The right bookkeeping software will simplify the process of tracking your business’ financial health, by greatly reducing or even eliminating the need for redundant data entry.
As well as saving you hours of time, the right software will monitor incoming and outgoing funds, create invoices, track expenses, and generate a variety of reports to help analyse your business’ performance from various angles.
Depending on the system, the possibilities can be endless.
But with so many different bookkeeping software options out there, it begs the question: How do you know which bookkeeping software is right for your business?
Last month, we shared some ‘Top tips for choosing the right software for your business.’
We couldn’t possibly fit all our tips into one blog though! So, today, we’re back with a few more for you.
Think about scalability
Many businesses make the mistake of buying bookkeeping software which suits their needs at the time of purchase, without considering what their needs may be in the future.
As their business starts to grow, their bookkeeping software may fail to keep up, meaning they’re required to transfer their data from the current system, to a new one – this can be a painful process to say the least.
Therefore, choosing bookkeeping software with the capabilities to scale up to your future needs and business growth, is an important consideration.
Ensure it’s compliant
The simplest bookkeeping software is easy to use and often looks more attractive. However, that doesn’t always mean that the level of compliance is the same as other software on the market.
Which is why it’s so important to check the following:
Does the software provide an audit trail?
– You must be able to track all transactions which occurred throughout the year. For example, if the software allows you to delete an incorrect entry, it should also record the deletion, allowing you to check back if necessary.
– The software should conform to good accounting practices. For example, an invoice should remain open in the next accounting period if you have only received part payment.
How does the software manage backups?
– The software should ensure that you do not accidentally revert to using old data.
– You should be able to keep records as long as required. For example, the requirement for retaining most accounting information is six years and most payroll information for three.
Consult your Accountant or Virtual CFO
Prior to making your final bookkeeping software decision, it’s wise to consult your Accountant or Virtual CFO for advice.
Why? Because they have a great deal of experience using various types of software and can advise you on whether they feel your choice will suit your specific business’ needs.
The right Accountant or Virtual CFO, will also steer you away from a solution which might seem like a good fit, but is a poor performer.
Industry-specific or generic?
There are two types of accounting software: industry-specific and generic.
It’s up to you to decide which one will be best for your business.
Industry-specific bookkeeping software hones in on particular features unique to the industry. Software built for the manufacturing industry, for example, may offer integrated inventory and warehouse management options, as well as the standard functions found in most bookkeeping software.
Generic software is also known as “off-the-shelf” software and offers a broader range of features to suit most users.
While industry-specific software is often much more expensive than its generic counterpart, it may be worth looking into, as a more suitable option long term.
At proCFO, we are Perth bookkeepers too and have spent years analysing, researching, and utilising different types of bookkeeping software. There’s so much to share we couldn’t possibly fit all our tips into one blog!
If you haven’t done so already, visit our website to read Part 1 of ‘Top tips for choosing the right software for your business’,
Contact us today to find out how we can help you choose the right bookkeeping software for your business.