When starting a small business, what are some important considerations for choosing accounting software?

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There seem to be so many choices – from paper and pencil, through Excel spreadsheets to the whole zoo of accounting software available out there. How does one go about making a reasonable choice that will help with the business and not be detrimental in the long run? Ideally without having to use dozens of different tools so everything can be kept in one place as much as possible.

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Posted by al-fn (Questions: 36, Answers: 44)
Asked on 6 June 2020 11:53 am
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For many small businesses, Microsoft Excel is the default choice for bookkeeping. While easy and convenient, this could entail a lot on manual labour and small errors multiplying. Furthermore, spreadsheets are the most difficult way to comply with the government's MTD (Making Tax Digital) requirements. As your business grows, you are likely to quickly realise the limitations of spreadsheets.

Once you've started using a piece of accounting software, switching can be challenging. Therefore, time and effort should be put into choosing the right one for your company’s needs.

Firstly you should start thinking about what you are currently using. Ask yourself what works and what doesn’t. Which features you like and which you wish you had to make the accounting cycle easier.

Some points you should consider are the following:

  • The size of your company & future plans – is this a small company? How many employees does it have? What plans do you have for the future of the company? If this is a small company with only a few transactions Microsoft Excel could work for the short term. If the company will increase in size you will need an accounting system designed to keep a better control over transactions.
  • Features – consider features that you could utilize for efficiency, such as multi-user access, accessing the software remotely, accepting payments online, and integrating the accounting software with your ecommerce software.
  • Budget – don’t over spend on an accounting software that doesn’t suit your company’s needs but at the same time an accounting software should be a good investment for the company.
  • Reporting – you might need an accounting software which you could use to generate reports such as Profit and Loss, Balance sheet and Cashflow. The right accounting software will be able to save you time doing so.
  • Specialised software – you might want to consider a software system more specialised on your company’s niche. For example a retail company will benefit from a different accounting software than a constructions company. You may also wish to look into hiring a consultancy or IT agency to build bespoke accounting software for your needs. Depending on your requirements, this may be somewhat expensive and is likely to take several months, but if done right can bring about long term savings and benefits to your business and your staff far outweighing your investment.
  • Other – other things you should consider include how user friendly the software is, the availability and quality of customer support (most mainstream software packages have poor customer support) and long term use.

Use this online tool to help you gain clarity on your requirements and the right type of accounting software for your business, regardless of what stage you are currently on: https://choose.al-fn.co.uk/survey/1/

Marked as spam
Posted by al-fn (Questions: 36, Answers: 44)
Answered on 6 June 2020 11:53 am