assist you to determine your needs and how it can help you in your process.

2. Set a budget

The cost of an accounting software is definitely a key factor that may affect your decision in purchasing one, especially when a single off-the-shelf accounting software could range from $500 onwards. 

A more complex software, such as one that is integrated with CRM or has a cloud-based operation, will cost higher. The estimated cost for such accounting software is as high as $15,000 (price aligned with PIC bonus). 

In short, always compare among a number of accounting software and carefully consider their costs and the features and functions that accompany them. Do not simply be attracted by the dollar you can receive by claiming through government grants, as some software do not really cost that much. You may be just wasting the Government Grants on a non-productive product.

 

3. Do you need to pay for maintenance fees/ hidden cost?

For a more complex accounting software, you might need to pay a certain maintenance fee. Companies may charge you for troubleshooting errors, or deleting/adding accounts profile. Regular maintenance fee may increase your operating costs and this isn’t good for your company’s bottom line.

If you are unsure about the fee structure, do ask for transparency on the potential costs that will be incurred due to any updates/changes. By doing so, you are able to forecast the cost better.

I would not recommend to use a system that have regular maintenance fee, as most of it do not allow you to do any changes by yourself (closed source).This also allows them to tie you down with them for a longer period, and makes it difficult for you to change to another software. 

 

4. Do you need to integrate?

You should review what other systems and tools integrate with your accounting software. For instance, do you use a CRM? Or an ERP? What about an incentive compensation program? Do you need to integrate with those systems? And even if you don’t need to integrate, would integration enhance efficiencies and streamline processes?

You might also want to determine with which accounting software your bank integrates. Integration with your bank accounts can streamline processes considerably.

 

5. Does it come with free trial?

Similar to buying a car, you will need to test out the software to see if it’s fit your expectations. You wouldn’t want to waste your money in getting something that you can’t utilise.

Today, I see that most software come with a free trial which lasts around 7 days to as long as 3 months, depending on the complexity for transition. This give you the advantage to explore the features and test whether it fits your purpose before making a longer-term commitment.

A suitable duration for a free trial will be around 1 month. This amount of time would be sufficient for you to identify the capabilities of the accounting software.

After considering all these factors, you should be more or less ready to make a concrete decision on whether or not to purchase an accounting software. If you decide not to purchase any software, you can always outsource it to an accounting firm to do the task for you, which will save more time.

Are you still rushing to get your accounts up to date?

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