Every small business will eventually need to decide on whether or not they should upgrade their accounting software. This is especially important if the business has not yet started using a computerized accounting system or is still using ad hoc computerized solutions.
Even if their current Excel or Quickbooks accounting system may be adequate for now, it’s almost a necessity to switch out the system for something that is better able to handle a larger volume of transactions in a shorter amount of time.
For this, you need small business accounting software that features good automation features — fortunately something that almost every modern software suite has.
Not-so-fortunately, however, not all available accounting systems for small business are suitable for your business. Every organization is different, and their unique circumstances and practices should dictate their choice of accounting software.
Here are a few guidelines for picking the right small business accounting software for your organization.
1.) Assess future needs
What are your plans for your business five or ten years down the road? Will you be expecting to expand to different lines of business? Will you set up new locations within the country or overseas?
These are all important questions, as you may want your accounting system to do more than just accounting. If that’s the case, you might want to consider a full-fledged ERP or “enterprise resource planning” system so you can automate data outside of your accounting needs.
Even if you just need a system that does straight accounting, you want to make sure that it can connect all your business locations, do necessary time zone and currency conversions, as well as provide real-time reporting.
2.) Consider a modular system
Supposing you just need an accounting system now but would like to do more in the future. In this case, you may want to use a modular software suite such as SAP Business One, or any other software suite that lets you use just the relevant modules or subsystems you need. This way, you can greatly reduce acquisition costs and reduce the amount of employee training and familiarization needed if and when you decide to add more modules.
3.) Choose a system that requires minimal or no modification
Accounting and ERP system implementation can often go over budget because the purchasing organization has requested some modification to match their requirements.
Unfortunately, in many cases, these modifications tend to offer little value and increase the risk of unexpected system errors. The additional development and testing also tend to delay transitions to the new system, which in turn can affect productivity.
When possible, try to test different systems first to find out which ones could be used with no modification, or the least amount of modification possible.
4.) Make sure to consider employee training and common use cases
If you’re already at the point where you’re considering upgrading your accounting system, it’s likely your business is already doing hundreds, if not tens of thousands of transactions a day. Efficiency is the primary reason any organization wants to upgrade their system, and this should also reflect in how easy a system is to use.
An accounting system that has a lot of features can be useless for your organization if your employees find it difficult to use even after a few weeks on the job.
If you decide that you need a system that’s more complex to use than the current one you are using, it’s a must for you and your vendor to allocate enough time for employee training. Without this training, your organization may never reap the full benefits of the system.
With these in mind, you should be able to narrow down the small business accounting software choices to the ones that best suit your business. Make sure to reflect on it carefully, as your system may be with your organization for a very long time.