8 factors to consider when choosing the best accounting software

5 min read
Reasons why your cash flow statement matters

Today, businesses rely on accounting software to keep track of their finances, anticipate sales, and manage inventory, rather than paper ledgers or Excel sheets. The technology offers several benefits, including reducing the risk of human error, providing access to critical data, and offering the ability to automate payroll and tax compliance.

However, choosing the best accounting software for your business can be difficult due to the variety of available options. Fret not – we at Golding have created a list of questions you can ask yourself to assist you to find the right accounting technology for your company:

1. Does the software have all the features you need?

Do you need basic accounting help, or do you need support to manage an eCommerce business? Consider what features you need, such as the ability to handle invoices and payments, produce standard financial reports, or expedite bookkeeping.

Look for accounting software that offers you the support you need, but consider whether you will use all its features. There is no point in paying for something you will not fully leverage.

Your first step should be to assess the extent of the accounting support/interaction you require and use this as a checklist when assessing the various software available.

2. Can you make use of a free version of the software?

Many accounting software companies offer free trials or demos, so take advantage of these to see how the tool in question works before making a decision. This will allow you to try out different features and see how they support your business needs.

3. What are the software’s integration capabilities?

If you already use other tools for your business, finding accounting software that can integrate with them is crucial. This can save time and improve efficiency by allowing you to manage your company’s financial tasks from one central location. For example, if you use a Customer Relationship Management (CRM) tool to manage your sales and marketing, you will want to find accounting software that integrates with it.

4. How easy is the accounting solution to use?

Since you will be using the software regularly, finding one that is easy to use and navigate is crucial. Look for a tool that offers on-demand tutorials, a knowledge base, and customer support. Consider whether the software is intuitive and easy to learn or requires a steep learning curve.

Who within your business will require access to the accounting software and what training will they require?

Understanding your company’s financial data is complex, and accounting software is supposed to make your life easier. Avoid choosing software with overly sophisticated functions and a confusing setup. Find something which allows you to hit the ground sprinting.

5. How are the customer reviews for the tool?

Reviews can be a great source of information about the pros and cons of different software options and help you narrow down your choices. Look for testimonials on the software websites to see what their customers say, besides checking reviews on third-party platforms like Trustpilot and G2. Consider asking for recommendations from industry professionals or colleagues who have previously used the software you shortlisted.

6. How scalable is the accounting software?

If you expect your business to grow, your technology should be able to scale up with you. Look for accounting software that offers different plans or the ability to add additional users or features as needed. This will ensure that you can continue using the solution as your business grows without switching to a new platform.

7. Is the accounting solution secure?

You must prioritize cybersecurity, especially when processing online payments and handling sensitive financial information. To ensure the security of your data, carefully evaluate the cybersecurity measures of any software you are considering using.

Look for information about data security in the features and benefits of the platform, or reach out to the company directly to ask about their security measures.

For example, look for software that offers a minimum of 128-bit SSL encryption to protect all data and automatically backs up this data at all times. Protecting your business and customer information is essential, so research before making a decision.

8. What is your budget for the tool?

Accounting software can range in price, so it is essential to consider your budget when deciding. Remember to factor in additional costs, such as setup fees, maintenance charges, and training expenses.

While it may be tempting to choose the cheapest option, keep in mind you get what you pay for. Cheap software may not offer the same features, customization, or support as expensive options.

Compare the pricing of the selected software solutions, whether a custom quote, tiered pricing plan or standard fees, to see where you will get the most value for money.

Golding suggests two options for accounting software: Xero and Dext.

Xero integrates with 1000+ business apps that can help with tasks such as estimating cash flow, monitoring sales, and streamlining corporate procedures. Xero also simplifies bookkeeping by automating tasks and allowing you to match payments to invoices or bills with just a few clicks.

All updates are automated, so you do not have to worry about manually updating the software. Additionally, Xero has been working with HMRC to sort out the process of switching to digital tax through Making Tax Digital (MTD) for when it eventually goes live.

On the other hand, Dext is a helpful tool for self-employed individuals and small businesses. It allows you to quickly scan and upload receipts, making tracking expenses easier and simplifying your Self Assessment tax return process. Dext also helps you keep track of your business finances and administration by digitizing receipts and bills.

Both Xero and Dext offer a range of features that can help alleviate the burden of accounting tasks, and we at Golding highly recommend either of these options. If you do not have time to research all the available options, consider choosing one of the suggested software to alleviate your accounting pain points.

Over to you

Hiring an accounting professional or bookkeeper may not always be financially feasible, especially for small businesses.

In such a scenario, deploying accounting software can be a cost-effective solution for handling various functions, such as bookkeeping, invoicing, and payroll.

Consider your needs, budget, and the software’s ease of use, integrations, and scalability, and lock in an accounting solution for your business pronto!

And if you need help with either Xero or Dext, you can always count on our experts. We know the two software solutions like the back of our hand. Contact us today.