Managing a business’s financial accounts is uncharted territory for many small business owners. Many entrepreneurs see handling their own accounting needs as too difficult or even downright scary.
Today, more than ever, there are a number of easy, intuitive accounting software options that allow businesses to successfully manage their finances—no accounting degree required.
Accounting 101: what to know before you buy
Before you start down the path of researching accounting software platforms, take the time to brush up on the basics. The list below is a good place to start as you work to gain an understanding of the key accounting functions you’ll likely need when running your business.
- Accounts Receivable and Invoices
Track incoming revenue, generate invoices, print shipping labels, and track shipments
- Accounts Payable
Track payments due, create checks, pay vendors and generate purchase orders
- Payroll and Timekeeping
Track employee hours, create checks, process direct deposits
- Project Tracking
Track project timelines, deliverables, and budgets
- Inventory Management
Monitor inventory levels, track stock volumes, forecast product reorders
Automatically generate a variety of standard and custom reports to track company financials
Beyond these basics, many accounting software solutions offer additional features such as:
- Time Tracking and Billing
- Banking and Reconciliation
- Credit Card Processing
- 24/7 Mobile Access
- Tax Services and Support
- Remote Back-up
- and more
As you sift through accounting software options looking for the right one for your business, know that there’s no single, perfect solution. Just as every startup or small business is unique, so too are accounting software platforms. Each has its strengths and weaknesses. The question then becomes, which features do you absolutely need to run your business and which are less critical to your success?
As you start your search, here are a few important questions to ask:
Which accounting features are ‘must-haves’?
Determine which accounting features are the most critical for your business. This is the simplest way to quickly weed out inadequate solutions. If you employ a staff, payroll services with direct deposit that also save you from calculating timecards may belong on the list. If you’re a retailer, having features like inventory management and credit card processing could save you significant time and money.
Do you need industry-specific software or accounting capabilities?
Different industries have different requirements when it comes to reporting financials. You can find accounting software solutions tailored to the specific needs of construction companies, healthcare organizations, manufacturers, and many others. Knowing your industry’s requirements and best practices should help you determine which accounting functions are ‘must-haves’. If you’re not sure, this is an area worth researching. Industry trade associations and talking with colleagues are great places to start. Another helpful resource is Accounting Software 411, which provides information about niche software options developed for industries with specialized accounting needs.
What type of user interface is the best fit for how you work?
If the sight of a spreadsheet makes you break out into a nervous sweat, steer clear of software that relies on Excel and CSV file reports or other overly-structured user interface formats. You can find accounting software platforms that operate payroll and invoicing with simple visual reports created specifically for the untrained accounting eye. However, if nothing makes you happier than color-coded pivot charts, then there’s an accounting software solution out there with your name on it, too. Either way, look for an accounting software solution that works the way you do.
How important are features like data security, customer support, and scalability?
What non-accounting-specific requirements do you have for the software you choose? For instance:
- How important is security and safeguarding your and your customers’ information?
- Do you need 24/7 customer support?
- Can the software scale to meet your needs as your business grows?
Knowing your needs ahead of time will alleviate buyer’s remorse later.
It’s time to find your perfect match
Armed with a knowledge of the types of accounting features available and an understanding of which features you need to manage your financials successfully, it’s time to dive in and determine which software solution is the right fit.
Here are some of the most popular software options out there, though there are certainly others.
To dig further, check out this side-by-side comparison from PCMag with their picks for the top 10 small business accounting software systems. Many of these solutions offer a free trial so you can try them before you buy.
Whichever accounting software you choose, make sure it checks as many of your ‘must-have’ boxes as possible and is a good fit overall for how you do business. Never be afraid to ask questions and get guidance from a professional accountant. And, once you’ve selected your accounting software, keep learning! Managing your business’ finances will become easier as you continue to learn the ins and outs of small business accounting.
One of the best ways to navigate your business’ accounting needs is with support and guidance from a SCORE mentor. Contact a SCORE mentor today and get your business on track for financial health and success.