Factors Considered Before Sourcing An Accounting Software

Hired to facilitate the process of sourcing and selection of computerized accounting software, our team of professionals makes sure that every factor is considered before you select a software. Our review includes what are the features of computerized accounting software, procurement and installation of computerized accounting software, and types of computerized accounting software.

In this guide, we review the Factors Considered Before Sourcing An Accounting Software, what are the features of computerized accounting software, procurement and installation of computerized accounting software, and types of computerized accounting software.

Factors Considered Before Sourcing An Accounting Software

We have used many accounting software products and found them quite helpful in managing our business. However, when we were first starting our business, we didn’t know which features to look for or what were some of the important factors to consider before buying an accounting software. So, we decided to write this article on how you can choose an accounting software that will help your organization run smoothly.

Basic requirements

The basic requirements are the core features of the software. It is important to know these features before buying, because they will help you with your business operations.

Structure of the business

Before you can decide on which accounting software to use, you have to know how your business is structured. This will help determine the types of programs that are suitable for you and how many users are needed. Here’s a list of things to consider:

  • Size of the business: The size of your business will be key when thinking about what kind of platform should be used. Smaller businesses may not need all the features found in larger ones. For example, if a company only has one location and does not require complicated processes, then an online platform would suffice as opposed to something more expensive like QuickBooks Pro or Sage 50c Accounting 2018 Cloud Edition (which comes with fewer bells and whistles than its desktop counterpart).
  • Number of employees: If you have several employees working together across multiple departments then there’s a good chance they’ll need access to their own accounts so they can perform tasks such as updating invoices or tracking expenses incurred during work hours without having someone else double check everything first before approving them manually later on down stream (which could lead towards incorrect data entry errors).

Features and functionality

Once you have a basic understanding of the features and functionality of your accounting software, it’s time to look at what the software can do for you. Can it provide information in different formats? Does it integrate with other systems? Is the user interface easy to navigate and understand? Is there good support available if you need help with an issue or question?

If these questions are important to you, then make sure that your accounting software has these features before signing on the dotted line.

Pricing

  • Price:
  • You want to be sure that the software you’re considering fits your budget.
  • Check for a free trial which will give you an opportunity to try out the software before buying it. A trial version of any accounting software should not have any limitations and should allow you to perform all the same tasks as its paid counterpart does. If you find that some basic features are missing in the trial or that there are certain limitations imposed, then it might be better to find another piece of software instead.

Customer service and support

  • How to contact customer service
  • Response time
  • Quality of support
  • Getting a refund if you are not satisfied

Look through all the important factors before buying an accounting software.

Before purchasing a software, it is essential to look at what the software can do. You should check if the accounting software allows you to keep track of your business finances and expenses in a systematic way. The other important thing is to check whether it has an intuitive user interface that makes it easy for you and your team members to use.

If you have decided on which software meets all your requirements, then start looking at its price tag. A cheap accountancy package may not be able to provide all the features and functionality that are needed by businesses, so choose wisely based on how much money would be needed for purchasing this kind of product or service.

what are the features of computerized accounting software

Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals. The Following are some Generic Considerations before Sourcing an Accounting Software

Generic Considerations before Sourcing an Accounting Software

The following are some of the important points that should be taken into consideration before introducing accounting software in an organization.

Flexibility: This is the most important factor that should be considered before sourcing accounting software. The accounting software should be flexible in terms of data entry, retrieval of data, and generating the design of reports. The software should be able to run on different computers having different operating systems and different configurations. It should provide some flexibility to its users. It should also provide easy switch over between users, operating system, and hardware.

Cost of Installation and Maintenance: The selection of accounting software largely depends upon its cost to the organization. The cost of accounting software includes the cost of installing the related components and hardware, maintenance and alteration costs, cost of training the staff, and cost involved in recovering data in case of software failure. An organization needs to evaluate the benefits of the software against its costs. Based on its evaluation, an organization will introduce the software if the benefits are more than the cost and if it is in the affordable range of the organization.

Size of Organisation: The size of an organization also influences the selection of accounting software. Small-sized organizations, where the volume of business transactions is not so large, usually opt for simple and single user-oriented software. On the other hand, large-scale organizations, where the volume of business transactions is very large choose the latest and sophisticated software for meeting the multi-user requirements.

Training Needs: Another factor that affects the choice of software is the training needs. There is some accounting software that requires comparatively lesser training and is more user-friendly. Also, there is complicated software that requires continuous and thorough training.

Level of Secrecy: The level of expected security is one of the important factors that an organization bears in mind before sourcing accounting software. Software should be competent enough to prevent unauthorized access and manipulation of data. It should have in-built features of security. For example, in tailored software, the user rights may be restricted according to their work or responsibility criteria.

Exchanging Data Facility: The ability of accounting software to transfer data is another important factor to be considered in its selection. The accounting software must provide an easy and safe transfer of data from one system to another during the migration of the database.

Utilities/MIS Reports: Another factor that helps in software selection is the MIS reports and the extent to which they are used in the organization.

Vendor Reputation and Capability: The selection of software is also affected by the competence of the vendor. It depends upon the reputation of the vendor in the market, the user-reviews of the similar software, the extent of post-sales support services from the vendors, etc

procurement and installation of computerized accounting software

There are plenty of accounting software packages that are suitable for small businesses. And, at first glance, all these packages appear to have the same functionality. So, how do you decide which accounting software will be the best for your business? Don’t jump straight in and buy the first accounting software package you see with a name that you recognize. Cast your eyes down this list of factors to consider first. Here are twelve things to think about when you are looking for accounting software for a small business.

1. General Functionality

Begin your search by writing down a list of the core functionality that you will need. Will you want to raise purchase orders, for example? Will you be holding a stock of raw materials, parts, or finished products? All good accounting systems will help you maintain basic accounting records. They can, though, vary a lot in other types of functionality.

2. Industry-Specific Functionality

Some types of businesses have specific requirements. A website developer might need project costing to track the profitability of projects. An eCommerce business might need accounting software that integrates with eCommerce software. So, don’t restrict your search to only the well-known, general accounting packages. It will also be worthwhile searching online for industry-specific packages.

3. Multicurrency Functionality

If you often post transactions in other currencies, you will need multicurrency functionality. This will allow you to post transactions in both the foreign currency and in your home currency. If you hold assets and liabilities in other currencies, you will also need to be able to perform currency revaluations. Foreign currency functionality is often not available in standard small business accounting systems. So, if you do use a lot of different currencies, make sure that the software you buy has multicurrency functionality.

4. Cloud or Desktop?

Cloud-based accounting software is becoming the norm. It offers easy access to your accounting system wherever you are. It also allows you to give other people access to your accounts as well, such as a bookkeeper or your accountant. The drawback of cloud-based software is that you need internet access. So, no internet access, no access to your accounts. That’s worth bearing in mind if your internet connection is unreliable.

5. Bank Compatibility

Most of the best accounting packages will allow integration with your bank. This integration will allow you to download transactions from your bank. Then, you will be able to complete your bank reconciliations. If you automate your bank reconciliations in this way, it will save you a lot of time. To be able to do this, though, your accounting software will need to be compatible with your bank’s software.

6. Scalability

If you expect your business to grow, you will need an accounting system that can grow with it. Business growth will lead to an increase in the volume of transactions. It will also lead to the need for a multi-user accounting system. Higher volumes of transactions may also justify the use of more extra software functionality. So, it is a good idea to check what upgrades you will need to be able to cope with the future expansion of your business. And, you should also check how much those upgrades are going to cost.

7. User Security Options

If you are planning on major growth in your business, you will need to consider user security. You will need to be able to define what each user can see and do on your accounting system. This type of security goes far beyond simple read and write security. When you have several people using the software, you will need to have role-based security as well.

8. Ease of use

Most modern small business accounting packages are easy to use. Some, though, need more accounting and technical know-how than others. Accounting software should make your life easier, not more complicated. So, try out a demo of the software and read customer reviews before you buy an accounting package.

9. Customer Support

Customer support is a key factor when choosing any software for your business. You will need training and hand-holding when you first begin to use a new accounting system. You will need ongoing support as well. Check what type of support and training is available and check when support is available. Monday to Friday support will be no use to you if you usually update your accounts at the weekend.

10. Reporting

Check what standard reports are available with the system. Most accounting software will have a report writer. Even so, writing reports from scratch takes time. A package that includes a comprehensive suite of standard reports will save you a lot of time. You can write your own custom reports when you are more familiar with the system.

11. What Your Accountant Recommends

Ask your accountant if they recommend any accounting software. If your accountant is familiar with the software you are using, they may be able to help you configure it and use it. Familiarity will also make it easier for your accountant to find the information they need from your accounts. So, it should reduce your accountant’s fees.

12. Price

Online, cloud-based accounting software is not very expensive. It is usually available for a modest monthly license fee. The price that you pay will depend on factors such as functionality and the number of users. Some packages are also priced based on the volume of transactions. Think about what you will need in the future as well as what you need now. You can change your accounting package if you grow out of it. But it is usually much easier and cheaper to upgrade a system than it would be to replace it.

types of computerized accounting software

We found QuickBooks Online to be the best overall accounting software for small businesses. It provides four plan options for small businesses, as well as a separate option for self-employed users. Each offers features that are suitable for a range of small businesses, from startups to established companies. Between the four options for small businesses, you’ll have access to all the tools and reports you’ll need for accounting purposes, and you can seamlessly upgrade your plans as your business scales. (Note that self-employed users cannot upgrade to the small business tiers.)

The platform is also easy to set up and use, allowing you to do everything by yourself to get your accounting software up and running. However, if you want extra assistance, Intuit offers access to professional bookkeepers who can help you configure the software in a way that makes sense for your business. Additionally, QuickBooks Online allows you to create custom invoices and forms so your company’s branding is always at the forefront of client-facing communications. For the features and services you get, the price is a bargain.

Oracle NetSuite Accounting Software: Best for Advanced Features

We chose Oracle NetSuite as the best accounting software option for midsize and growing businesses that are seeking advanced features. As part of its robust enterprise resource planning (ERP) offering, Oracle NetSuite offers an intuitive cloud-based financial management solution that can track your financial data and automate a variety of essential accounting functions. Like any highly rated accounting software, it offers reporting, planning and billing capabilities. It also easily integrates with other software, including Oracle’s comprehensive suite of business solutions. It can also be used with multiple currencies, so it’s a great option for companies with a global customer base.

If your business needs to expedite its accounts receivable and payable, accelerate deal closings, and keep up with more complex financial compliance obligations while taking advantage of a full suite of powerful business management features, Oracle NetSuite is ideal. Moreover, it doesn’t limit the number of users or rely on third-party apps for customization. However, it may be cost-prohibitive and present a steep learning curve for small businesses that don’t need access to the advanced slate of features it provides.

FreshBooks Accounting Software: Best for Invoicing

We recommend FreshBooks as the best software for invoicing. Not only can you develop professionally looking invoices that match your brand, but the software also allows you to track the status of invoices so you know when customers received their bills and when their balances are due. It also facilitates online invoice payments so customers can pay you directly from the invoice.

The FreshBooks dashboard is simple to navigate and includes time and expense tracking, project management features, and tools to create proposals that you can send to prospective clients. The double-entry accounting system makes sure you are organized and prepared for tax time. If you want accountants to have access to your dashboard, reports, invoices and expenses, you can assign them permission, as well as grant other users access to different features. If you have employees, you can give them access to their projects and track their time and additional expenses. FreshBooks has over 100 partners, so you can add plenty of features and connect with other business programs.

Melio: Best Accounts Payable Tools

We recommend Melio for small businesses seeking user-friendly accounts payable tools that do not need a lot of bells and whistles. It’s an excellent option for cloud-based software that will send invoices and receive payments, as well as manage bills. Melio also integrates with QuickBooks for free. There’s no charge to make payments through a bank transfer, but there is a 2.9% fee to pay by credit or debit card. Two paper checks per month are free; after that, they are $1.50 each.

Melio is very easy to use, offering one of our favorite user experiences. Adding vendors is quick and intuitive. Melio lets you enter a vendor’s information manually, upload a file with that date or snap a photo of an invoice. You can invite both internal users and accountants to use the software and then assign roles and permissions so you know who is accessing your information and what they are doing with it. You can set approval controls for transactions, thus preventing you from overextending yourself or having a cash flow issue because you paid a bill early.

Zoho Books Accounting Software: Best for Microbusinesses

We selected Zoho Books as the best accounting software for people with microbusinesses. Not all accounting software programs are appropriate for freelancers, independent contractors, sole proprietors, consultants, home-based businesses, individuals operating e-commerce sites and companies that employ fewer than 10 people. The software may be too complicated, unnecessarily powerful and overly expensive. Not so with Zoho Books. It works well for businesses with straightforward invoicing and accounting needs, and the low price is attractive for budget-conscious entrepreneurs.

Zoho Books is also scalable. As your small enterprise expands into a larger business, you can make use of the options that allow you to upgrade and integrate with other business applications. It also includes a mobile app to ensure that you can keep up with accounting tasks while you’re on the go.

Xero: Best for Payments

We chose Xero as the best accounting software for making and tracking payments. Xero enables you to maintain excellent relationships with your suppliers and creditors while avoiding costly late fees. With Xero, you can be sure that your cash flow is positive so you don’t come up short when it comes time to pay. On the user-friendly dashboard, you can see when each bill is due, view current and projected expenses, and manage purchase orders. The spare interface gives an immediate picture of your business’s financial position. You can view costs as they happen in real time, then make instant modifications.

Since Xero is cloud-based, you don’t need to download or install any programs. It offers professional double-entry bookkeeping functionality, so your transactions will be entered as a debit as well as a credit. This software also saves you time because you can schedule upcoming payments and batch pay suppliers in advance, automating a process that is typically manual.

ZarMoney: Best for Transparent Pricing

We chose ZarMoney as the best accounting software program for businesses seeking transparent pricing. Organized by “entrepreneur,” “small business” and “enterprise,” the plans reflect each company’s needs. The cost is based on the number of users, from one to more than 30. If you add or remove users, ZarMoney will automatically update your account and charge you accordingly. Each additional user costs $10 per month.

In addition to the transparent pricing, ZarMoney’s powerful cloud-based software makes sure you have everything necessary to organize your businesses financials. You can create and send invoices, manage your company’s cash flow, track business expenses, run financial reports, and stay on top of inventory. It’s easy to use and is adaptable for small and larger businesses. It integrates with thousands of apps, including Shopify, Stripe, PayPal, Zapier, Gusto, Authorize.Net, Mailchimp, AutoEntry and WePay. The software also offers a 30-day free trial so you can test it out before you buy.

Plooto: Best for Automation

Plooto is our software choice for automating key accounting processes. With it, you can manage your payments in one central location, providing you with a clear picture of your finances. Payments, approvals, reconciliation and reporting are unified under one dashboard. The software includes smart approval workflows and secure electronic payments, which reduce errors and speed up the accounts payable process. Most notably, Plooto offers business accounts payable and accounts receivable automation, which helps you collect on past-due bills.

You can use the same system to pay all vendors, even those located outside the U.S., as well as add payees in seconds, either by searching Plooto’s network of 120,000 suppliers and vendors or by adding them manually. Once a customer pays, the payment is automatically reconciled. You can pay electronically or via check with the integrations, as well as make batch payments, search records and set payment approvals.

Wave Financial: Best Free Accounting Software

If you’re looking for an effective, free accounting software, check out Wave Financial. It offers many important, high-quality accounting features at no cost to you. There are no monthly or annual fees, nor do you have to license software. Through the cloud-based accounting program, you can create and schedule recurring invoices and payments, as well as set up automatic payment reminders and automatic syncing with your bank, credit card and PayPal accounts. It also gives you the ability to run financial reports, and it provides you with unlimited accountant connections and transactions. If you want to integrate popular business apps, you can do so at no extra charge.

The only fees you’ll experience with Wave will come from selecting optional add-ons – for example, payroll features – or accepting invoice payments. Wave charges a flat rate of 2.9% plus $0.60 per credit card transaction. Bank payments are 1% per transaction, with a $1 minimum fee. The company also has additional payroll and bookkeeping services that business owners can access for a fee.

Sage: Best for Freelancers and Self-Employed

It is essential for self-employed entrepreneurs and freelancers to quickly and easily send invoices and track payments. For this reason, Sage Business Cloud Accounting is our top choice for these types of small businesses. With Sage, you will have an affordable way to keep the cash flowing into your business without unnecessary delays. This accounting software offers well-priced tiered plans with which to create and send invoices and track payments. With its many integrations and apps, such as AutoEntry, Draycir, Avalara and Credit Hound, Sage can adapt to your growing and changing business.

The program is fast and easy to set up, and the system is simple to navigate. Sage’s software automates a lot of the accounting processes that are typically manual, such as posting expenses and payments and sending invoices and reminders about past-due bills. The software also automatically reconciles bank entries, saving you time and energy. If you need extra assistance, Sage’s customer service is very accessible, which is good news for freelancers and self-employed people who don’t have accounting expertise. If you have questions or need help, you can access customer support 24/7 by chat and live Q&A sessions. Sage also offers one-on-one help through online sessions with Sage accounting experts.

Neat: Best for Receipt and Expense Tracking

As a small business owner, all you may want your accounting software to do is help you manage your receipts and expenses. If so, Neat may be your best bet. This cloud-based tool enables you to upload all of your business receipts with the mobile app and starts at $200 per year, which equates to $16.66 per month. Once done, you can categorize each, keeping you well organized and on top of your costs.

With Neat, you’ll have a good understanding of your cash flow and the ability to access interactive charts and run accounting reports that will analyze the financial health of your business. All this can reduce errors often associated with handwritten recording. It also takes the stress out of making sure that you get the right deductions come tax time.

Accounting Software Costs

Accounting software helps business owners streamline billing and accounting, and it doesn’t have to cost a lot of money. Most programs offer several plans to accommodate your needs and budget.

There are typically two types of pricing models for accounting software: perpetual licensing or a recurring subscription. With a perpetual licensing model, you make a one-time payment for unlimited access to the software. With a subscription pricing model, you pay a monthly or annual fee for access to the software.

For subscription pricing, expect to pay anywhere from $4.99 per month for a basic starter plan to as much as $60 per month for a more advanced service plan. Other factors, like the included features and number of users, will affect the monthly cost as well.

Regardless of the pricing model you select, watch out for hidden fees, which can include charges for customization options, installation or setup services, integrations, and maintenance or support services.

If your business is on a really tight budget, you might want to consider free accounting software. Wave, for instance, offers many of the accounting and invoicing features you would find in paid programs.

When you’re choosing accounting and billing software for your business, we strongly encourage you to take advantage of any free trials to test out the solutions and see which one offers the features and tools you need. Plus, spending time with the software beforehand will help you feel more confident in your decision.

Accounting Software Features

There are many aspects of accounting software that help make it a useful tool. As a small business owner, it’s important to know which features to look for. Most online accounting software offers accounts receivable, accounts payable, banking and reporting features. Some programs include inventory management, project management, time tracking and payroll tools.

Here are some of the core features to look for in accounting software:

Bank Feed

This feature connects the software to your business bank and credit card accounts to receive a daily update of your transactions. This saves you time, as you will not have to upload transactions manually. It also gives you a daily, rather than monthly, overview of your accounts. A real-time bank-feed feature can assist with reconciliation, allowing you to make it a small daily task rather than a monthly ordeal.

Dashboard

When you log in to your account, you’ll be greeted by a dashboard that shows you an overview of your account activity and key metrics, such as cash flow, profit and loss, account balances, expenses, accounts payable and receivable, and sales. Some accounting programs allow you to customize what you see first by rearranging the information.

Online Invoicing

If your business sends invoices, the ability to email them and accept online payments helps you get paid faster. Some accounting programs integrate with third-party payment processors; others require you to use their in-house processing services. It’s a plus for accounting software to serve as an invoice generator also.

Recurring Invoices

With this feature, you can schedule the system to automatically generate and send invoices for recurring charges, such as subscriptions. You can choose how frequently invoices are sent – daily, weekly, monthly or annually – and indicate whether there’s an end date to the billing.

Automatic Payment Reminders

This feature helps you remind customers about upcoming and past-due payments. Some have sample email text that you can use as is or customize. You can then choose when you want the reminders to be sent. Some programs give you the option to send thank-you emails to customers after you receive their payments.

Bank Reconciliation

Smart reconciliation tools identify potential matches between your bank transactions and the bills and invoices you’ve entered into the accounting software, saving you the hours it would otherwise take to sift through your bank account for this information. You can then approve or deny the suggested matches. The best applications suggest potential matches as you reconcile your accounts, and a few include a reconciliation tool in their mobile apps.

Financial Reporting

Every accounting program can generate financial reports. But some are more basic than others, and some require you to subscribe to a pricier plan for advanced reporting. If you need specific types of financial reports, you’ll want to make sure they’re included in the software application and plan you choose. Detailed reports can help you interpret your financial data to make informed business decisions.

Mobile Apps

Not all accounting and invoicing programs have mobile apps, but the best ones do. There is, however, quite a range in the capabilities of mobile apps. Some can only capture receipts for expense tracking, some allow you to create and send invoices, and others have almost every feature the web-based software does. It’s worth checking if the software you’re considering offers a mobile app and, if so, what features are included in the app that will help you manage your business while you’re away from the office.

Integrations

The ability to connect your accounting software to other business programs you use saves you valuable time because you don’t have to manually transfer data from one system to another. Payroll, payment processing, point-of-sale (POS) systems and customer relationship management (CRM) software are just a few of the popular types of integrations that are available with accounting software. Integration with systems you already use also cuts down on training time for employees who will use the software.

Tracking for Billable Hours

If you’re a consultant or your business bills clients by the hour, you need software that allows you to track and bill your time or that integrates with the time-tracking program you already use. This is an important feature for freelancers.

Inventory Management

If you have a retail, e-commerce or distribution business, you need an application that helps with inventory tracking and purchase orders. You may need to subscribe to a top-tier plan to get this feature. If you need more advanced inventory features, look for software that integrates with a dedicated inventory management system.

Project-Based Billing

Firms, freelancers and consultants who work with clients on projects or jobs should look for accounting software that helps them track their projects’ tasks and budgets. The software should allow you to invoice customers for tracked time and bill them for project expenses.

Support for Multiple Businesses

Several programs we evaluated let you add more than one business to your account, though some companies charge extra for this convenience. Also, the types of accounting tools that are important to you will depend on the specific needs of your business. For example, if you run a small freelance business, project-based billing might be the most important feature on your list. Or, if you plan to do some work on your mobile device, a full-featured mobile app might be at the top of your list.

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