MYOB, Xero, Quickbooks, Sage, Netsuite, Reckon and the list goes on.

Selecting an accounting software package to manage your business transactions is a decision which is often underestimated by business owners, large and small. Transactions are the lifeblood of running a small business. They determine the all-important tax consequences each June and can be the defining point in accessing financial support to grow and scale up your business.

So why leave the management of your finances and sales – something that is so influential to your overall business - to just any old product.  

Here we look at some key points to help you decide what accounting software will meet the needs of your business best. As your trusted Kelly+Partners advisors we’re here by your side to help weigh the pros and cons of your current accounting processes and systems and help you to transition into a new software program and streamline your accounting administration.

How much should your accounting software cost?

The cost of introducing new programs can seem daunting.

When considering the cost of accounting software as well as the time and effort required to introduce the platform and train staff, costs can quickly start to balloon into what seems like an unjustifiable figure for a small business.

With full-service accounting and payroll software products for SME’s generally costing businesses between $30-120 a month, it’s essential you include your trusted business advisor in your decision making. Prices are not always all-inclusive so you want to ensure the accounting software you select meets all of your business management needs without needing to purchase costly add-ons or supporting software.

While at first glance these prices seem hefty, just like any other expenses in your business, you need to look at the take up of software as an investment and calculate projected ROIs (return on investment).

Ask yourself: 

1. What is the cost benefit of the uptake?

2. What value does this software bring to my day to day routine, the lives of my staff and the outcomes of my clients?

3. How will this accounting software provide a return for my business?

4. Is this an unnecessary add-on or an unavoidable necessity?

Consider the cost from a management perspective; without an efficient software program how will you produce reports?

Without these accounting programs, and without a management reporting plan, you are often left to a once-a year reporting method, this being your annual compliance. Again, a cost that can be better and more efficiently managed through an accounting program.

Think your excel spreadsheets are doing just fine?

What can Accounting Software Programs do that excel can’t?

While excel is a fantastic tool to collate and present data on an ad-hoc basis, to expect the world and more from excel and other similar spreadsheet software when it comes to your business’s finances and accounting, may not be the best use of your precious time.

While with some training and expertise, excel can in theory be used to produce many of the same reports an accounting software could, what these software options offer that excel cannot, is automation. That is, the time required to produce a Xero or MYOB report on excel is of no comparison to the mere seconds it takes an accounting program.

Let’s use comparative reports as an example.

If we were to compare June 2020 to June 2019 – which has been an incredibly common report given the requirements to claim JobKeeper – an accounting software could produce this information at the click of the button. Meanwhile, to create this report on excel, this complex process would involve locating bank statements for the required dates, extracting the data, creating a formula to support the relevant data, populating the spreadsheet and ensuring all data, formulas and formatting is correct. Now imagine one digit has been incorrectly entered somewhere along this process…

As you can see, when it comes to accounting and managing your small business’s finances, incorrect formatting and data errors can be an avoidable nightmare, with the help of accounting software!

Business Suitability – Finding the right fit for your small business

Your business was not shaped by a cookie cutter so you shouldn’t take cookie cutter advice on which accounting program will best suit and complement your business.  

Let’s take a small retailer for example. Commonly, they will have a POS  management system along with EFT terminals (Electronic Funds Transfer), all of which will deposit into the attached bank account separately. More terminals, more bank data, more data entry. With this in mind, you want to select a bookkeeping option that will integrate and complement your POS and provide live bank feeds to minimise data entry.  

Everything you do, should be done with saving time and money in mind so you, as a business owner or small business manager can do what you do best – whether this means sales, management or any other function.

You and your accountant likely know your business and its operations better than anyone. You should always take the opportunity to discuss this decision with your trusted advisor as they’re in a far better position to support your transition rather than being pitched by a product representative. Remember, they just want your business, we want the best for your business.

Ease of Use – Which accounting software is best for you?

Not every product is suited to every skill level. Accounting products can often be complex items of software.

Trials are a great way to get to know a program and most accounting software and offerings will provide you with some form of free trial before you commit to buy. This is often the best way to gauge your feelings and see how the software meets the needs of your small business. The saying ‘try before you buy’ exists for a reason after all!

If you’re ever feeling overwhelmed by the options out there, remember at Kelly+Partners, it’s our job to marry everything you bring as a business owner to a complementary accounting software.

Finding the right accounting software for your business is highly dependent on how you manage your business:

• Are you heavily involved with monitoring the numbers of your business?

  • In this case, you may want to consider an accounting program with some higher level complexities.

  • This means you’ll have access to a greater range of reporting functions which may be value-adding to your business particularly if you are business minded yourself.

  • Example: MYOB is one example of a comprehensive software program that can meet complex business needs.

• Does your trusted advisor provide you with regular management reports along with analysis, to guide you in your decision making?

  • Where you are more comfortable leaving the reporting to an advisor, the need for a simpler and more straightforward program may be a better option for you.

  • In the case, the software you need should be able to produce essential reports such as profit and loss while the more complex areas can be left to your business accountant.

  • Example: Xero’s base package is just one example of a package that suits lower entry level business needs.

Payroll & Single Touch Payroll

A business that is complex enough to require a transaction management system will often also need to consider employees. Management of employees is incredibly important these days, not only for your employee’s health, wealth and wellbeing but also for the sake of your business in terms of its management and regulation.  

With the recent introduction of Single Touch Payroll, we have seen a bulk migration of small businesses over to various accounting software products. For some, this was a natural progression after considering this move for a long time. For others, this was a daunting process where business owners were pushed far beyond their comfort zones.

Gone are the days of old school finance management and accounting, with small businesses today needing to embrace technology to stay with the pack.

As a business owner, these are the questions you should be asking around payroll and accounting software:

1. Do we need payroll capabilities?

2. If we need payroll, is this the only thing we need?

3. Do we need payroll and account keeping software, will the product meet both these needs?

4. If our payroll is more advanced, are there software add-on’s that can integrate to meet my business’s needs?

Implementation – transitioning your business with a new accounting software

When considering the implementation of a new accounting software, contacting your trusted advisor is one of the best steps you can take. As accountants, we work with a huge variety of programs, platforms and accounting software daily, meaning we have the skills and experience to not only know how to use these programs but also give your small business an added advantage in advising the right fit for you.

Plus, while the depths of accounting software can be confusing, working with a trusted advisor like your accountant means you have a technical hotline available to you as a soundboard for any questions you may have or to explain things in an easy-to-consume way.

As we can see, adopting a new accounting software for your business is a major business decision that should be carefully considered. It should never be a quick choice made on the run as this can have major implications for your business which may not only harm your small business but also waste time if this means switching and re-switching programs 6, 12 or 24 months down the track.

Your trusted advisors here at Kelly + Partners are in the business of business. Genuinely wanting the best for others, we are here to support you through your financial journey, good, bad or otherwise.

Thinking about making the switch to an accounting software?

Is your current accountant providing the support you need to weigh up the pros and cons of software options?

You don’t have to go through this alone - contact us today and start the conversation on giving your business the tools it needs for success.