Looking for Accounting Software for Your Company? Here are 10 Steps to Selecting Accounting Software

Selecting the right accounting software for your company is one critical decision that can significantly impact your business’s financial management and efficiency. As important as this is, a lot of businesses gets this horribly wrong.

Whether you’re a small startup or a large corporation, the right accounting software can streamline your financial processes, save you time, and help you make informed decisions.

As an information technology accountant, I am here to assist you in this important task by providing you with this comprehensive guide with step-by-step instructions to help you select the most suitable accounting software for your company.

Step 1: Take Inventory of Your Accounting Needs

Only very few people venture into important tasks without firstly taking inventory of what they intend to achieve. The result from these kinds of careless adventure is quite predictable – resounding failure.

Before diving into the selection process, you must have a clear understanding of your accounting needs. This is not rocket science. You can follow the steps stated below:

1. Identify your business size and industry: Different businesses have different accounting requirements. The software that meets the needs of a small retail store may not be suitable for a manufacturing company or a company with global presence.
2. Set your budget: Determine how much you’re willing to invest in accounting software. Remember that the cost can vary widely, so it’s essential to balance your budget with your business requirements. You can always move to a new vendor if your need changes, so don’t be scared of starting small.
3. List your specific accounting tasks: Make a list of the accounting tasks you need the software to handle, such as invoicing, payroll, expense tracking, tax calculations, and financial reporting.
4. Considering expansion and scalability: Think about your company’s growth potential. Will the software you choose accommodate your needs as your business expands? It will not make any economic sense to go for an accounting software that can only accommodate six zeros while you anticipate a business that would be raking in revenue in excess of nine zeros within months.

Step 2: Choose Deployment Method

Technologies like accounting software can be deployed in two primary ways: on-premises or cloud-based (SaaS). Each method has its pros and cons, therefore, must be taken into consideration as part of the decision making process.

On Premises Accounting Software:

On premise standalone accounting software accounts for over 65% of the solution that small and medium businesses use. All you need to do is simply purchase the software, install them on your computers and you are up and running. As easy as this may sound, it is always worth the effort put into analyzing the ups and downs of a stand-alone on premise accounting software. Below are some pros and cons to be aware of.

Pros:

• Provides more control over data and security.
• One-time purchase or subscription with no ongoing fees.
• Suitable for companies with strict data privacy requirements.

Cons:

• Typically requires higher initial setup and maintenance costs.
• Limited accessibility, as it’s tied to a specific location or device.
• May involve more IT support and updates.

Cloud-Based (SaaS) Accounting Software:

Cloud based accounting software solution in gradually gaining traction amongst small and medium sized businesses. This is really the future of accounting software but needs to be evaluated against the unique requirements of a business.

Pros:

• Accessible from anywhere with an internet connection.
• Lower initial costs and predictable monthly subscription fees.
• Automatic updates and backups handled by the software provider.

Cons:

• Data security concerns (although most providers have robust security measures).
• Ongoing subscription costs can add up over time.

 

Step 3: Research and Shortlist Accounting Software Options

Now that you have a clear understanding of your needs and deployment preferences, start researching accounting software options. Key considerations during this phase include:

Read Reviews and Get Recommendations: Look for reviews and recommendations from trusted sources, industry peers, and online communities.

Compare Features: Create a list of software options and compare their features, such as invoicing, payroll processing, inventory management, tax support, and integration capabilities.

Check User-Friendliness: User-friendliness is crucial. Ensure that the software is intuitive and easy for your team to learn and use.

Consider Integration: If you use other software (e.g., CRM, eCommerce platforms), check if the accounting software integrates seamlessly with them.

Assess Support and Training: Evaluate the availability of customer support and training resources. Quick and reliable support can be invaluable.

Step 4: Request to see demo and test run the software

Before making a final decision, request demos or trial versions of the accounting software you’re interested in. During these trials:

Test the User Interface: Ensure that the software’s interface aligns with your team’s preferences and is easy to navigate.

Input Sample Data: Use your own financial data to see how the software handles your specific accounting tasks.

Check Reporting Capabilities: Verify that the software can generate the reports you need for decision-making and compliance.

Evaluate Customer Support: Contact customer support with questions and assess their responsiveness and helpfulness.

Step 5: Consider Data Security

At the end of the day, it is the responsibility of a business to secure its asset (physical and information). Data security is paramount when dealing with financial information. Ensure that the accounting software you choose offers:

Data Encryption: At the very least, data should be encrypted both during transmission and while stored in the system.

Regular Backups: The Software should automatically back up your data to prevent loss in case of system failures.

Authentication and Access Controls: Implement strong user authentication and restrict access to sensitive financial data to authorized personnel only.

Compliance with Regulations: Verify that the software complies with relevant data privacy and security regulations that governs your jurisdiction.

Step 6: Assess Pricing and Scalability

One of the main reasons of investing in any piece of technology ist o save cost. So, carefully review the pricing structure of each accounting software option. Closely evaluate the followings:

• Subscription Costs: Calculate the total cost of ownership, including initial investment, monthly or annual subscription fees.
• Add-Ons and Upgrades: Check if there are additional costs for add-on features or upgrades as your business grows.
• Scalability: Ensure that the software can grow with your business without significant disruptions or additional costs.

Step 7: Gather Feedback and Make a Decision

A very important step in any software acquisition cycle ist o gather information from the potential end users. Therefore, before finalizing your decision, gather feedback from key stakeholders within your organization, especially those who will be using the accounting software regularly. Consider their input, as they can provide valuable insights into usability and functionality. Make a well-informed decision based on the information you’ve gathered and the needs of your company.

Step 8: Implement and Train

Once you’ve chosen the accounting software, plan and execute the implementation process. This may involve data migration, system setup, and training for your team. Ensure that your employees are comfortable with the new software and can use it effectively.

Step 9: Monitor and Evaluate

After implementation, closely monitor how the software performs in real-world scenarios. Continuously evaluate its effectiveness and whether it meets your business’s evolving needs. Be prepared to make adjustments or consider other options if necessary.

Step 10: Stay Informed and Adapt

Technologies especially business related technologies continually evolve, with new features, updates, and technologies emerging regularly. Stay informed about industry trends and be open to adapting your accounting software if better options become available. In conclusion, selecting accounting software for your company is a significant decision that should not be rushed. By following these tips, you can make an informed choice that aligns with your business needs, promotes financial efficiency, and facilitates growth. Remember that the right accounting software can be a valuable asset in managing your company’s finances effectively.