8 important determinants for choosing an ideal accounting software

Blog / POS
1. Online or Offline {Online or Offline}
The first question to ask yourself is: Do I want an online or an offline desktop program?
How important is that to you? Well, most companies nowadays rely on cloud-based software because it offers a lot of advantages over traditional offline software. However, some businesses such as retail stores require speed and do not always connect to the Internet. For them, offline POS systems are the best bet.
Advantages of Cloud Accounting Software:
There is no need for installation. All you have to do is register and start entering your transactions.
You don't have to worry about updating your financial statements as all changes are paid automatically. Online software is always up to date.
It can be accessed from any device connected to the Internet at any time.
Cloud accounting software providers take care of backup and maintenance, saving you cost.
Data is always synced across all your desks.
Possibility to integrate with other cloud-based applications.
When you have to purchase offline or desktop-based software:
You have a retail store and need to generate a few hundred invoices across the counter.
You do not have an internet connection at your work site.
It is highly recommended that you go for an online accounting software, as you will have your financial statements on tip-up even when you are not in the office.
2. Data Security {Data Security}
Skip this point if you choose to switch to an offline accounting package. If you are thinking of going ahead and considering an online accounting app, data security is the most important aspect to check.
Basic things to check:
Ask the company how the application data is stored. In most cases, this information will be available on their website. Here's an example. Some of the trusted cloud hosting providers are Amazon and Rackspace. If your accounting software provider hosts the application on their servers, ask them what security measures they take to protect your data.
Check if these services use HTTPS connection. It's very easy to check, just open the app and see if the URL in the address bar starts with https://. Usually, this is highlighted in green. You can even click on that to view the security certificate. HTTPS ensures that data transmitted from your computer to the software company's servers is encrypted and cannot be seen by hackers.
3. Features {Features}
Make a list of the basic features that you desperately need in any accounting software. Here are some of the features that should be part of a good accounting package.
Create invoices and customize the look and feel.
Track expenses by categories.
Inventory management, inward and outward stock movements and wastage.
Performing bank reconciliation by importing bank transactions.
Create purchase orders (PO) and record stock purchases.
Create and manage taxes.
Register daily coupon entries.
Managing the list of customers and suppliers.
View accounts payable and accounts receivable.
View balance sheet, profit and loss statement and trial balance reports.
Add additional team members.
Good to have features:
Support for multi-currency transactions.
Option to manage staff and payroll process.
Classification of transactions according to projects.
Control access for each team member.
4. User Interface & Complexity
Most business owners do not have any accounting background. If you happen to have a dedicated accountant using the app, as an owner, you should be able to log in and go through things. Also, it should be easy for your employees to learn the software. Investing in training is a cost and should be avoided.
If the software is stuffed with every possible feature you can imagine, it becomes difficult to use it for your team. So, look for a program that has a simple user interface and doesn't get bloated with unnecessary features. A clean interface makes it easier to focus on important tasks and can reduce the learning curve.
5. Scalability {Scalability}
Many companies make the mistake of buying an application that suits their needs at the time of purchase. Later, when their business starts growing, the accounting software fails to keep pace with the progress, and eventually business owners have to move to another software. Moving data from an existing system to a completely new program can be a pain.
So, select an accounting software that can fit your business needs. Some programs offer only one version of the product and some have progressive versions depending on the type or size of the business. Go for the software that offers an entry level version as well as a feature-rich version that you may not need now but will definitely need in the future.
6. Exit options
Imagine if the company you're buying shuts down operations or discovers a lot of errors a few months after the purchase. In order to save yourself in such cases, make sure that your accounting software provides a data export facility.
You should be able to at least export the ledger or other transactions in excel as most other programs will accept the excel file for import.
If so, as a good practice, you should always backup your data at regular intervals.
7. Hidden Costs
Some software providers may charge fees for support or upgrades. Sometimes, basic software is provided at a lower cost and then you have to buy 'extras' or pay 'maintenance fees'. So, check if there are any hidden costs associated with the software you are planning to purchase.
The best way to find out, is to check the pricing page on the software provider's website. If they sell extension services, those services will be mentioned there.
8. After-sales support {Post-sa

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