From free mobile apps to full-fledged accounting programs, you’ve got a wide range of options when it comes to accounting software. Choosing the best one for you will depend on the size of your business, your budget, and specific features that might be useful for your business. Here are some tips to help you choose the best accounting software for your needs.
Consider Your Business’s Size and Future Growth
The first thing you’ll need to decide is the capacity you need from your accounting software. Most accounting software offers different subscription levels, and at each level, you’re paying more for added capabilities. Figure out how many invoices and transactions you’ll need your software to support. Keep scalability in mind as well—you don’t want to outgrow your accounting software just months after purchasing it.
The size of your business will also impact the type of accounting software you need. Sole proprietors and extremely small businesses might be able to get away with free accounting apps, while larger businesses or businesses that expect a fair amount of growth might need to look at accounting programs with a full range of features.
Decide on a Budget
You’ll also have to figure out how much you can afford to spend on accounting software. Keep in mind that purchasing higher-priced, more capable software will likely save you money in the long run by relieving your staff of additional accounting burdens. Still, it would be unfortunate to go over budget because of the software you purchased to help you stay on budget.
As mentioned, most accounting software offers different membership levels. If you’re deciding between 2 tiers, play it safe at first by going with the lower tier and then bump yourself up a tier after you’re certain it will pay off.
Make a List of Features You Want
It’s important to know what you’re looking for going in. Many business owners assume they don’t need to know anything about accounting in order to purchase accounting software because the program is meant to do all of the work for them.
Unfortunately, that’s not the case. You still need to understand how business accounting works in order to select the right software for your company and make the most of it. Here are some features to consider.
Online vs. Offline
You’ll need to decide whether you want online or offline accounting software. Offline accounting software operates fully offline, and all of your financial data lives on your computer’s hard drive. Online accounting software is accessed through the internet, used while online, and all of your financial data lives online, typically in the cloud.
While there are advantages and disadvantages to both, online accounting software is increasingly possible. Cloud storage is a huge benefit because it means you can access your data from anywhere, and you won’t lose it if your computer breaks down. Being online also allows you to do things like link your bank accounts and automatically import your expenses or send invoices that your customers can pay online. The program is also updated automatically, whereas offline software requires you to manually install a new version each time there’s an update.
For most businesses nowadays, online is the way to go. However, if you don’t have access to the internet from your place of business, it might be worth considering offline accounting software.
Being able to send invoices to your clients through your accounting software will improve the speed with which you get paid and the accuracy with which you record your accounts receivable, all while cutting down on the time you spend invoicing customers and tracking down payments. That’s why it’s important to pay special attention to any accounting software’s invoicing capabilities.
Here are some features to look for:
- Personalized invoices
- Unlimited invoices
- Recurring payment schedules
- Credit card and online payments
Plans that offer unlimited invoices are ideal because you won’t have to worry about changing your software in the future when your business grows. Being able to set up a recurring payment schedule is nice as well, as it helps you automate the invoicing process. Look for software that sends payment reminders to customers and shows you a clear picture of the status of your receivables by categorizing your invoices into paid, unpaid, and overdue. Finally, decide on your ideal payment method, and make sure your accounting software supports that option.
You either want to look for accounting software that can help you prepare your taxes or software with financial reports that you can easily hand off to your accountant. In fact, a great way to narrow down your options when it comes to accounting software is to talk to your accountant.
Whether you have an entire accounting department or an accountant you use sporadically on a contract basis, your accountants are the experts, so ask if they can weigh in.