Choosing accounting software can be time consuming and confusing if you're not sure what you're looking for. Before making a decision, it's important to assess what features are essential for your business operations versus what's a 'nice to have'. Then you can set about finding a solution that covers everything you really need and a little extra too.
Here are some key features of accounting software you should weigh up when deciding.
What should I look for in accounting software?
1) Core accounting modules
First thing's first, make sure your new accounting software has the essentials covered. Check it has the functionality required for generating invoices and creating purchase orders. It should also have accounts payable, accounts receivable and general ledger features.
Online payment processing capabilities make it even easier for your clients to pay their bills directly via credit card and update your system in real time.
2) Cloud capabilities
Most businesses now want a software solution that they can access remotely, at any time. If you or your colleagues need to use your accounting software away from the main office or out of hours, a cloud-based solution is essential. Cloud technology is also useful if you don't yet have a fully-fledged IT team, as the service provider often takes responsibility for protecting the software from cyber attacks.
While you're looking at cloud software, consider whether it'll be helpful for your solution to come with a mobile app. In either case, make sure to ask how the provider deals with updates, and what kind of downtime rates they experience.
3) Tax integration
A key function of your finance team is ensuring your tax reporting goes without a hitch. Depending on the expertise of your staff and how closely you work with an accountant, you might find a package that's set up to produce essential tax reports extremely helpful.
Some software even files your reports directly, though it's always worth checking over the details with an expert before you send it off.
4) Business intelligence
Your financial data provides plenty of insight into your overall business operations if interrogated properly. Accounting software that comes with both pre-defined reports and the option for you to custom design beyond the usual profit and loss statements is highly valuable. It helps you identify what payments are coming in on time or late, which departments are contributing most revenue or where teams are spending above what you'd expect. Ideally you can access reports that give you top level information, such as overall profits, as well as more detailed information about specific accounts.
It's also important these reports are easy to design and run – drag-and-drop dashboards are particularly user-friendly software features that present you with the key data as you log in so you can't miss it.
5) Multi-user access
Even if it's only you accessing your financial data right now, you should be prepared for your business to grow and for more people to be involved. That means you need a system that accommodates multiple users and a number of different types of permission levels too.
You may not want every person with access to see all the details you store, but you might want team leads to complete purchase order details or invoice information, for example.
While the term automation means many different things now, in finance software, it might mean generating weekly repeat invoices or heavily-used reports. If there's any job you do on a regular basis, it's worth finding a solution that can help you automate it.
There's no excuse for you or your team to be wasting time on easy, repeatable tasks with today's technology.
Just as you consider multi-user access for the future, you should also invest in software that supports your business as it grows and changes. It's not always easy to determine exactly what your business will look like in five or 10 years from now, but refer back to the aims of your strategic plan to try and understand how your company will function going forward.
It might involve having capacity for a much larger number of customers than you have now, being able to send hundreds of invoices via email simultaneously or dealing with projects that need breaking down into billable parts.
8) Payroll processing
Preparing payroll manually is a time-consuming and messy process that can easily go wrong. Finding accounting software that either incorporates payroll or links with your existing system makes life much simpler. You can set up employees with the right tax information and transfer their salary straight to stored bank account details. If your team submit timesheets, with the right system you can automatically work out what they should be paid each period.
With payroll information going through your main accounting system, it's included in your tax time reporting and general business intelligence data.
9) Asset management
Not all your business's worth is in cash form. You'll likely have a number of assets that add value to your business but aren't accounted for within your incomings and outgoings. Asset management functionality helps you keep track of expensive machinery and equipment, keep it maintained as required and check each item is bringing value to your operations.
To help you make the best decision for your business, grab a free demo of all the key accounting software features you need with Advanced Business Manager.