How To Choose The Right Accounting Software For Your Business

Accounting: not everyone’s favourite subject. But, we’ve come a long way from the days when “keeping the books” meant poring over leather-bound ledgers by candlelight.

Today, we can choose from a multitude of powerful, feature-packed business accounting softwares to help automate accounting processes and help us ensure compliance with increasingly complex international tax laws.

Let’s take a look at a few of the most important questions to ask before you select your accounting software.

What Business Problems Will Your Accounting Software Solve?

First things first, let’s keep in mind that choosing accounting software is an important decision. It’s certainly possible to choose one and then switch to another, of course, but getting all of your business data imported into or exported out of accounting software can be a major process. It will likely involve some disruption of your accounting processes and probably involvement from your accountant or accounting partner.

It’s much easier to get the decision right the first time around.

So the first question to ask yourself: Why do you need it?

The first answers that come to mind will likely be broad answers: “So I don’t have to do my accounting by hand.” “Because everyone has business accounting software nowadays.” “My accountant wants to use one.”

Try going just a little deeper when you consider the whys and wherefores of adopting accounting software. This can help you establish your priorities later on.

What pains do you expect accounting software to solve for your business?

Are you consistently spending too much time processing invoices? Does your VAT calculation leave something to be desired? Be as specific as you can when considering the exact problems you want your new or replacement software to ameliorate.

Have You Prioritised Your Needs and Nice-To-Haves?

Be wary of signing on with the first popular software you look at, and be wary of thinking the most feature-heavy software must be the best.

You only need the features your business needs, after all, and software can quickly become cumbersome if it has too many modules you’ll never use.

Now that you have a firm idea why you’re searching for new or replacement accounting software in the first place, use those specific reasons to build out your priority list. What is most important to you about your accounting software?

As you build your list, highlight some items as true needs. The rest should become bonus features. For instance, if you know you need accounting software to help you navigate compliance with different countries’ invoicing rules, that becomes a need.

Here are five factors to keep in mind as you assess your needs and wants:

1. Interface and Ease of Use

This may seem like a secondary concern when compared to getting the right feature set, but remember that your team and your accountant will be using this software constantly. What seems like a minor irritation from clunky navigation on Day 1 may be a complete and total deal-breaker on Day 3,001.

2. Pricing

What you’re willing to bear in terms of cost will vary based on a combination of the other items on your needs and wants list you receive, of course. It’s still a good idea to determine your upper limit monthly and annually to help you weed out software that’s far too rich for your tastes.

It’s also worth noting that many softwares have different pricing structures. Some price per user, others by feature set. Some have annual costs, others monthly, or even a combination. Some softwares charge you extra for the setup process, or additional fees for cloud storage or other add-ons.

Remember to price out your options based on what you’ll be paying now and also later. Not all softwares’ pricing structure scales the same way. You might be looking at a cost-effective now that suddenly becomes far pricier than you’d like later on.

3. Feature Set

Your desired feature set will be highly personal to your business. Think about all of these as you create your list:

• Basic accounting
• Automation
• Tax preparation and compliance
• Number of “seats” or multi-user access
• Payroll processing
• Account volume or number of clients
• Mobile access
• Data backups and security
• Third-party integrations

4. Support

Do your research! How good is the support if you need help with something small like a specific transaction? How is it for larger things, like changing a tax reporting country?

Ask peers and research online to see if reviews raise any red flags about any of your software choices. It’s far better to find out that your perfect software becomes a nightmare to troubleshoot before you sign an annual contract.

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5. Simplicity of Getting Started

Whether you’re starting fresh or need to transfer from an existing software, not all new software relationships go smoothly. Find out in detail about your potential software’s startup process.

Are you responsible for exporting and importing your data? Do they have a team to help? Will your data match up and sync properly? These are all questions to ask and answer before moving ahead with any software.

What’s Your Process for Making Your Decision?

Just like you would if you were choosing any vendor, like a payment provider, you need to set up an end-to-end process for choosing your software pool and making your selection.

Once you start looking, you’ll be inundated at every turn with potential softwares. Your process will help you stay focused as you narrow down to your top choices.

Your process should include:

• One person in charge of moving the selection forward
• One person in charge of making the decision (this could be the same person who moderates the process, but does not have to be)
• A rubric-based scoring method to grade each potential software, with your most important factors weighted
• Room for qualitative observations
• An opportunity for everyone who will be involved with the software to weigh in at some point during the process
• A mechanism for getting to the end – for instance, narrowing down to three choices after scoring, then testing out the final two before making a choice

Our Top 7 Accounting Software Suggestions

Choosing the wrong software can be highly disruptive – picture going through the process, implementing the new software, and then realising you now need to go through it all again. It’s worth taking some time and care during the selection to pick the right accounting software that works for your business.

If you've made it this far and are still unsure about what accounting software is right for your business, here are some of our top accounting software suggestions:

1.) Patriot Software - affordable accounting for all

Patriot Software's platform offers a range of features and tools to help businesses manage their finances, including invoicing, expense tracking, payroll management, and tax filing. Their prices start at just $20 a month, making it an affordable accounting option for small businesses.

2.) Xero - easy-to-use accounting

Xero is a popular choice for small businesses due to its easy-to-use interface, automatic bank feeds, and a wide range of third-party app integrations, including a Xero and Quaderno integration. Xero also offers a mobile app for on-the-go accounting to allow for convenient operations visibility for business owners.

3.) Hurdlr - best for freelancers

This financial tracking and management app designed specifically for freelancers, independent contractors, and small business owners provides financial tracking and insights, including expenses, income, and tax deductions. They also automatically track mileage in real-time!

4.) Freshbooks - best for accountants

Some of the key features of the Freshbooks platform include automated payments, importing and categorizing expenses, project management, double-entry accounting, and even dashboard and reporting features. Not to mention, they also provide a time tracking feature to work on multiple projects at once, which makes it easy for teams to log time and automatically add it to invoices. With Freshbooks all of your billable hours (down to the minute) are accounted for.

5.) Deskera - everything, from accounting to HR

Deskera's platform offers a wide range of integrated tools, from accounting, human resources, project management, to even a CRM. Deskera's all-in-one solution is designed to help SMEs streamline their operations, increase efficiency, and improve the accuracy of their financial reporting.

6.) Kashoo - best for bank reconciliation

Thanks to their easy-to-use interface and comprehensive accounting tools, Kashoo helps small businesses and sole proprietors streamline their financial operations and focus on growing their businesses. They also offer integrations with popular payment gateways and banking platforms, allowing users to easily import transactions and reconcile their accounts.

7.) Holded - all-in-one software

Holded offer a cloud-based, all-in-one business management software designed to help small to medium-sized businesses streamline and automate operations. The platform provides a suite of tools and features including: invoicing, project management, accounting, inventory, time tracking, expense management, and more. They also offer a wide-range of integration options to keep everything in one place.

Choosing accounting software for your business can be an exciting time. It could signal that you’re ready to move to the next level and employ sophisticated software for the first time. At the very least, it can mean getting away from a software solution that isn’t working the way it should be, which will help your team do a better job.