The days of doing your accounting on paper journal entries and documenting your payroll by hand by following printed tax tables are over. Any money you spend on purchasing accounting software is definitely worth it, because you’ll save yourself time and agony. However, you need to meticulously plan your course of action. You need to fully commit to an accounting system before you start using it. Although it’s possible to change it, it’s easier to first research which ones will satisfy your needs at the moment, and will serve them as your business grows over time.
Here are some tips to consider when deciding which Payroll Accounting or straight accounting software to buy for your business.
Will it be able to perform the necessary tasks?
What will your business accounting need right now? Think about the type of business you operate. For example, do you offer services or goods? Your system needs to keep track of your inventory collection if you sell a product. A CMS, or customer management system, is what you need if you sell a service since it will keep track of the client base you’ve established.
But with either of these business types, you will need you to be able to invoice clients, perform tax reporting for them and yourself. It will also need to perform the basic features like Profit & Loss statements, and monitor your ongoing sales and expenses. Although you want to be able to scale larger & expand moving forward, you don’t want to buy too big of a package. Especially when you are buying features that you may never use. Be aware that your accounting department (sometimes YOU in a small business) doesn’t need all the bells and whistles, when in fact it can be an impractical tool by being so difficult to use.
How can it adapt to a growing business?
Every business owner plans on growing, and if you are not growing, you may likely be shrinking – especially compared to your competition. Your long-range plan should evaluate how your software within your organization will be impacted by that growth. Ask whether the software is scalable, and to what extent. What might be a great software program for a three person construction company will likely be too primitive for a 100 employee business.
If you are able to plan for this growth and find a program that will work with this growth, you will save yourself a lot of unnecessary headaches, problems, and expenses. Thankfully, many accounting software programs have accepted that business grow and the owners do not want to have to purchase another program down the line, so they have formulated their programs with expansion in mind. However, some companies want you to buy a new program when you outgrow the old one, so you need to be careful what product you buy. You will want to find an accounting software system that will suit your need now and allow you to expand as you grow, or give you a discounted price on an upgrade to a larger system later.
These two features of Capability & Expansion are valuable. If you can choose your system with these in mind, you will benefit short-term and long-term. While there are other key factors that are important like “How Compatible is it with your current systems” and “How much does it cost”, we will discuss those in a different article.