the World of Accounting Software

Introduction to Accounting Software

Accounting software has become an invaluable tool for modern businesses and accountants. Rather than tracking income, expenses, accounts payable and receivable, payroll, and other financial data via spreadsheets or manual methods, accounting software automates and streamlines most accounting tasks.

For entrepreneurs and small business owners, choosing and implementing the right accounting solution can mean the difference between smooth sailing and choppy waters when managing finances. The software provides increased visibility and control over the numbers, freeing up time and resources for higher-value tasks.

When navigating the options available, here is what business owners need to know about picking and using accounting software to suit their needs best.

Key Features and Considerations

Core Capabilities

While offerings differ across providers, most accounting systems share some standard capabilities:

General ledger tracking
Accounts payable/receivable
Multi-currency support
Invoicing and billing
Expense and inventory tracking
Financial reporting
Payroll management
Tax planning and filing

Consider which features are non-negotiable for your operations. A cupcake bakery has more straightforward needs than a multi-national manufacturer. Buy only the tools you require so as not to incur unnecessary expenses.

Ease of Use

Ease of use spans the system’s learning curve and ongoing usability. Unless working with an accountant to maintain the books, small business owners should prioritize intuitive software.

Signs of user-friendly accounting systems:

Clean, modern interface
Logical navigation and workflows
Ability to customize reporting
Easy to configure and update setup
Quality user support resources

While some solutions have traditionally dominated the SMB market, newer options focus extensively on the user experience. Evaluate trial versions to find software that feels simple.

Implementation and Maintenance

Implementation involves setting up the software with crucial information: Chart of Accounts, tax rates and settings, user permissions, integrating with other platforms like POS systems, etc.

Onboarding guides and professional services smooth the transition to new accounting systems. Carefully vet the provider’s resources, knowledge base, and training.

Ongoing maintenance needs include:

Managing user accounts and access
Performing system upgrades and patch updates
Configuring backups and data security protocols
Monitoring space usage and performance

Ideally, providers deliver proactive notices about required maintenance along with prompts to take action.

Cost Considerations

Pricing models for accounting software include:

One-time license fee – Own the license forever
Monthly/Annual subscription – Pay as you go each period
Consumption-based – Pay for only what you use

Pricing is often tiered by business size and extra features. Potential fees to watch out for:

Set up/Onboarding charges
Add-on apps or modules
Payment processing transaction fees
Phone or email support costs
Premium or customized reporting

Run the annualized numbers and factor in discounts for annual commitments. Avoid unexpectedly high fees down the road.

Maximising the Benefits

Accounting software drives significant benefits, but only with proper use. Here is how to maximize the return:

Pick the right solution for now while allowing room to grow. Don’t pay for capabilities you won’t leverage initially. Most accommodate scaling usage over time.
Take advantage of ecosystem integrations. Automate syncing between sales, banking, POS, e-commerce, and other systems to eliminate duplicate entries and create a single source of truth.
Enable and consult reports. Don’t just look at the transactions; leverage rich reporting with visualizations to uncover business insights for better decisions.
Use capabilities beyond accounting. Support payroll, taxes, billing, collections, and more in one unified platform instead of piecing together disjointed systems.
Clean up historical accounting problems. Start fresh and clean in the new system rather than importing years of messy financial history.

Conclusion

Transitioning to accounting software represents a significant leap for small and midsize businesses. Selecting the platform best aligned to current and future needs drives benefits like more muscular financial control, increased efficiency, and higher-quality reporting.

Rather than an afterthought, treating accounting software as a core business system to drive simplification and automation fosters scalable growth for modern companies. The numbers can be manageable with the right technology solution in place.