Gone are the days when your bookkeeper simply crunched numbers while bent over files, paper receipts, and Excel spreadsheets. Accounting software and systems have opened doors to new ways for you to balance your books, keep an eye on your taxes, and generally manage your finances with efficiency.
But too many options can create problems. Namely, the problem of choice.
How do you decide which accounting software is best for you?
From MYOB, Xero, and Quickbooks, to Recieptbook, Saasu, and Reckon, a glut of software is touted as viable or essential. Understanding the functions of each is time-consuming; deciding which is best suited for your business and then implementing a holistic system for all your business dealings can seem beyond the busy small business owner. What can you automate? How much of your data can you entrust to the cloud? Will your staff need to be comprehensively retrained?
This guide simplifies matters. Our team of Virtual CFOs assist clients with modernising their accounting systems on a daily basis. We walk you through the questions you need to answer to find the right accounting software solutions for your business.
Why accounting software?
You may wonder if you can stick to the traditional receipts, Excel and desktop application methods that have served you well in the past. But there are good reasons for the shift to cloud, online, and application-based accounting systems, particularly in Australia:
The Government expects you to use accounting software. For example, measures such as Single Touch Payroll (which is already effective for larger businesses and will be required for all businesses from 1 July 2019) mean every time you pay your employees you need to make a digital record that meets regulatory stipulations.
Old software is quickly becoming redundant. For example, companies such as MYOB are no longer supporting the desktop versions of their applications.
The workforce is changing to be more and more reliant on cloud software. For example, more and more people are choosing to work remotely, while more and more small businesses are relying on remote and overseas labour. This type of work tends to hinge on software; the virtual office is replacing the traditional, physical office.
Software-based automation is becoming the norm, not the exception. For example, the ability to automate processes for recognising transactions and documenting storage is becoming the standard of efficiency, rather than the exception.
Real-time monitoring and reporting relies on software. For example, more and more small businesses, clients, governing bodies, and customers are expecting companies to monitor the business performance in real time and report accordingly.
Communication is primarily software based. For example, there is a trend toward communicating by apps on phones, even at the expense of email. Accounting software streamlines this process and encourages better communication with external accountants, tax accountants, auditors, and outsourced CFOs.
How do I choose the right accounting software?
There are so many good products available. In addition to general accounting software, many small businesses are discovering niche software that is helpful in their particular market and industry.
It’s easy to find information on types of software. However, it can be more complex to decipher which software is important for your particular business right now, and how different software can be integrated into your various business processes.
If you’re thinking about switching to new accounting software or even implementing such software from scratch, these are the questions you’ll need to consider:
What does your current software/system do for you now? Your accounting software (or lack thereof) may have you focusing on traditional functions, such as general ledger, transaction recording, and profit and loss/balance sheet reporting. On the other hand, perhaps you also need it for inventory tracking, planning management, payroll, sales processes, purchase ordering from suppliers, fixed assets management, etc.
What new software will best replace and improve this functionality? The best way to assess the hype surrounding new software is to break down each piece of software into its functions, and match functionality to your current needs.
Is the new software reliable and compliant? Has the software been used in the industry you are in already, and if so how is it rated? Is the software compliant with ATO requirements?
How will you transfer from your current system to the new accounting software? Consider your precious data. Is there a simple import/export process? Can all your data be used and entered into the new system? Can you upload even your oldest, paper-based data?
Who will use the new system in your business? If you implement a new accounting software there is often a restriction on the number of simultaneous users. Obviously you want to give full access to some in your business and limit access to others. Can the system accommodate this?
Will you need new hardware/infrastructure to accommodate the new software? Is the online software application-based or browser-based? Do you need to install the application on devices such as your employees phones or tablets?
How will the new software impact on your internal business? What level of training and support is provided by the accounting software provider? How easily can you train new staff in using the software? Since new software will often adjust your internal processes, it may be an opportunity to improve these functions as you implement the new tech.
How will the new software impact your relationship with external stakeholders? Is your current external accountant, tax accountant or Virtual CFO knowledgeable in the software? Will you need to adjust the way you send financial information to them for the purposes of tax compliance and reporting?
Are there any gaps in the functionality of the new software? Do you need to purchase more software to manage specific business functions that your new software may not cover, such as point of sales, timesheet attendance, rostering, resource management or inventory management? How do you ensure the data from different kinds of software synchronises automatically and correctly?
How far can you push the benefits of the new software? What businesses processes can possibly be completely automated as a result of using the software? For example, you may be able to use the AI/ML capabilities in software such as Receipt Bank to recognise and store invoices automatically.
Technologically innovations cause deep restructuring. Many of us will find it hard to remember what it felt like to do business without a mobile phone. How will the advent of developing accounting software transform your industry, your market, and the way you run your small business?
Developing a strategy based on this guide helps ease you through a transitional phase. It makes sure you prepare early to get the most out of new accounting software and systems.
Our outsourced CFO is available to assist you personally in this. Contact us to discuss your strategy for implementing new software, and for precise advice on which systems may best suit your unique business.
Important Disclaimer: Readers should not act solely on the basis of the material on this
page. Items herein are general comments only and do not constitute or convey advice.
Legislation and proposals of legislation are also subject to constant change. We therefore
recommend that formal advice be sought before acting in any of the areas. This news article
is issued as a guide to the readers. Calibre Business Advisory Pty Ltd and its associated
entities disclaims any losses that may be incurred as a result of the reader undertaking any
action based on this article.