In this digital age, if you are still using pen and paper to manage the cash flow, you won’t be able to keep your startup afloat for a long time. With nearly 82% of businesses failing because of poor cash flow management, it is time you realize the importance of accurate bookkeeping and invest in good accounting software.
Business accounting software reduces the possibility of human error to a great extent. Moreover, it helps to access critical financial information in a few clicks. It helps you perform regular accounting tasks like recording payments, invoicing customers, tracking expenses, etc.
Besides, it also helps to assess the financial health of your startup by generating reports that help in analyzing its performance from different angles.
However, selecting the perfect accounting software that caters to all your business needs can become a tedious task. Below six steps will ease out this process for you –
1. Make A Wish List Of Features
The first and foremost step in your quest of finding the right accounting software should be to make a list of all the features you desire in your accounting software. You can compare this to buying a car, one person might look for good mileage, while others might go for the look and feel.
Similarly, your list should contain ‘must-have’ features that your business can’t thrive without and some additional features that would pose to be a benefit.
The way your startup does business defines a lot about the type of features you should be looking for in an accounting software. For example, if you hire only contractors, you might not require a payroll system.
However, if you sell products, you might need inventory management, and if you are in international sales, you might require multi-currency transactions.
2. Decide On Your Budget
The cost of an accounting software varies on different factors like the number of users, storage space, mobile access, etc. Some of the top accounting software providers offer cloud-based services, while other desktop-based accounting software such as QuickBooks can be hosted on the cloud.
If you think your startup is growing rapidly, then you should go for a premium package as it will provide all the necessary features and post-sale support. If your startup is in early stages, you can ask for a free trial or a demo version and test it as you go forward.
And if your startup is a mid-level one, you can go for a basic version and adding features to it as you grow.
3. Take Account of ROI
When purchasing anything, you must consider the Return On Investment (ROI) it offers. Try to identify the features that will save you the maximum time. ‘Time is money’ is an old cliché, but it doesn’t mean that it is irrelevant. The time you save on basic bookkeeping is the same as saving money as it can be utilized for other business tasks.
It’s very tempting to choose an inexpensive software solution to save money, but in the long run, it can cost you more than just money. You may purchase cheap software with limited functionality in the beginning, and realize, after some time, that you need additional functionality which is not available.
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At this stage, you will lose both time and money when you try to switch to different accounting software. This change will also be very stressful for your employees as they would need to train again on using a different accounting software.
4. Consider Cloud Storage
Losing the financial data of your startup can be devastating. The financial data helps to project the future growth to investors and make strategic plans that would shape the overall development of the startup.
Using a standalone desktop accounting software poses this risk of data loss. The solution to this problem is using an accounting software solution that uses the cloud for data storage. Now even if all the systems crash (due to reasons like virus or malware attack, natural calamities, etc.) the financial data is still totally secure.
Apart from data security, cloud-based accounting software also provide additional benefits. They can be accessed from anywhere around the globe through laptops, smartphones, and tablets.
Moreover, you and your IT staff don’t need to worry about backups and software updates as they are done on the server end. These type of software help in collaboration among your employees as now they can work simultaneously from any location.
They also help in seamless sharing of data over the Internet, so you don’t need redundant methods like USB drives for file sharing.
5. Look For Ease Of Use
What is the use of accounting software if you need an accounting degree to use it. While your primary focus would be on the pricing and features the software offers, you should also consider the ease of use of those said features. The software must be user-friendly and provide accounting solutions even to people who are not good with numbers.
Reading reviews of top accounting software online about their ease of use and customer satisfaction will help you in your search. Pick an accounting software that has an ample number of tutorials and videos present online for easy learning and training.
Find online communities where you can discuss any problems you encounter while using the software with fellow users. Make sure that the software you select provides support by various means – phone, live chat, email, onsite- the more, the better.
6. Consult Your Accountant
At last, before shelling out actual dollars from your pocket consult your accountant, because he/she is the one that will use the software most often. Every business is unique, and every accounting software caters to different business needs.
With the accountant’s expertise in handling various accounting software and his/ her profound knowledge about your startup, you will be able to select the right accounting software.
Discuss with him the long-term plans for your startup, and how the new accounting software will provide the assistance required to fulfill those plans. His/ her advice will be crucial to select a system that will help in the growth of your business. Depending on the skills, your accountant may also help you set up the accounting software for your startup.
Don’t stress too much if you are not able to find the perfect accounting software. You can always start from the basic package and buy the premium package as your startup grows.
But you should make sure to do proper research because it’s not right to invest time and money in one software only to find yourself switching to another after a few weeks.