How Do I Choose Accounting Software?

It’s not an exaggeration to say that the decisions you make about accounting software can make or break your business.

That’s why choosing the right one is so important – but with so many pieces of software out there all vying for your custom, that can be a tricky decision.

So, in this article, we’re going to run down the key things you should be considering if you’re in the market for accounting software.

1. Understand Your Business Needs

Before venturing into the realm of accounting software, it’s beneficial to assess your own business first.

In order to get the best out of whatever accounting software you end up choosing, it has to match with what your company needs it to do.

Obviously, you can’t plan for every eventuality, but there are some things you should be certain about from the get-go:

• What do you want to achieve with accounting software (e.g. increased sales, higher customer satisfaction)?
• Who’s going to be using it day-to-day?
• What information will you need to access?
• Do you have any special requirements (e.g multiple businesses, international trade)?

Knowing this will instantly help you to narrow down the options. That means you can focus your attention on the accounting software that’s right for your business.

2. Consider Some Key Factors

Once you’ve decided on the must-haves and nice-to-haves of your accounting software, you can start looking at the different types on offer.

Cost

Of course, budget will be top of mind – especially if you’re in a finance department. But one thing to remember when choosing accounting software is that ‘cost’ is more than the price you see in a brochure.

While upfront costs are definitely important, there are also other costs that are unique to accounting software. Total cost of ownership (TCO) includes both the direct and indirect costs of software. So, not just the subscription fees, but the support costs, licenses, even the productivity losses when the changeover first happens…

Only with this holistic view of all the costs involved can you decide whether a piece of software is viable for your business.

Ease of use

It doesn’t matter if the software you pick is the best accounting software in the world – if your team can’t easily complete their tasks, it won’t have a long lifespan.

This is why usability is important when choosing accounting software. The more your employees can do with it, the more likely they are to support it for the long haul.

If it can import bookkeeping records, grow alongside your business, or automate everyday tasks, that’s all a significant advantage for ease of use.

Features

This is where the work you did earlier clarifying your business needs will really pay off. With this information, you can cut through the noise and focus on the features your business can’t do without.

Integrations

Running a business doesn’t happen in a vacuum. As many things as accounting software can do, some things are just better suited for other programmes.

Integration opens up the capabilities of your accounting software. This lets it work seamlessly alongside sales platforms, shipping applications and email clients, to name a few.

And if you find yourself wanting to expand your integrations, look out for software providers who have app stores or marketplaces as part of their offering – they’ll allow you to do that in a few clicks.

Security and Compliance

Financial data is some of the most sensitive data that there is. As such, any accounting software you choose to help manage it must have robust security and compliance built in.

This includes automatic adherence to regulations like GDPR, but also some more basic things. It should provide you with an audit trail of transactions and conform to other parts of accounting best practices – like keeping an invoice open unless it’s been paid in full.

Different types of software will also manage backups differently. You should be clear on both storage locations of backups (either in the cloud or on a server), and how long this storage will last. It’s also worth looking into what the software provider has in place to help you if your data is threatened by a cyberattack.

Tools to Aid Decision Making

The reasons for choosing new accounting software are varied, but one that we’ve seen time and time again is a need for greater visibility into data. This is what lets businesses make truly informed decisions – and accounting software has various tools to help you do it.

Some of these may include:

Budgeting and Forecasting Tools: Letting you create and compare budgets against actual performance.

Data Analysis Tools: Either built-in or integrated via a third party, they help businesses analyse data for patterns, so they can see if certain products are selling better, or what sales are related to what jobs, for example.

Inventory Management Tools: If you’re a business dealing in physical products, accounting software can help you track inventory levels and follow stock movements. This means you know where your most important assets are at all times.

Not every business will need all of these tools. But you’ll probably need at least one, so have an idea of your features wishlist before you start looking for software.

Industry specific features

Speaking of tools that certain industries could do with, industry-specific features are something that might elevate one piece of accounting software over the others.

We all know that different businesses can have vastly different priorities. That can feed into the specialised accounting functionality industries may require. For example, non-profits may need the ability to manage partial VAT exemptions. Construction companies, on the other hand, might prefer in-depth project management.

Whatever the requirement, accounting software with industry-specific features is useful for more than just accounting tasks. With the right support, it can become an indispensable part of a Financial Controller’s toolkit, helping them manage all aspects of company finance effectively.

Choosing a new accounting software system isn’t a quick process. There may be many other factors your business needs to consider alongside the ones mentioned here. But taking the time to consider your options in the context of what’s important to your business will serve it best, increasing your chances of picking software that will bring benefits in the long term.

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Sage software is the all-in-one business management solution trusted by over 9,000 businesses in the UK. Contact us today to learn more – call 01332 959 008, or use the enquiry form.