Before You Buy Accounting Software for Your Small Business
Make Sure It Fits Your Current & Future Needs
Accounting software can be a great tool for your small business, allowing you to keep track of all your financial data, and easily produce reports for effective planning. (Read more about the advantages of small business accounting software.)
But because you'll be using your accounting software frequently, it's important to ensure that you pick the accounting software that's right for your business and your needs.
Is It Mobile-Accessible?
The small business accounting software market has embraced cloud computing in a big way. Most of the newer vendors such as FreshBooks and Zoho don't offer desktop versions at all, and traditional vendors such as Intuit (QuickBooks) have migrated their desktop software offerings to the web and are steering their customers towards subscription-based billing. Some vendors still offer desktop or hybrid desktop/cloud versions.
Online versions are ideal for mobile users. Besides supporting the most commonly used web browsers they typically offer iPhone/iPad and Android apps, making them ideal for sending invoices and entering expense information no matter where you are.
Does It Suit Your Accounting Needs?
If you are a sole proprietor/contractor or a very small business owner without employees chances are you can get by with a basic accounting package that handles invoicing, expense tracking, and provides a basic set of reports to keep tabs on your business. Typically these inexpensive offerings are not actually true accounting packages as they do not perform double entry accounting (Accounts receivable, Accounts payable,and General ledger).
Larger businesses that have employees, are incorporated or otherwise have greater accounting needs will need a more robust (and expensive) package that can perform double entry accounting, and has more advanced features such as payroll, inventory management, project management, customer relationship managment (CRM), analytics, and a much wider selection of reports (and options to customize reports).
Fortunately most of the product offerings allow you to start out with a basic package and expand as your needs grow. There are also many 3rd-party add-ons for the more popular accounting packages so you can (for example) add a payroll module if the vendor does not offer such (see QuickBooks add-ons).
Another feature that is very useful is accountant access. FreshBooks, for example, offers a portal for accountants so your accountant can access your FreshBooks reports and journal entries which saves you manually exchanging information.
Does It Have Ease of Use Features?
- Does the software allow you to send cheques, purchase orders, and invoices over the 'Net?
- Does it have the ability to link online to your bank accounts?
- Is it integrated with other software that you often use, such as Microsoft Office?
- Is it able to convert data from other accounting programs or databases?
- What happens if you decide to switch to another software package in future - will you be able to easily extract and migrate your existing data?
In other words, will the accounting software be able to meet all of your needs, now and in the future?
How Steep Is the Learning Curve?
All accounting software claims to be "user-friendly", but you'll still need to invest some time in learning how to use it. This is especially important if you don't have some background knowledge of accounting; is the software geared towards accounting professionals or can anyone get up-to-speed with it fairly quickly?
Take a close look before you buy. Is the user interface intuitive and comfortable? Will you (and your employees) be able to sit down and learn it, or will you need a further investment in training? Most vendors offer a free trial period (typically 30 days).
How Good Is the Customer Service and Support?
In terms of the learning curve, online help makes the program. Does the accounting software have features such as screen tips, a searchable help index, demos, and example accounts to get you started? Are there printable manuals available? And how accessible is the company's support? Check out the online reviews to get the impressions of people who have used the software.
Is It Scalable?
How easy or expensive is it to move from one user to multi-users? Most basic software offerings are single user or single user + accountant access. To add users requires upgrading to more expensive plans. For example, the Zoho Books "Basic Plan" allows for one user + account, the "Standard Plan" allows for two users + accountant, and the "Professional Plan" allows for unlimited users (see Zoho Books plans/pricing).