Choosing accounting software
Choosing accounting software for your business can be difficult. Consider these important questions when you’re investigating your options.
Choosing accounting software appropriately may be critical to the success of a business, but there’s no one size fits all solution. As a business owner, you need to consider what your individual business requirements are, both now and in the future.
After years of working in this field, I’ve seen many business owners struggling to work with packages that are wrong for them. They’ve been oversold on features, overwhelmed by unnecessary expenses, or the package they’re using simply doesn’t meet their reporting requirements.
To help you make a good decision, use the questions below as a checklist when you’re choosing accounting software.
- Compliance: Is it compliant with the ATO requirements? Can it process your GST and BAS?
- Usability: Can you rely on the software to produce useful management reports that you can use to run your business? At a minimum you need to be able to create profit and loss statements, balance sheets, trial balances, cash flow statements, and cash flow forecasts. (And you should be able to customise those reports so they provide you with meaningful data, as we discussed in this article).
- Costs: What are the upfront, ongoing and associated costs of the package? Typically there will be the initial purchase cost, plus a cost for installation. Budget on spending an equivalent amount on training to learn and understand the program. There may also be annual upgrade costs. Hidden costs may include ongoing training, IT assistance, backing-up, and computer and server hardware, depending on the size of the system.
- Platform: What platform do you want to use to access your accounting information? Will it be used from a computer in your office? And if so, is it a PC or a MAC? Or would you prefer to keep your data in the cloud (i.e. on the internet)?
- Simultaneous users: How many users will need to access your data at any one time? Bookkeeper, accountant, business owner?
- Accountant preference: What software does your accountant recommend? If you select different software will they be able to accommodate it, or will you be charged additional expenses to cover the cost of adapting to your system?
- Features: What features are you looking for in your accounting software? Do you need a point of sale system (POS)? Do you need to process inventory? Do you have payroll requirements?
- Add-ons: Does the business require other software to integrate with your accounting solution? Consider customer relationship management (CRM), ecommerce and project costing, for example. What are the costs involved with integration, and the ongoing implications of upgrades? Will the add-on solution upgrade when the accounting software upgrades? Will there be costs in reconnecting the software systems?
- Upgrade path: You may be a micro-business now, but if your focus is world domination, it’s worth considering what you’ll require out of your accounting system tomorrow. Will the package you buy today allow you to retain the history while moving to a larger system?
- Supplier stability: None of us can predict the future, but you want the company you purchase from to have longevity. If your software company ceases to exist or support your software, you’ll need to move to another package, with all the hassle and expense that entails. At the time of writing, popular options that appear to be here to stay include MYOB, Reckon, and Xero.
- Support: What support is available to you when you have questions or need advice? Is online support offered at the time of day that you’re most likely to require it? Are there consultants, courses, and trained staff available if you need them in the future?
Knowledge is power. Armed with the answers to these questions, you’ll be well placed to talk to your consultant about an accounting package that’s just what you need.
"Knowledge is power. Armed with the answers to these questions, you’ll be well placed to talk to your consultant about an accounting package that’s just what you need."
Any other questions you wish you’d considered before selecting your current accounting software solution? Please share your thoughts on choosing accounting software.