Accounting Software – Some Guidance on Choosing a Package

When evaluating new accounting software for your business there are a large number of factors that need to be weighed up and measured from product to product.

Pricing

First and foremost is cost.

How much is the package?

Doubtless you have a budget in mind. Be sure to capture all costs when assessing the total and not just the headline numbers. This includes hidden costs such as those listed below.

Do you need to buy additional modules to unlock further functionality?

It’s shared for software companies to sell the initial package cheap as a loss-leader or close to. Having worked as an Accountant for almost 20 years I have often witnessed clients buy packages too quickly and then finding that they needed to pay as much again to access buy or sales ledger functionality.

current sustain – is this free, pay-as-you-go or based on an annual subscription?

Another hook used by software companies. The software is sold cheap and they make the bulk of their profits by annual sustain costs or premium rate telephone sustain. And you will need varying level of sustain throughout your use of the product.

Functionality

This will be dependent upon the size of your business, the character of you business and the number of staff that need to access and concurrently use the accounting software system.

moderate or general ledger

It’s very difficult to believe that any business accounting software would be sold without this. It’s the chief of double-entry bookkeeping. If you are not familiar with the term then try here at Wikipedia where it is explained comprehensively http://en.wikipedia.org/wiki/Nominal_ledger.

The functionality that you want in a general ledger package is based around time-saving and automation. The software should have routines that do half of the posting for you. E.g. Bank payment routine, buy ledger payment routine. And a bank reconciliation procedure that can import data from your online banking and auto-match the transactions.

Sales ledger

Very small businesses may not have the need for sales ledger functionality in their accounting software although the larger your business becomes the more necessary it is. It becomes a must when you are a granting credit to your customers.

The functionality that you are looking for is:

The ability to view/print your aged debts

Credit control facilities

The ability to match cash received against noticeable invoices

The functionality to go into and print sales invoices

Additional functionality:

Auto matching of cash to invoices

The ability to post payments on account

To be able to produce statements of explain your customers

To be able to deliver customer paperwork electronically and automatically

Stock control (separate post)

Integration into cash forecasting

Integration into budgeting

buy ledger

Most of this is covered by the above.

chief functionality:

The ability to view/print your aged creditors

The ability to match payments against noticeable bills

Additional functionality:

Auto matching of payments to bills

The ability to post payments on account

To be able to reconcile supplier statement

Integration into cash forecasting

Integration into budgeting

That’s it for part one of this accounting software guide.

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