Every organization is required to have an accounting software that can help them record all the transactions and financial entries of their business. While it is a prerequisite for medium and large scale businesses, it also helps small businesses streamline their accounting processes in the likeness of their bigger competitors to set up for eventual growth and expansion. Having an accounting software can go a long way by reducing the room for human error through automation in entries and transaction recording.
With a wide choice of multiple accounting softwares available for companies to purchase, it can be a daunting process to make a choice. However, this is a process that cannot be rushed or done at random, since it is an investment of substantial cost. Knowing what to look for in a good accounting software helps an organization make an informed decision. If you’re trying to search for help in choosing an accounting software perfect for your business, here is our take on the hallmark of a great accounting software for businesses.
Discussed below, you will find all the essential information that is to be included in an accounting software that has the capability of handling the business transactions of your organizations with minimal human interference for an extended period of time.
Without any further delays, let’s get right into it!
Top Factors To Keep In Mind While Choosing An Accounting Software For Your Organization
Every efficient accounting software should have the following features in order to be able to serve any kind of business and organization.
- Accounts Receivable and Accounts Payable System: The mark of a good accounting system is one that allows recording transactions both receivable and payable; this means that it reflects entries based on the money owed to you and the money owed by you to vendors. This will help your organization keep a clear record of the transactions at the time of clearing payments and bills by generating invoices and prompting payment requests. A good accounting system also keeps track of pending invoices and facilitates the use of a payment gateway to make and receive payments.
- Accounting on Cash and Accrual Basis: Since there are two methods to conduct business transactions, cash basis and accrual basis, ensure that the accounting software you pick has both. In the case of a small business, the cash accounting method will be a better fit because they record transactions based on cash inflows and outflows. Medium to large businesses that purchase and sell on credit basis while recording accounts receivable and payable follow the accrual method for convenience. Since most businesses begin their operations with cash basis on a small scale while switching to accrual basis as they grow, it would be wise to take expansion into consideration while choosing an accounting software that has both systems.
- Integrated Payment Gateways: Having a secured payment gateway to complete your transactions is a necessary feature that an accounting software must be able to connect to if you have regular transactions. This will help clients pay you through the secured payment gateway without any apprehension of sata theft along with having the choice to pick from multiple payment options. Since there are many payment gateways you can employ for this purpose, ensure that your accounting software can easily integrate to it before purchasing it for automated and easy payments.
- Projects and Tracking Features: If you have an organization that runs projects for its clients, you will need an accounting software that allows project based billing systems. Such billings can be set to either the actual number of hours spent in the project or a fixed amount at the end of the project. For time-based billing, you can look for an accounting software that allows you to track the time spent while working on the project and record any overtime. Timesheets will help the client and you stay on the same page while an invoice is generated based on the same.
- Bank Reconciliation Statement: An accounting software that automatically retrieves your bank statement is a necessary inclusion to your business. Bank reconciliation and audits become an easy task when you can set up the custom criteria for categorizing and matching your imported transactions according to your bank’s rules.
- Tax Compliance: Keeping up with the latest and changing compliances pertaining to taxation and accounting laws governing the organization is one of the biggest factors for an organization while choosing their accounting software. An accounting software which has built in compliance factors, reminders and regularly updates its systems according to the latest compliance rules introduced by the government without any prompts will help a business send all financial statements, reports and file for returns on time without inviting penalties due to default or delays.
- Automation to Save Time: Automation is an essential feature to look for while choosing an accounting software due to the margin of human error in accounting transactions, manipulation or simply the time taken. While organizations without automation in their accounting softwares have to manually enter figures with a chance of meaning wrong entries or missing them entirely, automation reduces the room for any such error by automatically updating the required fields and running alongside the other business applications an organization uses. Automation can also be a boon to businesses when it is capable of accomplishing more in a short time. One can automate recurring payments to vendors, auto charge the credit cards of customers for recurring transactions, send payment prompts and more through automation, including scanning data in invoices and turning it into digital data entries.
- Flexible Integration: Repeating data entries are one of the biggest pain points of accounting and other employees at an organization. By repeating data, we mean the process of entering the same figures on multiple applications individually to be recorded at all places. By integration, your accounting software works in sync with all other applications running on the system, so numbers entered get automatically updated without the need to record them separately. This feature makes working a quicker process with very less lag. Integration is a feature that makes your financial entries through various applications more flexible.
- Reporting Feature: An accounting software that can generate regular reports to gauge the health and progress of your business is an absolutely essential feature. This will help your management make informed decisions regarding various aspects of the business when the figures are presented in an interpretable format. The accounting software you pick for your organization should have an in-built feature to be able to create all types of reports, income statements, balance sheets and cash flow statements on any given date. This will also help you reduce human error or manipulation since all the reports are automatically generated based on the figures entered over a period of time without missing out on important transactions.
Key Usability Features That Make An Accounting Software Ideal For Business
Usability is the second greatest factor which needs to be measured parallelly to choose the best accounting software for your business. Following are the key usability features to test the software for.
- Simple Platform: Accounting transactions and procedures can be complicated since not everyone in your organization has an extensive accounting background. For the same reasons, automation in accounting softwares is necessary so that the user does not have to work too hard and waste precious time over small figures. A good accounting software has a simple interface that an employee from a non-accounting background can grasp and work with efficiently. Having a neat and evenly spaced out interface while facilitating built in operations without clutter will make working easier for the staff in the long run.
- Security: Data security is one of the biggest concerns for organizations and all the parties involved in business. Due to the developments in latest technology and AI, data theft and leaks have become a chronic problem that several organizations are faced with. To protect the privacy of your organization, debtors, creditors and all other parties that you conduct business with, select an accounting software that comes with a built in superior data security system. It could involve two-factor authentication, encryption, secure communication channels and more.
- Mobile Accessibility: A cloud based accounting software will make it easier for your employees to access their work from anywhere, especially during emergencies like a pandemic, where all are being forced to work from home. With encryption and data security measures, the software can ensure that each employee has a designated signature to be able to access data from the cloud to complete their work on the go.
- Access Based on Designation: An accounting software that comes with multi designation accessibility and clearance levels will help maintain confidentiality within the organization, since some information cannot be released among lower level job titles. This will create an internal hierarchy access based on the level of clearance an employee has been issued from the higher authorities. To ensure that there are no unauthorized access to inter-departmental or managerial level transactions by other employees, pick an accounting software that facilitates a role-based segregation of access. For instance, an organizational head can allow employees explicitly as timesheet staff to give them access to timesheets so that they can log time for their tasks, but exclude them from all other areas of your business
Pricing of Accounting Softwares
Since acquiring an accounting software is a big investment on an organizational level, pricing is a factor that matters to businesses depending on their budget. The following points will make it easier for you to choose one based on your cost allocation.
- Multiple Package Options: Choose an accounting software that has several models with flexible packages as per the requirement of your business. While initially you may not want a large scale business’ worth accounting software, you can start with their smaller capacity package and move upwards as per your growth and expansion. This will help you save on unnecessary expenditures and get the value for what you pay. Having a flexible subscription that allows you to switch to a bigger or smaller package at a moment’s notice is one of the most convenient features a good accounting software can have. For instance, packages can be divided based on the scale of the business, a certain level of turnover or the number of systems required to be covered in an organization. Highly sensitive industries have a special grade package where the data security measures are top-notch and uncompromising.
- Free Trial Facility: Most good accounting softwares have a free trial period for you to check your compatibility with their systems and get a feel of how they run through an organization. Feel free to ask the accounting software company for a trial to check whether it checks all your boxes stated at the beginning of this blog so you can check it out hands on. When on a trial period, a few of the major features will be locked so that you have limited access to the basic functions, interface and operations of the accounting software. Ensure that you browse through all the particulars to check whether they have all the prerequisites for your kind of business.
Wrapping Up:
As seen above, there are several deciding factors that you can cross-check with before investing in an accounting software that will serve your business well for a long time. Considering the fluctuations in the economy and businesses, an accounting software that can keep up with expansion, changes in compliances and the varying demands of your business will be a great choice. It also is essential that the software vendor rolls out new versions with free updates included in the package price so your organization gets the benefit of having all the latest changes in the finance and accounting based rules and regulations amended or introduced by the government. Installing an accounting software throughout your business devices for employees at various levels of the hierarchy can be considered a beneficial on-time investment if done right. Deskera has one of the latest solutions to help your organizations keep their accounting efficient, automated and compliant with regular updates and round the clock customer service.
