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November 9, 2012

How To Compare Accounting Software

After running your business for a while, you realize something you overlooked before: keeping track of your money is one of the hardest tasks. You just can’t do it alone. And if hiring a full time accountant isn’t in the cards yet, investing in an accounting package is your next best resort.

You’ve made the decision: you’re going to get an accounting package. Now comes the really hard part. With so many titles out there, how do you choose? Maybe our short guide can help.

Needs

What exactly will you need an accounting software for? List it down. Make the list very specific, detailing every accounting need you have in the business. Do you need specific accounting reports for your own tracking or tax purposes? Include every single one there. Doing this will ensure that you can cross-check any software you consider against your list, so you’ll know exactly whether it will sufficiently cover all your business needs.

We also suggest sorting your list, from the most important to the least important. It’s entirely possible, after all, that all the software you consider won’t be able to satisfy every single one of your requirements. Sorting the list this way ensures you can prioritize features, with those at the top getting more weight in your decision than those at the bottom.

Budget

Accounting packages, especially good ones, aren’t cheap. As such, you’ll need to set aside a specific budget for it. Before you start shopping, decide on an amount you’re willing to spend for the software. That way, you don’t waste time looking at packages that don’t quite fit under your ceiling.

Do note that you may want to spend as much as you can for this. If you have a large-enough budget, you may be able to throw in a couple of custom features into the mix, either hiring someone to program them or buying pre-made add-in packages to fully cross out all the items in your “Needs” list.

Research

The internet is your friend when it comes to finding detailed information on accounting packages. Where to look?

1. Comparison charts. There are plenty of websites that offer comparison charts for accounting packages they recommend. We have an accounting software comparison chart here, as well, so make sure to include that in your research. These charts will usually list the main features of each package, so you can begin ticking off your list for each title.
2. Amazon. We love Amazon for the sole reason that they sell nearly everything and that includes a whole plethora of accounting packages. First, look at the specs and features list of each product page,listing them all down. We recommend creating your own table on Excel: your list of “needs” on one column and individual packages on their own columns. Then, you mark off each cell that corresponds to a feature if the package has it.
3. Product websites. Rarely will there ever be software packages without its own website, so make sure to visit them. Product websites should offer a comprehensive list of features that you can use in your decision-making.

Features, of course, aren’t everything. It’s one thing for a software package to have the features you need; it’s another for those features to be efficient and easy to use. That’s why you also want to look at reviews. Amazon should have plenty of them at the bottom of each product’s sales page. There are also plenty of review websites out there, which you can rely on for the same purpose.

Free Trials

Once you have a list of software titles that cover all your needs and have good ratings from reputable reviews, you can then proceed to check if any of them offer trial versions. Many packages do, so you can use those as a trial run before you make a final decision.

When you trial a software, get a feeling for the navigation and functionality, particularly how you’re going to do the different items in your “needs” list, such as generating payments and interoperability with other software in your business, from its interface. Make sure you involve whoever will be the primary person using the software during the trial, so they can evaluate the software on their end.

A Few Tips

1. Ensure scalability. Businesses grow and we’re sure you’re hoping that yours will do just that. It’s only smart to pick a software that can grow with your business. Remember: if you change software packages as your business grows, you’ll need to migrate all your data to the new system and that’s frequently cause for a lot of headaches.
2. Look into automation. A lot of accounting packages now integrate automation of items like payrolls, employee expenses and other financial activities. Even if you hadn’t considered them as a feature you “need,” you’ll likely want to explore them later as you shop for a package for your business, since they can lend plenty of efficiency to your accounting process.
3. Find out how frequently they update. Tax laws, regulations and financial practices constantly change. As such, you want to find out whether a package gets regular updates on that end. Otherwise, you’ll end up having to do plenty of manual adjustments that can really slow down productivity for your employees.
4. Security is vital. You may not worry about it now, but the bigger your business grows, the more you’ll want to protect your data. Compromised software can lose you money, time and important data, so make a point of exploring a software built-in security protocols, as well as how it plays with third-party products.
5. Easy customization. Can you customize forms, reports, screens and similar aspects of the software easily? Or will it require a programmer on your end to implement even the smallest changes? Every company works differently, so you’ll likely need some custom changes down the line.

Check customer support. Like all software packages, you’ll likely encounter occasional problems with any accounting package you buy. As such, you want a package with a good track record in helping clients with their problems. Consumer watchdog websites are great for finding this kind of information.


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