So your company has finally outgrown your accounting software and you need a more robust accounting software package. Choosing the “right” one can be a bit overwhelming, but here are the top 10 things to look for when reviewing your options.
Chart of Accounts
Your chart of accounts is the engine behind your entire accounting system. Make sure your accounting software lets you customize it the way you need. While we are on the topic, please start using account numbers; I can’t tell you how many companies I see not using account numbers. It helps to keep things organized, allows for better financial analysis, and you can reference them in all supporting documents. Make sure your accounting software allows you to customize these numbers.
Depending on your business you may or may not need this. Most of the top accounting packages should have some sort of class system so you can create a financial statement for each of your services and/or products. If you have a business that offers a few types of services/product lines, job costing is an absolute must. Don’t you think it is a little important to know which services/product lines are actually making you the most money? Don’t overlook this one. If you aren’t sure why job costing is important, check this out.
I am sure there are certain reports you would like to see on a monthly/quarterly basis. Make sure the accounting software is able to easily produce these. Now, some reports will always need to be built out in excel but your accounting software should handle the majority.
Some industries have very specific accounting software that will make things much easier, however, this is not the case for most of us. Just be aware of the specialty software packages in case you want to go that route. Make sure you ask the vendor what makes their software package the best for your industry and what type of tools differentiates them from their competitors.
Most likely you will have multiple people who need to access your accounting software, internally and externally. Having the software on the cloud is a huge advantage. The ability to have seamless collaboration between all the parties involved in the accounting function will save you many headaches and hours.
Having to update your software all the time can be a huge pain. Just double check what the update policy is before choosing your software. Also, backups are extremely important, you don’t want to lose all of your accounting records when your computer crashes. If it doesn’t backup automatically to the cloud, make sure you have solid backup procedures in place to protect yourself.
Any new software will have a learning curve. You should take a test drive of the new software before purchasing. You’ll need to see how easy the software is to navigate and how it handles the main functions of your business.
Do you need to run payroll through software? If so, make sure you factor that into your price. If you are going to use, or already use, an outside vendor for payroll, you should be okay on this one.
Most newer accounting packages will integrate with your bank and credit cards, among other things. I want to warn you on this one — many times the integration does not run perfectly and it takes extra time to go back and try to figure out the issues. However, if you can get it to work, it will be a huge efficiency booster to your business.
You need to get paid, right? Make sure you can customize the invoices exactly how you want. Also, many of the newer packages allow you to email your invoices directly from the software. If you typically email your invoices, this will be a big time saver as well.
So that’s it. Nothing too crazy here just a list of things to be aware of when choosing that new accounting software. We have used most of the major accounting packages out there. If you have questions about which one might be best for you, feel free to reach out. I would be happy to help you through the process.