How To Pick The Right Accounting Software For All Types Of Businesses

Accounting softwares is a necessity for all types of businesses because all of them have financial transactions that need to be recorded with due compliance. Organizations, whether small, medium or large businesses, all conduct financial transactions pertaining to their respective industries on a daily basis which consists of sales to customers, purchases from vendors, capital resource allocation within departments, salary payments and more. The sheer number of transactions, reports and financial statements to be generated can be a cumbersome affair for the accounting department if done manually like in the past, so automation is the best advancement in such an aspect. Today, accounting and management professionals can generate customized reports and projections based on data that an accounting software extracted from scanning multiple invoices, and integrated third-party platforms that the organization conducts business through in order to analyse and make better financial decisions for their growth. Such is the utility of an accounting software in all kinds of businesses, be it a multinational corporation or a partnership firm, that they would be paralyzed if the accounting system collapsed for a day. 

However, not all accounting software are meant for all organizations; there are several vendors who provide accounting software depending upon the scale of business and the industrial requirement of the organization. It is no surprise that the question “how to pick an accounting software that is suitable for a particular organization or type of business” is often searched on Google. It can be a time consuming process if you browsed and researched several top accounting software and ERP brands. So, we intend to help you save time and narrow down your search radius by giving you a guideline that will help you arrive at a decision quickly.

In this guide, you will find the factors to look for in an accounting software to serve your business’s financial recordkeeping needs, as well as 9 things to consider before buying one.

Factors of an Accounting Software:

 

• Features: The features that an accounting software includes is the primary reason that you choose a particular vendor. To ensure that all of your accounting and financial reporting requirements are fulfilled without paying for too many add-on features, only opt for an accounting software that provides for all the necessary functions in its inbuilt system. Does your business require both accounts receivable and payable tools? Do you work on a cash basis but will move to an accrual system in the future? Is your organization based on manufacturing or does it provide services? If yes, do you need a payroll and inventory management system in the accounting software? All these are the important factors that will help you decide the features necessary to efficiently run the finance department of your business with the help of accounting software.

 

• Cost: The cost is perhaps the first question that arises in the mind of a business owner while investing in an accounting software. It is natural that you would want to extract a value that is worth the money you have spent in acquiring, installing and maintaining the accounting software, like any machinery you own. The cost module of accounting software solutions are divided into a one time purchase or a subscription model and both have their pros and cons. A subscription model can be flexible to your business’s scalability and growth since you can move up in the packages as and when you require it, while the yearly subscription may cost you more in totality. Opting for a one time installation of an accounting software can be a heavy expense in one go since it provides top to bottom solutions for an unlimited number of systems within your organization from day one, however you may have to upgrade it by paying extra when the updates and technology become obsolete. The cost factor is variable depending upon the timeline you have planned for your business.

 

• Usability: The user experience of an accounting software is an underrated factor and requires more attention, since ultimately the functionality of the software is about how user friendly it is. Not all of your professionals working at the organization are accounting specialists who would understand the nitty-gritties of the system. Hence having a simple interface that is free of clutter and complicated processes works best to help the user finish the tasks given at hand in the shortest possible time. The purpose of software integration and automation is to lessen the mundane tasks while giving space to bring in more productivity in less time.

 

• Cloud based or Premise based: There are accounting software vendors that provide cloud based services to multiple business organizations, while others provide premise based packages. While the cloud based accounting software is hosted by the vendor's server, you can remotely access the accounting system as long as you own a computer and a good internet connection. The cloud based system also has the advantage of giving users of mobile access while on the go to view reports and projections. A premise based accounting software is installed within the organization’s server and requires a technical expert to be onboard in case there are any complications. The premise based software are also limited to the establishment, but will work with or without the internet if one needs to access data, unlike cloud based servers.

 

• Security: Both internal and external level security are important for accounting software of a business, because financial data consists of information regarding transactions to creditors, debtors, vendors and other sensitive content. Protecting your information from theft or exposure is one of the primary objectives of using a good accounting software. With automated payments and receipt of payments, the details of such transformation can be fraudulently misused. For the same reasons, accounting software is integrated with top notch encryption, two-step verification and other sophisticated methods of securing your organization, vendors and client’s privacy. Also, multi level clearance protocols as per designation is another important step in providing data security, as some sensitive content is only accessible to higher management roles. 

 

8 Questions To Ask Before Buying An Accounting Software

Once you have a perspective of the main factors to consider before investing in an accounting software, asking yourself a series of 8 important questions will help you gain better foresight into which vendor can provide you the full package of a stellar accounting software. Feel free to consult your accounting professionals or head to understand what they need from an accounting software, because ultimately they will be the ones using it.

 

• Do I Need A Cloud-Based Accounting Software?

A cloud based accounting software can be used remotely using just an access code given to each user according to their designation and clearance level as long as they have a good internet connection. The data can also be accessed on the go and is secure with high levels of encryptions. A cloud based accounting also facilitates mobile use for important report generation, which can come in handy to accounting professionals. Considering the global pandemic where several organizations are working remotely, cloud based accounting software is the best choice since office premises remain partly or completely unoperational. If your employees are working from home, or travel a lot, it would be a good decision to subscribe to a cloud based accounting software solution package.

 

• What Features Does The Accounting Software Need To Possess?

Some of the features that are important to all organizations are budgeting, sales tracking, number of systems supported, credit card payments, business tax reporting, inventory management, merchant account support to accept and manage customer contacts, payroll,  working with current contact management software, estimates and projections, and invoicing. If your business has any specific features required to run your operations smoothly through automation, ensure that the vendor provides it in their124]] package. Sometimes such features are only available as add-ons, so it is up to the discretion of the employer to decide which one fits.

 

• What Are The Options That Work Within My Budget?

As we discussed in the section above, you can choose either a subscription model or a one time installation, which depends on what payment model fits the business’s budget the best. The advantage of the subscription model is that one can start from a small package, gradually moving up as and when the business expands and also that there are regular updates involved in the solution. The one time purchase gives your business the license to use the software perpetually and consists of installing updates rolled out by the vendor. However, it can become outdated as new technology and versions are released. There are inexpensive and basic accounting software available for small businesses and sole proprietors, while there are highly advanced and technically intricate ones for bigger businesses which are highly expensive.

 

• Does The Accounting Software Integrate With Third Party Platforms and Plug-ins?

Integration with third party platforms and plug-ins help an organization reduce data redundancy and repeated entries which take up time and effort from the employees. An automated and integrated accounting software can pick figures from parallelly running applications and record the transactions for the same without requiring multiple inputs. Being connected to third party payment apps that can make seamless payments and receive secured transactions on demand is another feature of such integration.

 

• How Safe Is the Business’ Data?

Make sure that the accounting software that you pick comes with solid security measures which include encryption, two-step verification or even more advanced levels of data protection measures depending upon the sensitivity of the records. The accounting software should also enable segregation of access among different departments and levels of seniority within the organization.

 

• Is The Accounting Software Simple To Use?

A great accounting software needs to be simple, effective and easy to use with a great user experience. Not all the professionals working on your accounting system will be accounting experts, so the interface is required to be easy to grasp and adapt to. A good troubleshooting feature can help such employees find the solution to simple problems faced.

 

• Do They Offer Training and After Sales Support?

After sales services are the mark of a reliable vendor. Inquiring about their post sales support with their CRM team who back your employees up in case of any technical glitches or conceptual confusions is one way to go about it. Another way to find out the credibility of such claims is to read genuine customer reviews to discern for yourself. Having one of their technicians or experts train the employees with the workings of the accounting software will also help your staff get acclimated to it quickly.

 

• What About Upgrades, Updates And Tax Law Compliance?

Accounting rules, Compliance, and Tax laws are subject to changes as and when the government implements it. Usually every yearly budget or an emergency announcement for filing important documents such as returns are times when such compliances change. Accounting software systems that provide audit-ready and tax compliance features require to be updated in order to adhere to the changes introduced. Ensure that the software you purchase offers instant notifications and automated implementation through prompts and corrections due, since this can save you penalty of delays and non-compliance.

Conclusion:

Now that we have gone through the details of the ideal accounting software for any business type, we hope that choosing one becomes an easier process for you. No matter what business you belong to or what scale your organization operates on, an accounting software should be able to grow with the organization, facilitating scalability. To understand which of the vendors have the most aligned accounting software to your organization’s preferences, don’t hesitate to use their free trial period to understand their layout and features better. At Deskera, we provide all kinds of businesses the perfect package for all their accounting requirements with tax and audit compliant accounting software. Our cloud based solutions come with a free trial period while you can experience seamless functions through award winning services. Our after sales support is one of the best in the industry and will cater to any roadblocks, small or adverse.