Choosing accounting software for business
With so many packages out there, how do you know which one's best for you?
If you are in any way unsure, it is best to get some help with your decision. First and foremost, talk to your accountant. There is no point buying a system that they can't extract data from.
This is what Gena Wilkinson of Café Vitae did before upgrading their system. Having started originally with manual accounting, the business gradually grew and computerised in 1981. But their lack of IT and accounting knowledge, meant that within two years the package was out of date. They bought a second system but within a few years again, the system needed to grow with the business.
“As the company expanded we needed an accountant and accounts staff in the early 1990's. We were now turning over £3 million. We searched and looked at a lot of packages for both recruitment and integration into accounts. We went to exhibitions, had demonstrations from literally dozens of companies, it was time-consuming and soul destroying. We eventually took on board a consultant to find us the right package.”
Another small businessman who called in the professionals was John Furley who runs his own photographic studios in Alton, Hants. Having dabbled with two previous packages and a manual system, Furley was persuaded to invest in MYOB. But the manual was offputting and it was a couple of years before he paid a consultant to set the system up for him. After one and a half days work and a 15-minute tutorial, his system was ready to run. “It really was money well spent,” he says.
Most will give out a dummy or trial version for you to try before you invest in the real thing. If they don't, you have to compare the benefits of knowing what you are buying against a system that you have no experience of. If you can, run a dummy company and make all the relevant entries for a couple of weeks. This is particularly important if your company is already up and running rather than a startup.
Planning for growth
Changing or updating an accounting system is not only expensive it is also time-consuming. It also opens up the possibility of problems or errors being introduced. In general, it is something that most businesses do as little as possible. That is why it is a good idea to start with the best possible system which can grow with your company. We asked Geoff Wood of accountants Levy Gee to give his rundown of the biggest factors to consider if you know your business is going to grow over the next five years.
- Foreign currency – many transactions allow you to enter transactions in a foreign currency but then convert into sterling. This is of little use, says Wood. What is usually needed is to maintain the debtors ledger and back account in the original foreign currency.
- Sending invoices by email – an efficient and timesaving way of keeping invoicing up to date.
- Internet transactions – if you are developing your website you might be hoping that customer sales on the website will be an integral part of your business one day.
- Remote access – this is particularly useful if you have sales staff, for example, that are on the road but still need to check stock levels or customer information.
- Electronic banking – as with personal accounts, many banks are pushing internet only accounts as they are cheaper and easier to administer. Even if it is not on your agenda right now it could be soon.