These days, given the truly powerful accounting software available for the price of a weekend away for two, even a micro-business would be crazy to carry on with manual bookkeeping. Here are some pointers:
- Don't be swayed by fashion e.g. I meet people who say on-line software is great without the knowledge to comment.
- Keep it as simple and user-friendly as possible and don't over-specify but on the other hand, think carefully about what you will need in 5 years time as changing later can be expensive.
- Don't just leave it to your accountants who typically just want a system which suits them and not your business.
- Unless you are a simple cash-based business avoid cash-based software as any financial reporting will be worthless as this ignores Accounts Receivable/Payable or inventory.
- Does the software give you what you need in terms of invoicing, customer statements, analysis and reporting and not just recording bank transactions or producing GST returns?
- Ensure the software has a decent customer database facility which can be used for mail-merges etc and can synchronise with Outlook. I still meet business owners with three different customer lists e.g. part on the software, part on Outlook & part on Excel.
- Does it allow add-ons e.g. budgeting, CRM or debtor management?
- Don't worry about not understanding accounting or double-entry General Ledgers – you don't need to and the benefits of a system which incorporates a General Ledger are huge.
Accounting software is not a cost but a vital investment and tool to improve your efficiency, effectiveness and profitability.
If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail email@example.com or Contact Us. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.