How to choose the best accounting software for your small business?

If you’re planning to start a new business or just recently started and need to set up your admin processes, sooner or later, you need to decide which accounting software you want to use.

But what are the key factors to consider when deciding which accounting software is going to be perfect for your business? How can you find the right one?

Make no mistake: when you start using one of the many options, it’ll be quite challenging to switch to another solution in 6 months. Not impossible but painful. Therefore, choosing the right accounting software that fits your business’ needs is an important business decision.

Based on my experience, there are two key factors to consider when you select your perfect accounting software:
1) Your business activity and needs
2) Your accounting skills and/or your accountant’s preference

1) Your business activity and needs

Your choice will ultimately come down to this very fundamental question: how do you operate your business? If you’re just about to start your business, your business plan is your starting point.
Be honest and take your time to consider all aspects of your business. Assess your needs and draft a list: what do you expect from your accounting software. Put all of them, even the tiniest one to paper. Don’t bother if it sounds dumb or trivial; on with it.

A business in the hospitality sector has different accounting needs than one in the construction industry. If you’re an online retailer selling products through Amazon or E-bay, your best-fit piece of software may differ from your coach friend’s solution.

One more important thing: don’t fall for fancy functionalities … only if that particular feature is on the top of your priority list. I know it from my own experience: I easily fall in love with a software programme or app because of one fancy feature. I recently got really excited about a cash flow forecasting app because it had an automated and customisable reporting option. It was so terribly fancy: I could see myself generating incredible reports with a click of a button. So, I started using the app and realised that I couldn’t adjust the assumptions the way I wanted to. Therefore, the output may be fancy, just worthless for my purposes. 

So, here’s my advice: take your time to list what’s essential for you in terms of your accounting software and test the short-listed options. It may sound time-consuming – yes, it is time-consuming indeed – but it’s definitely worth it in the long run. Test, test and test. Most accounting software has free trial periods, so play around a little bit, try all the highly important functions and test how they run. After a couple of hours of testing, you are ready to decide.

2) Your accounting skills or your accountant’s preference

Let’s be very pragmatic: will you do the books yourself? If so, how familiar are you with the accounting principles? Different solutions may require a certain amount of accounting skills, whereas others are extremely user friendly. Again, be honest when choosing the right platform.

Similarly, do you already have a bookkeeper or an accountant? If so, your best choice is understandably to take their advice and opt for the software package they suggest … or change your accountant 🙂

I firmly believe that based on the two factors above, you will be able to choose the right accounting software for your business.

I bet you’re just about to think: ‘but hang on a minute … what about the price, the functionality, the users, the reports? Are they not factors to consider?’ Well, honestly, they’re secondary elements in your decision. Why?

If you were diligent in assessing your needs, you should have a detailed list of required functions specific to your business. If you pair your expected functionality with the software options’ functionality, you will get your short-list to test – presumably with 2 or 3 providers. And guess what? They’ll have very similar prices; they’ll have similar if not the same characteristics. So, my question in return: would you choose a software that you don’t find comfortable and logical to use just because it’s 10 bucks cheaper? Needless to say, you may make your final decision based on the pricing provided both options provide the same functionality and user experience to you.

My point is, though, never ignore the user test and never prioritise the price over the usability. You need to ensure that accounting software executes all those crucial functions perfectly. Suppose you’re already using an inventory management system that doesn’t seem to integrate flawlessly with one of your short-listed software options. In that case, you need to consider opting for the one that does integrate well.

Takeaways

The decision on which accounting software is right for your business is not easy. It requires research and testing. The main factor in your decision should be a thorough analysis of your business needs. Your choice should be the one that meets your needs in terms of functionality and is easy and logical to use.  

I’d love to hear from you,

Krisztina
Organised BAS

PS:
If there’s any topic you find worth discussing, or you have a question, please don’t hesitate to contact me on any of my channels or drop me a line on the form below. I’ll shortly come back to you with my reply.
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