7 STEPS TO CHOOSE ACCOUNTING SOFTWARE

7 steps to buy the best Accounting Software for your business

 

Accounting software is a type of computer software used by accounting professionals to manage accounts and perform accounting operations. Accounting is the systematic practice, work or process of communicating and recording financial information. Accounting software helps to gather all the financial information under one roof. The reports generated by the accounting software helps the management in making important decisions.

Benefits of Accounting Software

  1. Simplification

Accounting software helps in simplifying work. Work that is usually done with lot of manual labour and time involved can be simplified through automation. Also accuracy of data can be maintained. Manual errors are avoided since calculations are automated.

  1. Cost saving

Accounting and finances systems automate core calculations and administrative procedures, and take control of your revenue framework so that you won’t have to outsource finance management to an external expert.

  1. Full financial transparency

From an accountant’s or an auditor’s point of view, the highlight of good accountancy systems is that they avoid costly and recurring human errors. In the business scenario, calculating inaccurate totals or failing to report data in time can lead to a crisis, and that’s where automating calculations is most useful.

  1. Accurate forecasting

Accounting software helps in providing reports that help the management in making important decisions. Accounting software gives numbers a meaning, helping you understand where to cut expenses or where to invest more. With a clear overview of your current financial state, you will find it easier to develop smart strategies and allocate resources the right way.

  1. Productivity

Should a business owner have to choose a single suite of digitized services to improve performance, his first option should definitely be accounting software. These systems drill deep inside the most cumbersome, day-to-day tasks of companies, collect, organize, and analyze their most sensitive data, and what is most important, make smarter use of their money.

  1. Tax compliance

Many of today’s top accounting systems are dedicated to payroll assistance and reporting, and adhere to tax regulations automatically

  1. Improved relationships with customers

Most accounting systems nowadays work around effective billing and invoicing, and prevent all sorts of delays and miscommunication. They are also easy to personalize on the business’s behalf, and thus, make company performance appear more professional and credible.

  1. Security

Financial data is the company’s most valuable information and must be prevented from falling into the wrong hands or getting lost by mistake

HOW TO SELECT THE RIGHT ACCOUNTING SOFTWARE

When it comes to choosing accounting software there are a lot of options. But not all accounting softwares can suit your business needs. It is important to consider the needs of your business and factors such as budget and goals and users to select the right accounting software.

The following are the factors to be considered before selecting a software.

1.Business Goals

Analysing your business and determining what you need from your new accounting software is the first and most important step when choosing a new system.Few questions need to be answered before picking the software

  1. what are your growth plans for the next 3-5 years which will influence your long term planning of what you need from your system today and in the future?
  2. Do you want a fully integrated accounting software solution that can be used across your entire business, or are you looking for a standalone accounts system?
  3. Do you want an on premise solution or do you want to have a cloud solution
  4. 2.Requirements

What do you need from your software and what are nice to haves? Entry level software does the basics well such as key financial reports, VAT, customer invoices and records.If you need more powerful requirements such as multi currency, individual price lists per customer, integrated manufacturing, CRM, costing, or powerful, real time BI reporting tools then you’ll probably need to be looking at a more advanced accounting system.

3.Know your budget

Have a clear budget in mind and be realistic about what you can afford. If budget is an issue, why not look at modular based software that you can add to as your business grows? Don’t try to buy all the applications straight away, buy the ones you need first and add to your solution gradually.You should also consider your cash flow and how you wish to pay. Would paying monthly improve your cash flow via an on premise subscription model or Cloud based instead or would you prefer to buy upfront?

4.Scale

You don’t want to be held back by your accounting software in a year’s time. Therefore, it’s essential to look at software that has the capability to grow with your business. For example, does it give you the flexibility to add additional users and companies easily and quickly? If you’re a retailer or manufacturer, it also means investing in software that can store a larger number of transactions or lets you track stock in multiple warehouses.

 

  1. Users of the software

When selecting accounting software, involve the people who would be using the software like payroll managers, credit controllers or account managers. Invite them to the product demos so that they can understand how to use the software and they can also identify if the software.

  1. Software reseller

Depending on the software you choose and the amount of tailoring to your business requirements, most businesses prefer to deal with a local Partner. If this is the route for you to take then you will be working closely with the reseller to implement the software so it’s important that they are a good fit for your business.

  1. Software Provider

Look at customer testimonials to see how they are supporting customers in the same industry as you. What challenges do they face and what benefits are they seeing from the software? Has the company won any awards? This is a good sign that the software you’re looking at is industry leading. Also consider the reputation of the software provider. Have they got a track record and do you feel confident they’ll be around for many years to come. You’ll need to bear this in mind for future software upgrades, development and support.

Essential Steps to be followed for choosing an accounting software

  1. Get feeback from the employees who will be using the software. It will help in identifying what kind of software would suit your business needs.  If your small business is large enough, with different departments or divisions, you can form a technology committee that has at least one representative from each significant department or division evaluate the software programs that you will consider purchasing.
  2. You should have each employee or representative in the technology committee prepare a needs analysis and a flowchart of their significant processes. The needs analysis should be a list of the requirements that each employee or department needs to conduct its day-to-day tasks. The needs analysis will outline the requirements that you have for you accounting software, which you can provide to your vendor to help ascertain whether the software package meets your requirements
  3. You should establish a budget for your accounting software. I recommend establishing a budget as a range of prices that you will consider purchasing ​because you may find that a more expensive accounting software application will automate more tasks so its increased costs can be justified
  4. The accountant will have knowledge and experience of what other small businesses are using and may have experience using different accounting software programs as an end user. The technology consultant may be able to give you an idea of any major technology issues you might encounter when implementing a new accounting software program based on the specifications, such as whether it is compatible with other outside programs you need for your business or new hardware you may need to ensure that the program runs properly that may factor into your decision-making process.
  5. You should demo any accounting software program that is on your short list to purchase to ensure that it will meet your needs. You may be able to request a free trial of the program as well if you contact the vendor. You can have your employees run their day-to-day tasks on the trial version so you will get an even better idea on how the software stacks up against its competitors.

CONCLUSION

Software is supposed to make it easier to run your business, but too often it is a source of frustration and expense. The proper program will help you manage cash flow, analyze sales and improve efficiency while the wrong program can throw your financial records into a tailspin that will cost you both productivity and money to recover from. It is important to have a game plan to select software that will work for your business without breaking the bank. There are hundreds of products available and they come in a myriad of configurations and technologies, so here is a simple guide to finding the right tools to get the job done

Also refer https://www.reachaccountant.com/erp-software-pos-software-blog/best-accounting-software/

 

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