If you are using pencil and paper, or even a spread sheet, to do your accounting, it is costing you a lot of time. It probably worries you and is very easy to make mistakes. The good news is that accounting software is getting much more efficient and powerful to assist your business.
However choosing from the established programs and their many features and newer online programs is getting harder and there are many issues to consider.
When choosing accounting software, start with a checklist of features that the program must have, and others that you would like it to have. To establish this list, firstly think about your own business and your needs. Make a list yourself, and then talk to your Bookkeeper. Ask them what they think of your list.
Why a bookkeeper and not someone else? Accountants are good with tax software which does tax returns and IT people with networks, PC’s and Internet connections. But good bookkeepers are used to dealing, on a day to day basis, with fellow small business owners and providing solutions. They handle a variety of current business programs and their features in many different situations. They should know about any current bugs and problems. They should know about features you may not have thought of, but may be great for helping you manage your business better. And of course good bookkeepers will be BAS Agents, or working under their supervision, so that they can check the accuracy all your figures, arrange for extensions and lodge your BAS for you if necessary.
A First Class Accounts bookkeeper can tell you about what sorts of processes in your business can be automated so that no-one has to do any real data entry for that area. You can automate and streamline many processes these days like timesheets, payments, stock ordering, team scheduling, onsite invoicing and so much more.
Many features can be taken for granted, but here are some ideas of features that you may want to add to your list:
- Import existing data on customers, suppliers, inventory items or transactions
- Automation of basic transactions
- Bank Feeds
- Setup up of Users with Passwords and audit trails
- Roll over data file for Financial and Payroll years
- Backup copies of data for specific periods, or
- All your data kept in the file
- Legislative and Management Reports on an Accrual or Cash basis
- Simple graphical tools the “sum up” your financial situation
- Direct Payment system
- Internet access for yourself, staff, accountant and bookkeeper
- Interaction with other programs – tax and add-ons such as tax, web sites, CRM, etc.
- Interaction with other hardware – iPhones, Android, Macs, etc
- Enter/Import Timesheets
- Apply all payroll legislative requirements
- Process Pays – automatically adjust for Leave, apply current Tax Rates, calculate superannuation and track liabilities
- Keep track of outstanding Entitlements/Leave
- Print Payment Summaries and lodge with ATO
- Point of Sale
- Inventory management
- Locations, serial numbers, restocking alerts
- Hardware compatibility
- Salesperson reports
- Profit and Loss Budgets and Cash Flows
- Profit Centres, project Profit and Losses
- Customisable Invoices, Statements and Cheques
- Calculate depreciation and maintain an Asset Register
- Great range of existing but customisable Reports
- Credit control features
- Mail merge with MS Office/Google Docs, etc
- Standard Business Reporting is coming and most software will soon report directly to government departments for you (at a time of your choosing!)
Cost is another factor to look at. It really is worth spending a little bit more for good software. It could save you a lot of money in the long run, and even be the difference between a great business and a failure. You can often start with a basic version and upgrade features as your business grows. For instance, you may not have staff yet, but are intending to down the track. Make sure your software has a good upgrade path that suits you.
Some software vendors charge just an upfront fee, with upgrades available at an additional cost. Others charge just a monthly fee that covers all upgrades and sometimes other features like bank feeds. Be careful to measure all these costs and also indirect costs such as system maintenance, backups, upgrade fees, system restores, training of staff, networks, and internet access. Some of these costs may already be covered.
Many people ask about the online/cloud/internet based programs and are these safe. Usually they are as safe as a computer based program/network or doing Internet banking (they use the same security features). So it comes back to your attitude. One user liked the idea of a cloud based program because he thought it would be harder for the tax office to find!
In our office the internet is at least as reliable as our network, but that may not be your experience in your location. These days it is also possible to get routers that can have a fast ASDL line attached as well as wireless internet so if one goes down, you’ve automatically got the internet through the other with no downtime. You can also often arrange your phones to go through this system for cheap VOIP calls.
Three of the most common programs for micro/small business come from (in alphabetical order):
- MYOB – the best know product in Australia has a huge range of business and tax products and obtaining staff that have used these programs is pretty easy. They are currently transitioning from desktop based products to Internet based programs that are entirely rewritten. There is support from a large range of Training organisations, online notes, support lines and bookkeepers.
- Reckon – has the popular QuickBooks range and a huge variety of other programs including personal software for your non-business affairs. They are cleverly innovating with “Hosted” versions that are very good value and internet based. The QuickBooks name will soon be updated as well. Support is available from both bookkeepers and Support staff.
- Xero – newer to Australia but with a growing band of very dedicated users. This is purely an Internet based program and can be credited with “encouraging” others to head the same way. It’s easy to use and has a very informative graphical interface and the monthly fee includes bank feeds and links with many other programs. Excellent online support, training videos and free webinars.
Talk to your bookkeeper about which one will be best for you and your business and how to get the most out of it.