Accounting Software : Which one is best for your Small Business?
As a small business, finances undoubtedly play a big part of your day-to-day running. Juggling things such as invoicing, reconciling accounts, paying suppliers, amongst many other things, is no easy task. Now, as a busy business owner, it can be hard to manage all of this yourself. That’s where accounting software comes into play!
Choosing the right accounting software for your small business is crucial. The right choice will see processes such as the above become super simple and time effective. The wrong software? You run the risk of spending hours trying to figure out confusing features or missing something important that could impact on the success of your business.
Here at Arrant Accounting, one of the most common questions we get asked by our clients is “What software is right for my business?” The truth is, no one software out there is perfect, nor is any one software going to suit every single business. When it comes to choosing the right one, it’s important that you consider a number of different factors and choose one based on what your business needs - not just what your bookkeeper/accountant prefer to use! A good bookkeeper or accountant will always be agnostic in their choice of software.
So what do your choices look like? The three biggest players are Xero, QBO and MYOB, however there are also a number of smaller, lesser-known players that you should also consider, such as Reckon, Saasu, Wave and Zoho. Many automatically go with one of the big three as they assume they are the best option, but that is not always the case.
Some of the factors that you may like to consider are:
Scalability - Is your business growing rapidly? You should assess how flexible your chosen software is and whether they will be able to meet your needs as a growing business. It’s much easier to get started with a software that will meet all your future needs, rather than trying to switch over later.
Complexity - Who is going to be using the software? You need to ensure that the option you choose is user friendly and the complexity level matches that of the person using it, so that they are able to understand the features and maintain it accurately.
Features - Does the software contain all the features your business needs? Think about things such as POS, inventory tracking, preparing purchase orders, managing staff, size of staff, multicurrency, time tracking, staff access etc. Not all software provides these features and you don’t want to be caught out later because you’re missing something vital! Additionally, each software option has their own strengths and weaknesses, and some are better equipped to handle certain requirements better than others.
Cloud Functionality - What apps can you connect to the software? Also take into consideration whether you need to be able to work off-site, ie; roving sales people and operating software from a tablet/iPad. Again, not all software provide these features!
Management Reports - As a business, what management reports will you need created? Always check to see if your software allows reports to be customised to suit your business needs.
Hidden Costs - Always calculate how much the software is going to cost you to run (either weekly, monthly or yearly). Be sure to suss out all aspects of it and make sure that this figure accounts for everything you need and that there are no hidden costs lurking somewhere in the fine print (eg. some some software have additional costs for larger payrolls).
Data Storage - How does the software store your important business data? Where do they store it? Do they share this data with any other parties? These are all things you need to investigate when choosing the right software to meet your needs.
It should also be noted that under new legislation from the ATO, all software must provide 2 Factor Authentication (2FA).
At the end of the day, there are plenty of amazing choices for accounting software out there. The most important thing is that you ascertain exactly what your business requirements are from a software and then conduct due diligence to find one that will meet these needs.