VS1 Cloud Blog
Article By: Business News Daily
Accounting software makes it easier for you to track your business's financial health and monitor the money moving in and out of your accounts. It can create invoices, track expenses and generate a variety of reports that help you analyze your business's performance from various angles. Many applications can also help you track your bills and manage your inventory or projects.
Choosing accounting software can be challenging. Each program includes a different set of features, and most offer multiple pricing plans to choose from, which also vary by feature, number of users, or other factors. Here are three items to keep in mind when selecting accounting software for your business:
- Costs. Would you prefer inexpensive, basic accounting software or an application that costs more but includes extra features?
- Usability. How many users need to access the software? Do you prefer a cloud-based system you can access anywhere or desktop software? Do you need it to have a mobile app?
- Features. What do you need the accounting software program to do? Do you need both accounts receivable and accounts payable tools? Which reports do you need it to generate? Do you need it to track inventory? Do you need it to include ancillary services, like time tracking, project management and payroll?
How much does accounting software cost?
Accounting software varies in cost, depending on the number of features included, the number of users supported and other such factors. Most accounting software companies offer cloud-based software as a service rather than software licenses, and charge a monthly subscription fee.
You can usually choose from multiple plans, with paid packages typically ranging from $10 to $40 per month, though high-end programs cost much more. If you're willing to pay for the software annually rather than monthly, discounted rates are often available.
More expensive plans often include advanced features such as expense tracking, sales tracking, recurring invoices, automatic past-due billing, team functionalities, payroll services, advanced reporting capabilities, inventory tracking and purchase ordering. Many accounting software companies offer integrations to augment the software's capabilities or to connect it to another business program, though often at an additional cost.
Several companies offer a free version of their accounting software, though these usually have either basic features or limit the number of users, clients or transactions. Some free accounting software providers make their money from the paid add-on services they offer. These programs are useful if your business is very small or if you want to take the software for a longer test run than the trial period allows.
What usability factors should you look for in accounting software?
To find the best accounting software for your business, carefully consider how and where you want to use it, and if anyone else will use the system. Here are some factors to consider:
Multiuser access. Most accounting software products allow you to invite other users to the system and control the data they can see and the tasks they can access. For instance, you may wish to give your business partner and accountant full access while only allowing your employees to use the system to track their time and invoice customers. Some systems allow you to invite multiple users at no additional cost; others provide accountant access but require you to subscribe to a higher pricing plan or pay extra if you want to add additional users to the system.
Multiple-business support. If you own more than one business, you may want accounting software that supports multiple small businesses under one account at no additional cost. Otherwise, you'll pay extra to set up separate accounts for each entity.
Cloud-based software and mobile access. Most accounting software is cloud-based, so you can access your account anytime, anywhere from any computer with internet access, helping you run your business remotely, whether you're home or on vacation.
Many also offer mobile apps to help you monitor key information and accomplish core tasks while you're on the go. Some offer separate apps for employees that have limited features, such as time tracking and submitting expense receipts.
Mobile app capabilities vary from program to program, so if this is an important feature for you, you'll want to ensure it has the functionality you need. You'll also want to ensure it works on your preferred platform, as some are compatible only with iOS and others can be used with smartwatches (in addition to phones and tablets).
Which accounting software features does your small business need?
Accounting software offers many features and tools that can help you manage your finances. It should cater to your business's needs, making it easy to accomplish routine accounting tasks. It should also help you see the big picture of how your business is performing.
Many business owners we spoke with said that ease of use and time-saving features are the top two things they look for in a program. Here are some of the features accounting software should have to help you save time and better manage your finances:
Basic accounting features. Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), income and expense tracking, financial report generation, and customer management. However, if your business sells more than just a few products, you also want software that tracks your inventory, manages vendors and assists you with purchase ordering. Or, if your business provides services, you want a program that makes it easy to track time and invoice billable hours.
Time-saving automations. Some accounting software can be set up to automatically send recurring invoices and past-due notifications, saving you time with your invoicing and accounts receivable tasks. Others can save you time reconciling your accounts by suggesting transaction matches. If your business provides customers with quotes or estimates, look for a program that converts these documents to invoices in just a few clicks. Or, if you carry inventory, look for a system that reorders products by automatically creating purchase orders when items drop below a set threshold.
Tax preparation. Make your life (and your accountant's life) easier with accounting software that helps you with your taxes with features like automatic tax calculations, multiple tax rates and tax reporting. You should also be able to give your accountant access to relevant data within the system or easily email all necessary data and files to them.
Add-on services. Accounting software add-ons, such as payment processing and payroll services, make it easy to accept invoice payments online and pay employees. Although these services usually cost extra, they're convenient to use, and the costs may be comparable to what you'd pay elsewhere.
Third-party integrations. Accounting software can make it easier to run your business by integrating with the programs and services you already use, automatically sharing data between systems in real time. Popular integrations include POS systems, payment processing, advanced inventory management, e-commerce, ERP, CRM, email marketing and Google apps.
Questions to ask when evaluating accounting software
When you've narrowed your choices to your top two or three options, sign up for the free trials so you can see for yourself whether the accounting software has the features you need, is easy to use and saves you time. Call the software companies to get a feel for their customer service so you can feel confident that you'll receive the support you need should you experience an issue with the program.
Here's a list of questions you can ask when you call to help you select the right accounting software for your business:
- Is your software a good fit for my industry?
- Do you offer customized solutions to fit my business's needs?
- How many employees and clients can your software accommodate?
- How can your software help me comply with GAAP, tax laws and financial regulations?
- How is my data backed up? Can access be restored immediately during an outage?
- What security measures do you have in place to keep both my business's and my customers' data secure?
- What is the total cost? Are there any setup or cloud storage fees?
- What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)