All small businesses could benefit from extra time and resources. The tedious parts of running a business – keeping track of your business expenses, issuing estimates, invoicing customers, and tracking down payments – all take up valuable hours of the day.
That’s why almost every modern business has turned to accounting software. Not only will it cut down on costly human errors and free up your staff, but it can also provide you with valuable insights about your business. In addition, it allows you to automate tasks like billing customers and chasing down unpaid invoices.
In short, accounting software exists to save you time and help you get paid.
There are so many different platforms out there that it can be challenging to choose the right one for your business. To help, we’ve created a breakdown of the eight critical questions you should ask yourself before settling on a suitable software.
Before you get started, remember that accounting software will not magically do your accounting for you. It’s just a tool to make the process easier. You still need to have a good grasp of your financial situation and the scope of small business accounting before you can use the software to its full potential. So choose software that makes your life easier, not the one packed to the brim with the most features.
8 essential questions to ask yourself when choosing the best small business accounting software
1. What’s my budget?
It’s a good idea to determine your budget before setting out on your decision-making journey. This extra bit of planning will help you narrow down a vast field to a few appropriate candidates.
Most companies provide a variety of pricing tiers to suit businesses of various sizes. For example, some pricing models are based on flat monthly fees, while others are based on the number of users. Smaller enterprises might benefit more from the monthly subscription model. This way, you don’t have to pay extra fees whenever you invite someone onto the platform to help you handle the bookkeeping.
Many basic plans are offered at irresistible price points, but take a close look at the features they include. Will you need to upgrade to the more costly plan with the full range of features at some point, and will you be able to afford it?
Don’t forget to factor in any extra support costs, and make sure that you aren’t paying for a bunch of features that you don’t need. For example, programmable automation capabilities might seem like a great thing to have but are built primarily for larger organizations handling large amounts of data. Does your small business need the most advanced features available, or will it benefit more from simplicity and ease of use?
Many platforms offer a free trial, so it might be wise to take advantage of that opportunity. It will waste a lot of time and effort if you end up having to switch to another platform in the future. Make sure you’re well-informed before you make your final decision.
2. Does this accounting software suit my small business or industry?
Many top digital transformation companies are now incorporating business accounting software into their operations to streamline financial management and improve overall efficiency. Not all accounting software is alike, and while certain platforms have a more general scope, others may be built to suit the needs of a specific industry. So don’t just go for the software with the highest reviews or most extensive user base. Instead, there might be a smaller platform tailor-made for businesses in your field.
For example, think about your industry-specific requirements. Do you offer consulting services that require proposals and contracts to be reviewed by both parties before proceeding? Do you need software that allows you to handle bookings or schedule appointments? Or perhaps you are primarily interested in tracking the time and travel expenses of your employees.
Here are some industry-specific features. If any of these apply to your business, note it down as it might not be included in every platform.
- Inventory management
- Sales tracking
- Time tracking
- Expense tracking
- Travel expenses
- Customer information database
- Budgeting capability
- Estimates and quotations
- Proposals and contracts
- Tax reports
- Financial analysis
- Project management
Look for the software that can handle your main requirements – it will save you the hassle of adopting a generalized platform to suit your particular needs.
3. Do I need a cloud-based or desktop-based accounting software?
Desktop accounting software was the industry standard for many years. It does not rely on internet access, is often purchased in a single payment for use on one computer, and can securely store a business’s financial data offline.
However, cloud-based platforms are becoming the norm for modern accounting systems. There are several benefits to a cloud-based platform. For one, it allows many users to access the same data so that you can bring in an accountant or other employees into the same workflow. Another benefit is the ability to directly sync with bank accounts or any number of helpful app integrations.
Data is regularly backed up via the cloud so that you don’t have to worry about a single computer getting broken or becoming corrupted. The only drawback to cloud-based platforms is that they only work via internet connection. So, if your business operates in an area where that is an issue, you might want to consider a desktop-based solution.
Most cloud-based platforms have well-developed mobile apps as well. Suppose you travel frequently or are a service provider like a handyman who needs to generate quick invoices on the go. In that case, you might want to focus your attention on the mobile app versions to find your best fit.
4. Will it be easy for me to use?
Once you’ve made your choice, you’ll be spending a lot of time interacting with this software. Is it something that you find convenient or even a pleasure to use? Or does it seem complicated and frustrates you every time you open it.
Sometimes this aspect can be overlooked, but it’s not something to be taken lightly. Even if you don’t have an accounting background, a small business operator must have a good grasp of their finances. Many programs offer comprehensive financial reports, but they should be intuitive to generate and understand. The program also needs to be easy enough for your employees to use.
Many platform interfaces are loaded with features that you might not need. Opt for the platform that will save you time by streamlining tasks and showing you only the features most relevant to your core business activities. After all, this is supposed to be a way to increase efficiency, not slow you down.