Tips for Start-ups on Choosing the Right Accounting Software


Being unaware of the financial status of the business can cost startups dearly, at times leading to failed endeavours. But picking the right software takes time and can feel overwhelming. Here are some tips for start ups for choosing the right accounting software:

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One of the fundamental building blocks of operations in any start-up is multi-purpose accounting software. Here are a few tips to aid your decision-making process as you go in pursuit of efficient accounting software, which ideally should be one of the first pieces of software or outsourced software that you purchase. 

1. Check costs against budget

Running a business is all about and for the money. Developments in a business require financial investments at every stage. There are always several options in the market for whatever service or software you are looking at. You can strike out a good lot of these by simply verifying their cost and determining your budget will help you filter the options, thus making it simpler to choose.

Once you have narrowed down your options, you can compare the choices and calculate the hidden costs that will potentially follow with every choice. Check the costs of upgrades, add-ons, maintenance, and extended support.

2. Understand your business needs in detail

You may want to finalise a comprehensive list of business activities that would need the support of the accounting software. Different business sectors need specialised and customised modules, add-on packages, and extended functionalities.

You will need to be financially literate in order to establish the objectives you need the software to meet. It would be wise to discuss the same with your book keeper, accountant or external consultant before taking the final call.

Expert advice here will help to speed up the process and may provide you with a certain perspective which you may not have had otherwise.

Here are a few features that accounting software services offer to help manage your finances:

i. Basic Bookkeeping

The software manages income and expense tracking, creates invoices, generates financial reports, and organises your financial data.

Retailers can easily track their fast-moving products and re-evaluate strategies for marketing products that show less movement. Business owners can also keep a close watch on important customers and vendors using the data that the software complies for them easily.

ii. Billing and Invoicing

Want to send accurate bills to your customers on time? Most accounting software will create the bills or invoices as well as allowing you to manage cash flow efficiently.

iii. Automation

Look at accounting software that facilitates automatic billing, and features like past-due notifications help you track your income efficiently, saving your time and effort that manual work demands.

iv. Multi-user Access

Accounting software that can be accessed by more than one user allows you to share the load with your accountant or financial expert. You can have access to all the information while someone works on getting the data ready for you.

v. Payroll Processing

Some accounting packages allow you to organise your payroll processing, where the software manages time sheets and processes salaries for employees.

vi. Mobile Access

You might want to be able to access your information on a mobile device, so you can have all the information on your phone while on the go, to stay updated on the company’s finances.

vii. Integration

You may also have the choice of integrating various other applications like PayPal, e-Commerce, CRM, and point of sale software with your accounting software. 

Recommended reading: 5 Recommended Small Business Accounting Software Options

3. Ensure that the software you select comes with backup infrastructure to protect your data

In case of damage to your system due to natural calamities or functional failure, you want to make sure it's backed up regularly. Verify the time within which the backup can be retrieved for sustainable business operations. Check for all the terms laid by the service provider to avoid dealing with unpleasant surprises later on, especially during difficult hours.

4. Ask for recommendations

Finding out what other businesses use will also help in making an informed decision.

5. Choose between online and offline software

Determine whether you are comfortable with putting out your business data on another vendor’s server, or if you would prefer to have software on your server, which only authorised employees can access.

Online or cloud accounting software is often preferred due to the advantages it offers, along with robust data security features. With the availability of the Internet, most software does not require installation. You can usually sign up and begin processing your numbers immediately.

Another benefit of cloud accounting is that updates will be pushed automatically and periodical backup of your data will be taken. Integration of the software with other cloud-based applications can let you synchronise data across different locations.

But it depends on your business. You may prefer the option of using traditional offline software that can be operated without the Internet, should you experience connectivity issues.

Recommended reading: 11 Bookkeeping Basics Every Business Owner Should Know

6. Ask for a demo

Ask for a demonstration of the software to check for the ease of use and the customer support system that it extends. Scrutinise all the functions until you are convinced of the value the software will add to your business. Finally, do verify if it offers continued and on-time customer support that will be available online and offline to help with troubleshooting and other clarifications.

It is advisable to first opt for free trial versions to check if all your accounting needs are met.

For entrepreneurs, time is money! Every tool that aids in efficient time management adds value to business. Efficient accounting software gives you easy and quick access to customer and financial information, which is a must-have for every entrepreneur.

Consider reading reviews, seeking expert advice, and referring from credible sources. While there is no “ultimate” software out there, following some of these tips will help you towards finding the right accounting software that helps your business thrive.

Over to you now. Any other tips for choosing the right accounting software? Tell us in the comments below. 

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