How To Choose The Right Accounting Software

How To Choose The Right Accounting Software
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Changing your accounting software can be a pain in the butt. Aside from the logistics of moving things from one package to another, there are so many different options to choose from.

From on-prem or locally installed applications to cloud apps, and modular options like inventory and payroll, there are so many things to consider. But if you’re not happy with your current software this is the time to make a switch.

With a new financial year about to start, it’s an ideal time to move from your current accounting software.

Migrate or start over?

Depending on what software you’re currently using, you can either choose between migrating your entire transaction history or just account balances.

The second approach is easier but if you have outstanding invoices payments and other transactions, you may need to manually recreate those in your new system. But you’ll want to export your history and save that for future reference and because the ATO requires you keep some records.

If you’re not sure about what approach is best for you, consult your accountant.

Cloud or on-prem?

Cloud-based solutions let you pay annual or monthly subscriptions for access to the software. You avoid up-front fees and the developers continuously update the software, adding new features and support for new accounting rules and tax laws.

Plus, you don’t have to install any special software or manage those updates yourself.

In the long term, your software may not be cheaper but you won’t have the headaches associated with software updates and other upgrades. And many of the leading cloud accounting apps support integration with other apps like CRM and POS systems. But you’re also trusting the provider to protect your data.

Watch for the extras

Whether you choose cloud or on-prem, it’s important to note that the pricing devil can be in the detail.

While a $25 monthly fee may sound OK, when you need to add $5 a month for inventory, payroll, bank feeds and other features each, the cost can escalate quickly.

When comparing different options make sure you factor in all the extras such as

  • Bank feeds
  • Payroll
  • Inventory
  • Easy export of data for backups or if you decide to move to a different package
  • Integration with other systems you already have
  • Mobile app
  • Easy BAS and other tax reporting

It’s your data

I’ve mentioned this in passing but it’s a really important point and one that is often forgotten when choosing SaaS solutions.

The data in your accounting system belongs to you. It’s critical for your business. Don’t simply expect providers to make it easy for you to export your data in a friendly format. It’s in their interest to make moving to a competitor as hard as possible.

But having control of the data is also important from a security perspective. While checking into data backup and recovery processes and promises is important, if you can have an automatic export of all your data in a usable format, scheduled then you can have some control over back and recovery. And it will make switching platforms easy as well.

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