Part 12 of our blog article series: "Strategies for business success"
(and part 1 of 3 of our mini blog series on "Accounting software - how to choose the right one for you")
What are you currently using to handle your business finances – a manual bookkeeping system, an accounting software package, an accountant or bookkeeper, or (most commonly) a combination of these? An even better question is: how well is your current system serving you and your business growth?
In our current age of technological advancement, the rate of development of high-tech hardware and software is exponential. This applies as much to accounting software, which is becoming increasingly smarter, more intuitive and, best of all, more user-friendly.
But with all the choices currently available, how do you know which software is best for you? If you are considering moving to a new accounting software package, you have come to the right place. Over three articles we will give you the run-down on everything you need to know to help you decide.
Types of software packages
Depending on your business size and requirements, accounting software packages can be categorised as one of three product levels:
Entry level accounting
Ideal for small enterprises and sole traders, these packages provide standard accounting functions such as transaction recording and basic financial reporting. They are usually very cost-effective solutions if moving up from manual bookkeeping.
Small to medium business accounting
In addition to the standard features of an entry-level software program, they can include business operation modules such as CRM (Customer Relationship Management), job tracking and workflow management, and inventory control and stock purchase. They support the use of multiple simultaneous users.
Predominantly for large organisations, they share many of the features of small to medium business packages, however they are more robust and offer advanced functionality and integration.
Advantages of accounting software
There are some compelling advantages to using computer software to manage your business. These include:
Simplified data entry
Entering transactions is quicker and easier than ever before, and some software programs intuitively remember past inputs, meaning entries only need to be done once.
Smart software functionality can help streamline tasks which were previously time-intensive.
At-a-glance reports and analysis
Vital business data is readily accessible in a range of reports and financial statements, to facilitate informed business decisions and planning. Think profit and loss statements, debtors and creditors reports, inventory control and cashflow forecasting.
Tasks which were previously done manually are able to be executed at the click of a mouse or programmed to run at a set time, saving you valuable time to redirect elsewhere within the business.
Software-performed calculations can eliminate the risk of human error, such as superimposed numbers or misplaced decimal points.
Integration with other software and supporting functions
Imported bank statements and e-filing (electronic filing) of GST returns are just two examples of how accounting software can bridge the gap between sending and receiving data to and from other online platforms.
Especially relevant to cloud-based software, the ability to access your data 24/7 means you are no longer shackled to your office desk when working on your business finances. Lifting the restrictions on time, place and platform allow you to get the information you need, even when you are on your tablet in the middle of the night on the other side of the world.
The ability to easily distribute reports and share data with your team, your business partners, and your bookkeeper or accountant, ensures all parties are working with the most up-to-the-minute information available.
The list of advantages is extensive and appealing, however the following are some points to address before you commit to a software package:
Whether you are buying an off-the-shelf software package or from a SaaS (Software as a Service) provider, the initial and/or ongoing costs of the software, add-on modules and support packages will play a pivotal role in your decision.
Set-up and implementation
There will be significant disruption as you migrate to the new system, including data transfer (think customer details, opening balances, chart of accounts, creditor information, employee and payroll data, etc). Depending on your business size, it can be advisable to run your old and new systems concurrently for a few months in order to validate your data output. This may mean additional time pressures on you or your team, or costs, if chargeable services are used to facilitate the transition (such as from the software provider or your accountant).
In order to utilise your new software's full functionality, it is important to arrange for comprehensive product training for all end users. Initially this may mean a reduced level of productivity for your business as everyone becomes acquainted with the system, but ultimately will also ensure you and your team gain the maximum benefit from the available features. Ask your system provider if they include training as part of their set-up service.
Initial and ongoing support
Check the software provider includes a good level of product support and helpdesk access, both in the initial installation stages, and also for the product's long-term use. A software module or package that does not include helpdesk support or product updates is not worth spending money on.
Accounting software and add-on modules (such as payroll) are, by design, largely broad in scope to cater to most businesses and industries, however it is advisable to do your due diligence and research if they will work for your business model. For instance, a software package which includes basic payroll functionality might work for a small business employing ten full-time salaried staff, but would not be suitable for a large business with 200+ staff working day and night-shifts and managing multiple allowances and rates.
Watch out for part 2 of 3 of our blog article mini-series on 'Accounting software - how to choose the right one for you' where we give you tips on establishing your business's accounting requirements, choosing the right package to suit your needs, and how to successfully implement a new system.
Keep on eye on our blog this month as we present a series of articles on
strategies for business success
You won't want to miss these!
Subscribe to our monthly blog titles e-mail