A sole proprietor running a cash-only business with just a few customers and suppliers may get by just fine with a spreadsheet to keep track of income and expenses. However, for more complex business models, the benefits of investing in accounting software cannot be overlooked. By automating your business finances in this way, you can expect to benefit from a greater level of accuracy, better decision-making, and more efficient allocation of resources.
But with hundreds of options in the accounting software market, learning how to choose the right accounting software for your business needs can be an overwhelming process at best. Here are the top 3 areas to keep in mind when making choosing accounting software for small business management.
Small Business Accounting Software Features
The first step is to determine which of the following are applicable to your specific small business needs.
- Invoice customers – The faster you can bill customers the sooner you can get paid. The best accounting software will allow you to create customized invoices and keep track of late-paying customers, giving you real-time visibility when it comes to your accounts receivable.
- Integrate with bank accounts and credit cards – The ability to connect your bank accounts with your accounting software allows you to seamlessly gain access to updated data, track your expenses for tax purposes, and pay your vendors.
- Pay bills – In addition to setting up bill pay in your accounting platform, you can also create recurring payments to vendors and suppliers. The best accounting systems will send you notifications when you make successful payments and automatically update your books thereafter.
- Inventory Management – Most product-based companies need an effective inventory management system that not only offers a centralized view of stock but also a methodology for replenishing materials in the most efficient way possible to meet customer expectations.
- Budgeting – Creating a budget is one thing but actually sticking to it is another. A good accounting platform will not only walk you through the steps to create a budget but also allow you to run Budget vs Actual reports so that you can make informed decisions for your business.
- Payroll – All-in-one accounting platforms will allow you to pay your employees via direct deposit or checks. Speeding up your payroll processing could have a positive impact on employee morale and retention rates.
- Reporting capabilities – The ability to pull up at-a-glance financial snapshots of the most vital aspects of your business will help to transform the decision-making process.
Online Accounting Software
Unlike desktop platforms, online accounting software is cloud-based which means that you can run the application once you have an internet connection. Here are some additional benefits of leveraging the cloud for your small business accounting needs:
- Real-time decision-making – Perhaps the biggest selling point is that cloud accounting software gives you 24/7 access to financial data wherever you are and on whatever device you may be using. Therefore, you no longer have to worry about making business decisions using out-of-date information.
- Cloud security is top notch – Did you know that the cloud is one of the most secure ways to store data? For example, if your desktop or laptop is stolen, the loss of traditional accounting software and data could be detrimental to your business. Likewise, in the event of a natural disaster, there would be no downtime if your data is in the cloud. In addition, there is no need to worry about data backups, software bugs, operating systems crashing or user errors. In the cloud, data backup is done automatically.
- Estimates – If you create bids or quotes for customers prior to the start of a job, the online accounting software should allow you to create an itemized estimates on-the-go. The best programs such as QuickBooks will allow you to easily convert your estimates into invoices once the job is complete.
- Scalability – Unlike traditional accounting software where only one person has access to data, online accounting platforms offer multi-user access making collaboration as seamless as possible. Furthermore, your accounting platform can grow along with your business with little effort.
- Automatically sync data – When you give another application permission to access your files, those programs sync data with your accounting platform. For example, the QuickBooks mobile app “syncs PayPal transactions, links business cards with American Express, imports sales data from Square and more.”
Did you know that there’s an accounting software platform to meet every budget? However, aside from the monthly subscription cost for online accounting software, there are a few other considerations to keep in mind. First, it is important to note that the more specialized the software, the higher the cost. This usually only impacts companies that fit into one of the following categories: manufacturing, construction, and any other project-based operation. You should also consider implementation and training costs as well as examine future needs as your business grows through different seasons.
Final Thoughts: Why Accounting Software Alone May Not Be Enough
Regardless of which accounting software you choose, remember that at the end of the day, it is ultimately a tool. Tools can be very powerful, but only in the hands of the right person. Unless you are an accountant by trade, chances are you will have a tough time doing the books yourself. However, hiring outsourced professionals like the team at Remote Quality Bookkeeping will give you peace of mind.
We have access to state-of-the-art technology and likely have the more robust and efficient versions of the accounting software that you or your in-house bookkeeper currently use.
Furthermore, outsourcing critical back-office tasks such as payroll to a team of experts free up your time to focus on revenue-generating activities such as building better client relationships, exploring new partnerships, and expanding your business.
Choosing an outsourced bookkeeper like Remote Quality Bookkeeping is also a cost-effective option because we allow you to easily customize the scope of work so that it fits your budget. Leveraging our scalability means you get to save the time, cost and hassle of hiring someone in-house. In turn, you can use the additional time and money to gain a competitive edge and effortlessly scale your own business.