Which accounting software should I use?

The recent boom in technology in the software industry has led to accounting software packages that make bookkeeping tasks quicker and easier.

With so many options on the market, Zoho, Myob, Xero, Freshbooks, Wave to name a few, we are often asked which accounting software should my business use? Yet the double entry accounting system we still use today has fundamentally been around since the 15th century - underneath the user interface all accounting software basically does the same thing - debit's one account and credit's the other.

The short answer is to use the one you feel most comfortable with. The only thing we do recommend is not to keep your records in excel. Although we have seen some pretty accurate records in excel - there is too much leeway for error. Accounting systems have accounting controls built into them.

However we can't go past the advances in technology in modern accounting systems that make data entry and reconciliations user friendly and can largely automate your processes saving you both time and money. So we have come up with a list of items to consider when choosing accounting software and they are:

Automation
Industry Requirements
Compatibility
Reporting Requirements
Add on's and integrations
Price

Automation

The number one thing to look for in choosing an accounting software package is how much time and money is this going to save me in processing costs. Having accounting software that allows for uploading documents to transactions - and data entry automation is a must. Even if that comes at an extra - the money you save on data entry costs far outweighs the cost.

Industry Requirements

Next to automation - your industry requirements would be the next important factor to consider when choosing accounting software. Industry specific software is designed with your specific business requirements and will help you run your business more efficiently and effectively. It may save you a lot of time and money in producing your reporting requirements.

You may even be able to get an industry specific add on to some of the basic accounting packages out there.

Compatibility

Ask your accountant or bookkeeper what software they use - if you link into their systems you may save a lot of money over the course of the year. You may also be able to get a discounted price if they have a partnership agreement with the software provider. Either way if you use a cloud service you will be able to give them access to your datafile.

Reporting Requirements

Your accounting system should be designed so that you can get the most relevant reporting out of it for your business needs. If you haven't already chosen key performance indicators (KPI's) for your business - this would be a good time to think about what part of your business you are wanting to track to ensure your success and ensure your software can produce those reports.

If you are a service business that may be staff performance, if you are a retail business that may be inventory tracking, if you are in the construction industry that may be job tracking etc etc. Your reporting requirements is the end result of any accounting software you use so should be an important factor to consider in choosing software.

Add on's and integration

Modern software programs have the ability to add on third party modules that may link your systems and integrate with other parts of your business. Ultimately you want software that is going to 'talk to each other', streamlining your operations and making your day to day processes quicker and easier. Check out third party add-on's and integration abilities - you may not need those options now but having the ability to add them on later without migrating your whole accounting system will be a benefit as your business grows.

Price

Finally you should always weigh up the cost v's benefit of any software. Make sure the cost of the software outweigh's any processing costs you would pay a staff member or contractor to do the same job.