Accounting systems can provide a much more accurate, efficient way to keep track of your finances. With so many online, cloud-based accounting systems available, it takes time to research which system is best for your needs. Here, we look at what you should consider when setting up an accounting system for your business.
Why You Need An Accounting System
Accounting software is a lifesaver for small business owners struggling with growth and keeping on top of their finances. There are several benefits to using accounting software, including:
- You save time so you can focus on your core business functions: DIY accounting tools help simplify your basic accounting tasks, allowing you to manage your day-to-day accounting quickly. Hence, your books are always up to date and ready to review. As a result, you can become more strategic, focusing on managing your business’s core functions.
- Record keeping: Your software keeps track of your transactions, so you maintain comprehensive records detailing your most critical financial information ready for audits, reporting, and taxes.
- Accuracy: Manually entering numbers is highly risky. The more accounting tasks you can automate, the more accurate your books are, and the easier it is to gain insights into your financial health.
- A central hub for your finances: Everything is managed from a central hub, making it easier to manage payroll, pay invoices, keep track of incoming cash from clients, remain compliant with tax regulations, etc.
Top Three Considerations In An Accounting System
Although there are many considerations, you need to establish three priorities when choosing your accounting system:
1. Budget: Set a budget so you can explore which software you can afford. This helps narrow down your choices to make your decision manageable while ensuring the system doesn’t cost more than hiring an occasional bookkeeper.
2. Ease of use: Since your accounting system is meant to simplify life, you want an easy-to-use interface that doesn’t take forever to master.
3. Features: What are the most essential functions you need your system to perform? This includes accounts payable and receivable, GST, payroll, reporting, and analytics, but also things such as having a mobile app you can access anywhere or how many users the system supports.
Once you decide on these three things, you can create a checklist that makes it easier to compare systems.
Is Your Budget Realistic?
When you iron out your top three considerations, make sure your budget is realistic. You have a number in mind but also know what you expect from the system. Do these two things align? Will you have to sacrifice too many features to suit your budget? When you invest in accounting software as a service, you’ll usually find you get more bang for your buck.
They tend to be subscription-based, and you can choose the level of service and features you need. You also avoid paying for a system with features you’ll never use. Just make sure that if you need more than one user, the subscription price doesn’t skyrocket. It’s important to provide access to everyone involved in accounting tasks so the work required is covered. You can also find savings with cloud-based software that is automatically updated and accessed via a central online hub versus desktop versions.
What Features Do You Really Need In An Accounting System?
As a small business, you might not need as much functionality, which can save you money. Some of the more expensive plans include the following:
- Expense reports
- Sales tracking
- Recurring invoices
- Project tracking
- Automated billing and past-due reminders
- Team functions
- Advanced Reporting
- Inventory tracking
- Purchase orders
That’s a lot of features. If you already use some form of enterprise software that handles some of these tasks, looking for a system that offers integration might make more sense. Integration is essential as you need something that runs with your sales platform, CRM, payroll, etc., depending on the nature of your business. You’ll be much further ahead with a system that integrates easily with your tech stack to avoid time-consuming, frustrating compatibility issues.
Do A Test Run
Look into trial versions or a free accounting system for small businesses you can use for a month or two. This is an excellent way to test the waters and determine if the software meets your needs. You can also see how it feels. Is it intuitive, or do you constantly look for answers on their customer support forum? Does it save time, or is it cumbersome? Do you find you are missing features? Will it take too much time to train people on the system?
Don’t Overlook The Importance Of Multi-User Access
You might figure you can save money with a system with limited user access. However, consider the convenience a multi-user system offers. You can limit the information users access with role-based authorization, so should you need some help, you can allow staff to track customer invoices or look up orders. At the same time, your part-time bookkeeper or fractional CFO can have full access.
If you can invite multiple users at no cost, it is a no-brainer. If there is a fee, carefully consider how many users you need to make the most of your system and remain scalable as your business grows. FYI, many systems offer multi-business support if you own more than one business or have a franchise. You can save money using one system with multi-business capabilities and make life a lot easier.
Mobile Access
For the most part, you will end up considering cloud-based systems because online accounting systems for small businesses tend to dominate the market. As a result, you can access them from anywhere as long as you have a laptop or computer. However, not all have a convenient mobile app. This is important because it allows you to manage your finances from anywhere, so should you be away, you can manage core tasks easily from your phone. Make sure you confirm the system is compatible with your mobile device, as some are designed specifically for iOS or Android.
What Is The Best Accounting System For Small Business?
Some of the most popular systems include:
- QuickBooks
- FreshBooks
- Sage 50cloud
- Wave Accounting
You can speak to your accountant or bookkeeper to help you choose the right one for your business.
Call us at Intrepidium today at 778-800-7976 or click here to schedule a consultation and learn more about accounting services and software to help you manage your small business finances.
