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Which accounting software?

Choosing the right accounting software

With so many accounting packages available, choosing the right one can be a difficult task. Here are a few key issues that should be considered prior to selecting an appropriate accounting software to suit your needs.

What is available (ERP to Cashbooks)

There is a wide range of software solutions out there ranging from a complete ERP System (Enterprise Resource Planning) to basic cashbooks. These solutions vary greatly in price and functionality. An ERP system is a complete business management system software application that incorporates all parts of the business, and automates and facilitates the flow of information. Good ERP systems are an excellent tool to manage the entire business however these systems can be expensive. 

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How to select accounting software  

Identify your requirements

One of the most important factors is to identify your requirements. Are you looking for a basic package to handle your cash book transactions, receipts, and payments, or a more complex ledger-based system? A ledger-based system can help with your GST returns and monthly accounts while you could also opt for a more sophisticated system that can be easily integrated with a website and handle complex accounting such as job costing, stock control and more.

Online vs. in-house system

With so many services based online you have an option to use a web-based provider or alternatively, run all your accounting functions in-house. With an in-house accounting solution there are expenses involved in purchasing as well as an annual license and upgrades. For a web-based provider you will need to pay a monthly fee for the service. 

 

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Consider business growth

There is always potential for your business to grow, which is usually a medium term goal. The key is to identify where you see your business in a couple of years from now.

• Do you expect a sharp rise in the volume of transactions?

• Are you running a type of business where you expect a rapid change with the need for constant financial analysis?

• Are transactions such as order processing and payments for your products or services likely to be conducted through your website?

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Custom made vs. off the shelf solutions

It would be prudent to investigate whether there are tailor made accounting packages available based on your industry. If your trade association holds seminars on these issues make sure to attend an event and speak to them. 

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The costs involved

While cost may be important it should not to be the primary focus of your decision. If you cut corners it may only result in the system not being able to meet all your accounting needs. In addition, it could potentially lead to more expenses on upgrades which could easily be avoided in the first place. Think about the future and make sure that the system even includes functions that you may not need immediately so that it allows for business growth.

Many accounting systems are modular based where you can purchase modules according to your needs be it order processing, inventory, or a sales ledger. A system may include sales, purchases and general ledgers while you could determine if you need any additional modules that can be purchased later.

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General points

Apart from the type of operating system and the number of users with access to the system now and in the future, the other important factors to consider are:

• Whether the system can handle the volume of transactions

• Can data be exported to word processors and spreadsheets?

• Does it allow transactions such as orders and payments processed online to be seamlessly integrated with the system?

Training

Most accounting systems will require staff to be trained, which is one of the most important aspects that cannot be ignored. You need to ensure you allocate sufficent   resources to provide your staff with excellent training so that they can use the system to its full potential.

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Special processing requirements

Depending on your type of business there will be a number of functions you would want a system to process. This includes;

• Debit and credit card accounts

• Accruals and prepayments

• Payment terms for loans, grants and mortgages

• Part payments, receipts, and deliveries

• Component stocks and bill of materials, and much more.

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Specific reports

Another important aspect to consider is the type of reports and specific information you need from the system on a real time basis. Among the reports you may need are:

• Cash flow

• Profit and loss

• Stock balances

• Outstanding invoices

• Order status, and more

While these are some of the essential factors to consider there are a few other points to consider that could have an impact on your final choice. It is important to determine:

• Whether the system provides a full audit trail

• Does it handle modifications to transactions seamlessly?

• Is it capable of producing data to facilitate regulatory financial reporting?

• Is the system secure with controlled access capabilities?

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Making a choice

Once you have compared these points, it is time to shortlist accounting systems and make a final purchase decision. Don’t hesitate to take advantage of a free trial that many software vendors offer. The key is to choose a package that meets your needs best. Allow everyone that needs access to the system to give their valuable input so that you end up purchasing the appropriate system.

Just before you go ahead and purchase a system, consider the timing for its implementation. The beginning of the financial year is not always appropriate since there could be a number of tasks to complete such as data entry, staff training, and printing of stationery, job costing codes, and more.