Keeping the "books" of a business would have been a literal paper-based process, involving a ledger, lots of columns, and a pencil to record the company's basic financials. But in the digital age, even the smallest companies can benefit from the wide range of small business accounting software products on the market. Not only can accounting software help you reduce human error in your calculations, but it can help you get deep information about your company that you couldn't see in paper form--such as creating sales forecasts for the next quarter, identifying overfilled items, and identifying under profitable service.
Professional accounting software can be the source of all this information. But finding the best accounting software for your company can be a challenge with the explosion of shrink-wrapped software products and application offerings online. To choose business accounting software, you must understand some of the basics of professional accounting, look closely at your business and its accounting needs, and evaluate the products available today. "It's very important to do it right. In many cases, it can make the difference between a business being profitable versus unprofitable."
How to choose a business accounting program
Understanding accounting needs
The first step you need to take to choose an accounting software for your business is to do a good needs analysis that will meet both administrative and financial needs. It should be broad, exploring both the obvious questions and those that make your perception a reality. Take your time with this important step, as the last thing you want is to repeat this process over the next two years. If you experience unexpected growth that forces an upgrade, great, but good planning at this point can help you avoid having to change programs too soon. Get some help before buying anything.
Understanding accounting needs
The first step you need to take to choose an accounting software for your business is to do a good needs analysis that will meet both administrative and financial needs. It should be broad, exploring both the obvious questions and those that make your perception a reality. Take your time with this important step, as the last thing you want is to repeat this process over the next two years. If you experience unexpected growth that forces an upgrade, great, but good planning at this point can help you avoid having to change programs too soon. Get some help before buying anything.
What you need to know about your business
The first step you need to take before deciding on accounting software is to make sure that you are somewhat financially savvy. "One mistake companies make when they buy accounting software is thinking they don't need to know anything at all about financial accounting because the software will take care of it just for you," says Linda Benson, author of Keeping the Books. Essential record keeping and accounting for a successful small business. "They should understand small business accounts."
The first step you need to take before deciding on accounting software is to make sure that you are somewhat financially savvy. "One mistake companies make when they buy accounting software is thinking they don't need to know anything at all about financial accounting because the software will take care of it just for you," says Linda Benson, author of Keeping the Books. Essential record keeping and accounting for a successful small business. "They should understand small business accounts."
There are many ways a small business entrepreneur or executive can master the understanding of the data their business needs to keep (in order to make better business decisions) and the reports they need to generate (for the Internal Revenue Service and state tax authorities). . You can read books. You can take classes. You can do a search on the Internet. "You can't use any accounting software if it's like trash somewhere or rubbish," Benson says. This is the result "if you don't understand what you are posting".
Another consideration is the type of business you are running. Several different sectors have additional specialized units or groups because they need to maintain specialized data. If you're a manufacturer, for example, you may need to understand and handle parts and labor inventory. If you are a retailer, you may also need to understand your inventory through point of sale software. A doctor's office needs specialized software for billing insurance companies, although many may outsource this job to a broker and/or consultants.
Talk to the accountant and the staff
If your business has an accountant--either an outside consultant or an in-house accountant--it would be wise to consult that expert before you enter an accounting program. The accountant may be able to recommend software that works with his software. In fact, Benson says, some accountants may help you set up your accounting software so that it collects the data they need to help you file your taxes, as well. "They know what kind of business you have and what you need," Benson says. Most accountants work using a specific program.
If your business has an accountant--either an outside consultant or an in-house accountant--it would be wise to consult that expert before you enter an accounting program. The accountant may be able to recommend software that works with his software. In fact, Benson says, some accountants may help you set up your accounting software so that it collects the data they need to help you file your taxes, as well. "They know what kind of business you have and what you need," Benson says. Most accountants work using a specific program.
Your IT department is just as important as your accountant. You also need to understand the state of the devices. Professional accounting software packages use large databases, usually consisting of many different spreadsheets working together, so take a good look at your disk space. As accounting data grows, which happens quickly, the more space you need. This is the most important item to review, but it is not the only one. You will need to evaluate the age of the system, as well as backup procedures and storage media.
What should I know before I start shopping?
Know your budget limits
A major consideration is your budget. All ready-made programs are available at very reasonable prices. However, when you start focusing on industry-specific accounting software, also referred to as vertical software, the costs go up and up.
Know your budget limits
A major consideration is your budget. All ready-made programs are available at very reasonable prices. However, when you start focusing on industry-specific accounting software, also referred to as vertical software, the costs go up and up.
Most vertical professional accounting software is sold with a value-added (VAT) feature, so they can show you the software and help you with installation, setup, and training. The software has a higher price tag because it has a smaller market than general accounting software, and annual maintenance fees are required for you to receive updates and upgrades as they are produced.
Communication with other companies and software consultants
Find out what everyone else in your industry uses. Well, maybe not everyone else, but at least a few of your competitors. Business association meetings are a great place to chat about this, and you can also ask your accountant, because he should have at least one other client in your line of business.
Find out what everyone else in your industry uses. Well, maybe not everyone else, but at least a few of your competitors. Business association meetings are a great place to chat about this, and you can also ask your accountant, because he should have at least one other client in your line of business.
There are also advisors and/or services that will help you as you narrow down your options for the best financial accounting software for your business. FindAccountingSoftware.com operates independently of any software vendors, and you
Add New Comment