Maybe you’re a startup and do your accounting manually on a spreadsheet. Or maybe you have an existing system but can’t use it to manage your orders and inventory or it can’t keep up with the needs of your growing business.
Maybe you were using a simple accounting system and now need a more specialized trading system for your industry.
All of these reasons explain why you may need to buy, replace or upgrade your accounting system, and that’s why the accounting software market is expected to reach nearly $20 billion by 2026.
If you are in this situation, here are some things to consider.
Back then, you installed your accounting application on your desktop computer or server. But this model does not work as well as the cloud.
Why? Because when you buy a cloud-based accounting app — or use a managed services company to host your app — anyone with permissions can access that data from anywhere and usually from anywhere. any device.
Although not guaranteed, cloud-based or hosted accounting applications are generally more secure because they are protected by a service provider whose company invests more in protection.
Cloud applications can also be more easily integrated with each other, giving you more options when you want your accounting system to import data from other databases. They are also more easily supported and upgraded by their vendors.
“Cloud-based systems make remote access easier,” said Carmen Adames, who runs an accounting and bookkeeping service in North Wales. “People can access it from anywhere, even from their phone. They can easily access the app to do things like pay bills or send invoices. »
Martin McCarthy, the managing partner of accounting firm McCarthy & Co PC at Blue Bell, agreed. “A cloud-based system streamlines things so people in the field can get reports and work out of the office,” he said. “And if something happens locally, like a power outage, it allows you to continue operating your business.”
People get so caught up in the features of an accounting product that they forget what’s most important: the company behind the product.
In 2022, accounting software applications are quite mature and most are cloud-based. They are constantly updated to stay competitive. So, while functionality is important, it is not as important as the long-term viability of the company providing the software.
Dig into their finances. Get references. Take a day and attend their user conference so you can meet other customers and technicians from the company. Evaluate their partners and the products they offer. Find out about their future goals and plans. Determine if the product will grow with you.
Selecting an accounting app is a pain in the neck. Your goal is to try to minimize the chances of you having to do this again. Make sure the business will grow with you.
Eventually you should see the software in action. So do it multiple times and involve everyone in your business who will be affected by the system.
Send sample data to the vendor and ask them to incorporate the data into their demonstrations. Insist on evaluating the outputs (invoices, orders, reports) of the system beforehand. Ask the demonstrator to walk through all the key processes in your business, from order taking to payment.
Make sure you have access to a fully functional system so you and your team can practice on their own. Don’t settle for one answer. Make sure the demonstrator shows you. And don’t worry about when a new system goes live.
“There’s never a right time,” McCarthy said. “So do the project when your staff has the most flexibility.”
Very small businesses can get away with simple invoicing apps like Invoice2Go, Square, and PayPal.
Small businesses can be perfectly happy with popular consumer horizontal apps on the market such as QuickBooks, Xero, Zoho Books, FreshBooks, and Wave to manage most of their operations.
But as your business grows, you’ll need something more scalable like Sage, Microsoft Dynamics, SAP Business One, or NetSuite. And, depending on the type of business you run, you might want something more industry-specific, like Procore and Vista for construction, Epicor and SYSPRO for manufacturing, or Revel and Toast for retail. retail and restaurants.
Beware that some of the more specialized industry players – who may offer more specific features – may not have the resources or the community that the larger players have. Even if it’s not essential right now, getting a solution designed for your industry or integrating with other industrial applications will likely meet your unique business needs in the future.
“We represent many contractors and companies in the construction industry and they have specialized needs,” McCarthy said. “Imagine a company that operates with eight different unions in different states, and they have different workers’ compensation rates that determine their costs. Some of these companies prefer construction-focused software that does all of this out of the box. »
Most good accounting software companies have independent partners who implement their systems. Rent one. Having the right partner will ensure you configure your system correctly, migrate data, and receive the training and support you need.
“Be sure to involve your accountant as well,” Adames said. “They will want to see the profit loss and the balance sheet in a certain format. Get recommendations from them first.
Gene Marks is a Chartered Accountant and owner of Marks Group, a technology and financial management consultancy firm in Bala Cynwyd.