Is Your Accounting Software Giving You What You Need?
Your accounting software is the backbone of your bookkeeping operation. If the program you’re using is too simple, you’re lacking features that can make your life easier and prevent mistakes. If you overbought your software, you’re paying too much and riding an unnecessarily steep learning curve.
Follow this guide to make sure your accounting software is giving you what you need.
Choosing the right software is all about getting the features you need and none you don’t need.
Mid-Range Software
Most small businesses don’t need mid-range software. If you work with thousands of vendors and process hundreds of thousands of orders a year as part of a national or global business with multiple branches, you likely need to upgrade to mid-range software.
This category can’t be purchased in stores and is customized (and priced) by a local distributor according to your specific needs. If you’re like the vast majority of business owners, however, who runs a relatively small business with fewer than 50 employees, there is almost certainly something that can satisfy your needs without breaking the bank or requiring an advanced degree to operate.
Entry Level
If your needs are basic, so should your software be. If you’re a freelancer or a sole proprietor who doesn’t do a lot of invoicing and doesn’t ship, deliver, or store any tangible inventory, you’re in luck. The class of software that’s likely best for you is not only Web-based and doesn’t require a software download, but it’s free.
Programs such as Outright keep track of money coming in and going out with spreadsheet-style lists or easy-to-read graphs and charts. It links to your bank accounts and third-party gateways such as PayPal. You can transfer money in and out and create profit and expenditure reports – all for free without a single KB of space taken up on your machine.
Basic Accounting Software
Most small businesses will fit into this category of software. Basic accounting programs can do everything that free entry-level products can do, but can also handle invoicing, payroll, billing, and expense tracking.
These programs cost between $115 and $200 or can be hosted online generally starting at around $12-$15 per month. Of this class, the most popular by far is Intuit QuickBooks, which boasts the services of more than four million small businesses.
Higher End
This category is for business owners who need more functionality than basic software can offer, but don’t need to upgrade to complicated, expensive, mid-grade software. This class of software can handle everything basic can, but can also bear the burden of human resources and payroll; asset and inventory management; credit, debit and mobile transactions; project management; as well as construction and property management. Among the most popular in this class is Sage.
Basic software can handle common tasks such as invoicing.
The trick to choosing the correct accounting software is buying the right complexity of software. It seems obvious, but there are a million programs with a million different features.
The natural tendency is to get as much as you can afford. That, however, is not the right strategy. You want the features you need and no more. Too much software is not only an unnecessary expenditure, but takes too long to implement and has too steep a learning curve, all of which leads to hours lost to training and guaranteed mistakes. Get as much software as you need, and no more.
Andrew Lisa is a freelance writer living in Los Angeles. He writes about small business management and reviews the best accounting software.
License: Creative Commons image source
