Choosing (or changing) your accounting software
Given our ever increasing reliance as business owners on the right choices in terms of business tech, having the right tools and systems in place is crucial. Amongst the many variations, accounting software can often be overlooked amongst more glamorous options, but the right choice can help you manage your finances more effectively, save time and reduce the risk of costly errors.
Finding the best solution, or a new solution if you need it, can take a lot of time, particularly if it’s an area where you’re less than confident. This post will give you some options as you consider your choice of the most suitable accounting software for your business and include our opinions along the way!
The two main types of accounting software are desktop and cloud software.
- With desktop software, the more ‘traditional’ type of accounting system, your accounting software and financial data are saved on your server, desktop or laptop computer after manually installing it.
- Cloud accounting software is stored online so there’s no installation required, and updates are usually applied automatically needing no intervention. You can avoid those lengthy update sessions!
Each type of software has pros and cons, but the advantages of cloud technology mean it will, in most cases, suit most time-poor business owners who run from one task to the next.
The real beauty of the cloud option is that you can access your information from anywhere you can get online and see your date in real-time. That enables you to be productive whilst out of the office, whether that may be issuing invoices, reconciling your bank or adding costs to different projects. If you want to outsource any aspect of your bookkeeping or accounting, it’s really easy to grant access to a remote worker, freeing up office space and increasing your options in terms of recruitment.
It also makes recording expenses and income easier, as you can integrate your software with other apps, such as ones that allow you to collect and store expense records. You can also integrate bank feeds without the need for manual imports or third party plugins.
Your bookkeeper and your accountant can see your data in real time too, enabling them to provide more accurate and relevant advice but also support for those irregular issues that may crop up. Unsure how to deal with an unusual situation? Give your bookkeeper or accountant a call and they can probably take care of it for you, far quicker than if you have a go, get confused and have to ask them to unravel it!
Before you start looking for the right accounting software, take some time to consider the needs of your business and to narrow down your options. It’s important to focus on software that will actually help you in the long run.
The best place to begin is by identifying your primary needs and objectives. Think about things like:
- Do you need stock management?
- Are you looking for integration with other software applications?
- Do you travel a lot and therefore require an online solution?
- Do you need to manage expenses of a field-based team?
- How will you manage any debtors?
All of these may have an impact on your final decision.
A growing business has changing requirements, so, though you may not know exactly how things will develop, it’s important to choose accounting software that can scale or flex with your business.
Look at how your preferred options will handle an increasing number of transactions, users and features. What, if anything, will happen to the cost of the subscription? Picking one that can scale with you now will save you the hassle of switching to a new system later down the line, with the implications that change will have in terms of training and down-time.
Scalability is another positive, in our view, of choosing cloud accounting software. For example, Sage’s desktop software forces you to purchase a user licence for each additional user. With Sage’s cloud offer, you can enrol up to 20 users onto the system, while Xero allows unlimited users.
The majority of users in your business will probably not have an accounting background, so it’s crucial to choose software that is easy to understand and manage, or even the best processes will fall down.
Most providers offer a free trial so make sure you take them up and play with the system. Can the people who need to use it follow the instructions? Obviously, there’ll be a period of familiarisation required, but it should feel doable from a very early stage.
Take a look too at providers’ resource libraries and check what support systems they have in place. You’re bound to need them at some point, and probably not at a quiet time of the year when you have nothing else to think about, so make sure you know what support you can access and how to do so when it’s busy and there’s a lot going on.
Your accounting software probably shouldn’t exist in isolation these days! The more you can connect software together, the more flexibility you have to streamline your processes.
If this would be helpful, or is something you’re even just starting to consider, cloud accounting software may be the best choice for you, as there are lots of opportunities to integrate it to other types of software. Information can go into the accounting software and feed from there to other software or come the other way. This reduces human intervention, errors and delays.
Xero, as an example, has what’s called an ‘Open API’ and positively encourages the development of Apps that can support their software. Other software is much less collaborative!
Before you make any decision, check reviews for the software you’re considering and ask people you trust for recommendations. Understand why they’re making the recommendations they do and work out how relevant their opinions are to the way you’d use the system.
Online reviews and testimonials from real people and businesses similar to yours, in particular, can provide invaluable insights into the pros and cons of each accounting software option available to you. Pay close attention to factors important to you, such as ease of use, quality of customer support, reliability and overall user satisfaction.
You could also reach out to business owners and industry professionals for their recommendations and experiences. Their first-hand feedback can help you make a more informed decision.
We mentioned above that many accounting software providers offer trial periods or demo versions of their programs. If you haven’t already done so, make sure you take advantage of the time available in a trial to test all the features and integrations and to find out whether it’s the right fit for you. A few hours spent now could save you dozens in the future.
Accounting software varies in cost, depending on its features, the number of users it supports and other factors. It can also vary in payment methods, although most are now covered by a subscription model with different package levels depending on your needs. Do take the time to compare the different packages and the related fees and find out how you can step up or down if you need to.
Keep an eye open for extra costs that could be incurred. For example, there are several ‘add-on’ options for Quickbooks, Sage and Xero including payroll, CIS and different reporting options.
In one respect, these can inflate the headline cost of the software, but equally, you’re only paying for the modules you’ll actually use!
Finally, check which accounting software your accountant is comfortable with and which they think would be best for your business. They need to be proficient with the software you choose and should be able to explain why they recommend one package over another for your business, though some firms only work with one package, as they can gain efficiencies that way.
Your accountant should be able to help you get set up, and potentially provide some initial support if necessary.
If you choose a software that your accountant is unfamiliar with, for example because it’s a cheaper solution, expect them to be unable to provide as much support or information. It may well cost you more in their time required at year end than you’ll save in subscriptions during the year. Many accountants these days are niching to the point that they’ll only look after clients using one particular system, so check before you make a decision.
For example, we primarily deal only with clients using Xero or Quickbooks. There are a few exceptions, but we know those systems really well, and know we can provide great value and assistance to their subscribers. They are also suitable to a wide range of businesses, and certainly enough to keep us busy!
The final decision on the best software for your business should rest with you, so make sure that you make a fully informed decision.
If a client asks us to support them in that decision making process, we’re very happy to do so, but we won’t be prescriptive. We’re open about our preference for cloud based software, and the majority of our clients are Xero or Quickbooks users, but we can be flexible too.
If you’re thinking of changing software for whatever reason, we’re very happy to chat through the information you’ve come up with, and help you finalise that choice, or implement the move, so please get in touch. There are further considerations once you’ve chosen the package, largely around the timing of any move, so please do get some advice before you jump into the process!
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