7 things to look for in accounting software

Small Business

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As the business landscape continues to evolve in the face of the COVID-19 pandemic, your resources may be more strained than ever. But no matter where you need to cut costs and tighten budgets, one thing that can’t go by the wayside is your accounting.

Managing your business’s accounting can seem like an overwhelming feat, especially when you consider all the other essential tasks on your to-do list. The financial aspects of even small businesses are certainly complex. But there are ways to simplify your responsibilities and automate much of your accounting.

User-friendly accounting software lets you streamline these processes significantly—eliminating hours of mental math, manual data entry, and inventory tracking. The right accounting software can give you the resources you need to put your accounting woes behind you.

So what should you look for in accounting software? Use this guide to help you sort through the abundance of accounting software options and find the right fit for your business.

The importance of accounting software

What exactly is accounting software? Accounting software is a suite of programs designed to help businesses automate bookkeeping and accounting tasks like invoicing and expense tracking.

Small business accounting—from proper bookkeeping and cash flow management to invoicing and inventory management—is essential to your company’s longevity and financial success. However, for many small business owners, accounting processes can be time-consuming and confusing, especially for those without any financial management experience.

The right accounting solution can be a small business owner’s greatest tool. Whether you’re handling your business’s accounting on your own or you have dedicated accounting personnel, accounting software can benefit your business. Accounting software can help you handle tasks such as:

  • Bookkeeping
  • Reconciling bank accounts
  • Invoicing, processing payments, and paying bills (such as credit cards and vendors)
  • Time tracking
  • Completing payroll for onsite employees, freelancers, and others
  • Tracking sales and sales tax
  • Recording expenditures
  • Managing cash flow
  • Generating financial reports (such as balance sheets and income statements)

With accounting software, small businesses can use their (often limited) resources more efficiently. By using accounting software for your small business, you can increase productivity. Better allocate your personnel hours to business development, production, and other essential tasks. And you can spend less time studying bookkeeping, managing time tracking, chasing down payments, or struggling through inventory management.

Small business accounting software can impact the big picture, but it also directly impacts the financial aspects of your business:

  • It can keep your books up to date.
  • It can improve payment collections, as automated invoicing and payment processing make it easier to stay on top of what customers owe.
  • It can reduce errors from miscalculations, incorrect reporting, and missed transactions.
  • It can generate more accurate financial reports and documentation.
  • It can lower costs.
  • It makes it easier to calculate and file business taxes.
  • It can maximize tax deductions for greater savings. You can store receipts for expenses and track mileage within the QuickBooks app.

The many benefits of accounting software make it an essential tool for running your small business more efficiently (and with fewer headaches).

How to choose accounting software

With many different accounting software solutions available, it can be difficult to navigate the sea of virtually endless options. The best accounting software option is the one that’s suited to your company’s needs.

If you’re considering using one for your business, review these factors to ensure you choose the right accounting software for your organization.

  • Features: Not all accounting software is created equal. When comparing programs, one of the most important factors to consider is the specific accounting features. Does the software handle most accounting tasks, including bookkeeping, bank reconciliation, expense tracking, and accounts receivable? Can you send purchase orders and payment reminders through your software? Can you integrate it with other tools your business uses? Keep in mind that many accounting software providers offer tiered packages that allow you to increase the number of features provided for a higher cost.
  • User-friendliness: One of the biggest reasons small business owners avoid accounting software is because it seems difficult to use. You want your accounting software to be user-friendly so you can quickly integrate it into your business model and get your team up to speed in no time. User-friendly accounting software should be well-organized, intuitive, and equipped with support for anything you can’t easily figure out on your own.
  • Affordability: Cost is an important aspect of any tool you’re planning to bring on board your small business, whether you’re seeking bookkeeping software or enterprise resource planning (ERP) help. When shopping for accounting software, consider the program’s outright cost (whether it’s an upfront fee, a monthly subscription, or some other pricing model) and determine if the expense fits in your budget. Don’t forget to account for the overall value of the specific software as well as the fact that you’ll be able to cut time costs for yourself or your accounting staff.

Only you can determine the right accounting solution for your business. Consider your priorities, whether that’s a low-cost subscription fee or a comprehensive solution, and narrow down your options from there. Ideally, you’ll want to find online accounting software that provides you with the greatest value (has the most useful features to meet your business needs) for the most reasonable cost.

There are plenty of software solutions available. Popular accounting software companies include:

  • QuickBooks
  • FreshBooks
  • Sage
  • Wave
  • Xero
  • Gusto
  • Zoho Books
  • Kashoo
  • NetSuite
  • Addon
  • Sage 50cloud

No two accounting systems are the same. Our comparison directory can help you compare these accounting solutions head-to-head and discover which accounting management software best suits your team’s needs.

7 considerations when choosing accounting software

Keep these considerations in mind when choosing which accounting software is right for your small business:

1. Does it have the features you need?

How much help do you need with your accounting processes? Are you an accounting novice, or do you just need extra help to get your eCommerce business up and running? If you’re simply looking to streamline bookkeeping, manage bills and payments (like automated invoicing), and run standard financial reports, fairly basic accounting software may fulfill your needs. However, if your needs go beyond that (like completely overhauling your small business accounting processes or correcting course due to poor cash flow management), you’ll want a more robust tool. A tool like QuickBooks Online can essentially replace the functions of an accounting team (and possibly even your payroll services).

2. Is the software easy to use?

Introducing new software at your business will require a learning curve—time and effort to learn the software—whether it’s just you or a team of associates who’ll be working with it. While there’s no way around it, it’s undeniable that some programs are inherently easier to understand than others.

Understanding your company’s financial data is already complicated, but accounting software is supposed to make it easier, not harder. Some programs can go overboard with overly sophisticated functions and a confusing setup that’s difficult to navigate.

The best accounting software for small businesses is one that prioritizes an excellent user experience—meaning it’s easy to learn, has clearly labeled and organized features, and is simple to navigate. QuickBooks Online has been designed with the user in mind for an intuitive interface that’s earned a reputation for being fairly easy to learn.

3. Is it accessible?

Accounting software that’s loaded onto a single computer is outdated. However, with contemporary online accounting software that lets you store all your data in the cloud, you can access the financial information you need at any time.

With cloud accounting software, anyone on your team (with the sign-in credentials), including your CPA, can use the program on any device. In addition to being cloud based (and accessible anywhere there’s internet access), many online accounting software options have corresponding mobile apps. For example, QuickBooks Online offers apps for iOS and Android.

This could be important for working while traveling, preparing for an investor presentation, or simply keeping tabs on the status of your small business accounting at all times. With a convenient accounting solution, you can enjoy peace of mind anytime, no matter where you are.

4. What are the software’s integration capabilities?

To further cut down on time and make the most out of automation, you should look for accounting software that can integrate with other tools you use. With accounting software that syncs up to invoicing and project management systems, you’ll spend less time copying information over through manual data entry and risking human error when transferring information over.

Before you select an accounting software solution, find out if it can be synced with your banking information and with commerce and transaction tools like Square.

5. Is the platform secure?

Cybersecurity is a top concern for businesses of all sizes, especially those processing online payments. Company and client financial information is highly sensitive and should be trusted to only the most secure programs. From protecting customer payment information to keeping your business’s financial status private, checking any software’s data security is an essential step in the vetting process.

So how do you make sure the connection—and your data—will be secure when using this platform? Companies that understand this priority will make cybersecurity information easily accessible, so if you don’t see it listed in their benefits or features, ask.

For example, all data within Intuit QuickBooks Online is protected with 128-bit SSL encryption and is automatically backed up at all times.

6. Is there a reliable customer support system?

Let’s face it—no matter how tech savvy you are, learning a new program can be challenging. With any new product or service, especially one that can significantly impact your business, it’s important to know whether there’s easily accessible customer support. You may have a question about a certain feature, experience issues connecting your bank account and other apps, or want to search for a tutorial. Regardless, you want to know ahead of time that any support you may need is there (before you run into an issue that halts your workflow).

7. Can you realistically afford it?

As a small business, it’s important to stick to your budget. Getting help with accounting shouldn’t be reserved for businesses with big budgets that can hire an experienced team. One benefit of accounting software is that it offers a more cost-effective way to do your bookkeeping and accounting tasks. Although there are free accounting software options, they typically don’t offer the robust functionality and accounting tools that business owners need to tackle their accounting needs.

When considering new expenses, no matter how essential, it’s wise to ensure the product is a reasonable expense that you can easily carry month to month without jeopardizing your financial stability. After all, the last thing you want to do is rack up credit card debt. While accounting software for small businesses is likely going to be one of the smaller expenses on your roster, services can add up, so you want to make sure you’re a smart spender.

Once you find information on the software’s pricing—whether it’s a standard fee, tiered pricing plan, or custom quote—you should compare your options to see where you’ll get the most value for your money. How do you do that? Take all the above considerations and weigh them against the price.

If it’s worth it, you’ve found the best accounting software for your small business.

Start using accounting software today and see the difference

Simplifying your accounting process is a big step in the right direction to better manage your business finances, make more informed decisions, and take the uncertainty out of tax season.

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This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.

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