This great advice on how to choose accounting software comes to us from veteran bookkeeper, Ed Becker of “Outsource Your Books.” Ed’s also an accountant so he knows how to prevent you from making a costly mistake. Thanks, Ed!
Ever get stuck trying to make heads or tails of all the different options for small business accounting software?
For many small business owners, the selection process is overwhelming so they just go with the “default” choice of QuickBooks.
For lots of businesses, QuickBooks is a great small business accounting program, but like anything else, wouldn’t it make sense to evaluate what’s best for your business up-front?
This is especially true when you consider the long term commitment you’re making when picking accounting software.
Features and functionality vary greatly among various options for small business accounting. Software that serves one company well may have limitations for your particular business model or industry.
Rule #1 is to keep in mind that accounting software programs are designed for specific purposes and to handle specific situations. While some small business accounting packages may appear user-friendly directly off-the-shelf, they may not have the customization options or industry specific features that technically more complex packages offer.
Often, business owners simply don’t have the time or knowledge to evaluate this up-front. That’s too bad because discovering problems with your accounting software down the road can be costly to remedy.
Prior to purchasing small business accounting software, keep these factors in mind to help make your selection easier:
- Ask a Professional: Your CPA or advisor may be familiar with different industry software and can make a recommendation. More than likely, your CPA has used or seen many software programs and can best gauge what fits your needs. It is additionally beneficial to include your CPA in this decision as they will need to support your business and be able to use the software you ultimately purchase.
- Functionality: Is this software compatible with your operating system? If you need Web access to your data, does the software allow for that? And don’t forget, the software must interface with other programs your business runs. Will this software do what it sets out to do? Does it have all the bells and whistles you will need as your business grows? Make a list of all the functions you need to perform in addition to a wish list of items you would like to see produced with the use of a new software program. Knowing how you want the software to work for you ahead of time will help determine what you need to purchase.
- Cost: Prices range greatly for accounting software. After determining the type of software you need, determine your budget and then shop around to find a system that falls within this budget. Keep in mind that some software is sold “per seat” (also called “per user”). Calculate your current per seat costs and future costs assuming you grow. All too often, business owners will purchase expensive software only to discover at a later date that they had used a mere 5% to 10% of the software’s total capabilities. Why buy what you don’t need?
- Staffing: Do you currently have a bookkeeper who knows the software you plan to purchase? Will you be able to hire someone who will? Several basic, off-the- shelf software products are well supported by the manufacturer and known throughout the industry. Purchasing a unique, tailored software program may make the task of hiring new employees more difficult.
There are many great software product options designed to help you manage your accounting and finances. Take the time to consider which best suits your needs.
About the Author: Edward Becker, CPA, President of Outsource Your Books, LLC. Outsource Your Books is a New York bookkeeping firm that services businesses both locally and nationally. Questions? Contact Ed at (516) 393-5620 or email [email protected]
Keep reading for more of our tips on choosing accounting software that is right for you.
And if you get stuck, don’t be afraid to hit the Panic Button. It’s the only help desk for small businesses online. No nonsense. No kidding.
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{ 3 comments… read them below or add one }
There are lots of accounting software solutions to choose from, but choosing the best is definitely good for your business. You have to know the specifications that are appropriate for your business. And for sure, Quickbooks is a good choice.
Business Accounting Software is utilized by businesses to record a business accounting action. The software is an application which usually records accounts receivable, accounts payable, trail balance and payroll and other applications. Depending on the companies requirements and how large the corporation staff complement is, the application software can either be developed ‘in-house’ and exceptionally designed for the companies needs and requirements, or it may be bought as a complete package form a third party, one other aspect that could be considered is combination of application software and a third party package, this could also be installed with community modifications.
Steve, if I’m a solopreneur and I work on a project or an hourly basis, what easy- to- use and inexpensive best small business accounting software would you recommend for my small business?