How to Choose the Right Accounting Software for Your Small Business
In this digital age, many small businesses stand to benefit from the wide variety of small business accounting products on the market. The right accounting solution will not only help to reduce human errors in your bookkeeping, but also provide insights into your business finances that you won’t see if you relied on non-digital accounting solutions.
From generating sales forecasts for the next quarter, to reviewing your inventory, business accounting software can provide a wealth of information. But finding the best software for your business can be a challenge. Your choice must be based on the nature of your business and your accounting needs.
Here are some tips to get you started.
Choose software that’s specific to your industry
Some small business accounting programs are designed for specific industries, such as retailers, manufacturing, construction and wholesale distributors. General software might be more affordable, but industry-specific software simplifies the tasks. For example, a program designed for retailers will include a solution for managing inventory and will integrate seamlessly with the point-of-sale (POS) system.
Make a list of your needs
Consider your business structure and needs, and make a list of the tasks you’ll manage in your online accounting software. Some programs cover basic tasks like tracking cash flow, but there are full programs that will do everything from inventory management to estimates. So whether you want a solution that includes tax reporting and budgeting tools, or the ability to sync with your email program, make sure you outline your needs before you start looking.
Begin with a low-cost solution
If your needs are simple, you might be able to utilize a low-cost or free solution. For example, if you have no employees, no inventory, and a handful of customers, a simple solution like Billomat or Wave might be your best option. There are numerous free and low cost solutions that will let you invoice your customers, track payments, and get an overview of your sales.
Consider what’s included in the cost
The cost of accounting software can range from $10 to $200 a month. If you maintain a lot of inventory, and employ several employees, a more complex solution, such as Sage, might be best. Sage and other comparable products will track your inventory, manage cash flow, facilitate multiple pricing structures, and help you plan future purchases. Find out what’s included in the cost of the product before you buy. This includes support, maintenance, setup, and upgrade fees.
Consider your future needs
Your business accounting software must be flexible. What will your business look like in the next few years? If you envision a larger business, then your accounting software must have the capacity to accommodate your added customers, expanding payroll, and increased inventory.
Consider whether the software will be limited to the confines of your hard-drive or cloud-based. A growing number of accounting programs are cloud-based because businesses want solutions where the information is easily accessible to everyone involved.
The right accounting software can make all the difference when it comes to managing your small business finances. Consider all your options and look for solutions that let you try before you buy.
Jack Bishop has dealt with almost every aspect of running a small business. He often writes about his ideas and insights on small business and entrepreneurship blogs.