There are numerous options; Xero, QuickBooks, Sage, Iris, Kashflow and many more. With so many to choose from, it’s hard to know which is best. However, certain accounting packages are more appropriate to one kind of business over the next. There are questions to ask that will guide you in selecting one you can use and trust, though there is no one-size-fits-all solution. Each accounting programme comes with pros and cons. What matters most, then, is choosing the package that is most suitable to you.
SELECTING ACCOUNTING SOFTWARE BASED ON YOUR NEEDS
First off, you should take the time to better understand your business needs. A small business with a five-figure revenue would have very different accounting requirements to a business working through millions of pounds in sales and expenditure. Equally, certain industries such as construction or charities have their own individual accounting demands. Moreover, some software packages are more tailored to specific niches.
Remember that your skill in keeping your books must be considered. You should ask yourself whether the software is appropriate to your particular skill level and will not restrict you as you grow your business. Do you want to maintain your accounting in-house or outsource it, partly or completely?
PICKING CLOUD ACCOUNTING SOFTWARE
One feature you should look for is whether it is a cloud-based accounting programme. This has become increasingly more relevant, not least because it permits access from anywhere. A cloud-based option means that the software is routinely updated for tax and regulatory changes so will not become outdated. Although there were early concerns about security of data held in the cloud, these have been largely addressed and eliminate the need for you to regularly keep backup copies of your records. Since they are kept on a secure data server, there is less risk of files being corrupted or lost.
Cloud accounting software is often more versatile, too, combining well with other useful business tools, making bank reconciliations, invoicing and purchase orders all integrated and automated.
IS YOUR ACCOUNTING SOFTWARE MTD COMPLIANT?
Remember that your choice of software might be dependent on whether or not it is Making Tax Digital (MTD) compliant. From April 2019 quarterly electronic submission of VAT returns to HMRC is mandatory for all VAT registered businesses. There are some bridging software add-ons available to purchase for Microsoft Excel, or from other software companies, that allow VAT accounts prepared in a spreadsheet to be transferred into an electronic file format acceptable to HMRC. While these are work around fixes for the short term, it may be worth considering investing in an MTD compliant accounting software package. It’s possible that HMRC will ask for all routine tax reporting to be submitted in an electronic form in the near future.
We recommend that you check out the HMRC list of presently compatible MTD for VAT accounting software.
KEEPING YOUR BUDGET IN MIND
Of course, you should keep in mind the costs involved as there are many affordable packages available to choose from. Some packages can become increasingly more expensive as time goes on. Depending on your business demands, you could find that your need to upgrade your licence could become troublesome. The more industry specific and feature-heavy the software is, typically the more you will need to pay to get access.
While most options offer a range of add-ons, some have more than others. Outside of the basics, popular accounting software extras include point of sale transaction recording, managing payments online and integration with your commerce platform. Work out the features critical to you before choosing a programme. If you invest in accounting software that does not provide what you need, it is a wasted opportunity.
If you want a bespoke accountancy software package that is tailored entirely to your industry, it will cost a significant amount. Does your industry have specific compliance rules? Keep that in mind, as this will play a role in determining what you opt for.
OTHER THINGS TO CONSIDER
Another important part of making your decision on choosing the right accounting software is the level of support and training that may be required. How much training is needed for you and your staff on using a product, and what is included in your initial subscription? What help will the supplier provide to get you up and running and are there any hidden costs for this?
A good programme can facilitate interaction with other business software. For example, packages such as Xero work well in combination with other tools such as Microsoft Office. This can make it easier for you to easily transfer data from one programme to the next, saving you time and stress. Both ease of use in relation to other business tools and data security are essential considerations here.
Additionally, there is the question of what functions you will need from your accounting in the future. As a business grows, the demands on any accounting package will increase. Having a clear understanding of both your current financial position and your future goals is a vital part of any businesses’ success. What reporting and analysis features are included and will they be fit for purpose over the next five years?
MAKING A CHOICE ON ACCOUNTING SOFTWARE
Again, this is not an easy choice to make. If you are unsure of where to begin with your search, then contact our team at Devonshire Green. We can help you to pick compatible accountancy software that fits well with the kind of business you run. By evaluating your needs, budget, and feature requirements, we can advise you on making a more informed purchase.
Contact us today if you would like to know more about choosing the right accounting software. There is a lot to consider and making the right decision can save you time and money.