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Choosing the Right Accounting Software

Comparing Accounting Software For Your Business

Regardless of their size, any business should have a strong and reliable accounting process. Accounting software allows you to organize your business finances, from invoicing to receivables, and stay compliant with the ATO. How can you choose the right software for your business? There are so many out there that even accountants & bookkeepers (including myself) choose to concentrate only on a few.

Accounting software can be hard to compare, especially when you’ve just started and know very little to nothing about accounting and it is difficult to foresee what your business will need in the long run. Accounting software have different prices and similar features. XERO seems to be the most wanted, and in fact it is also the most expenses. MYOB still holds its reputation and QBO is one of the cheapest in the market and many practitioners despise it, however, it still has many loving clients.

Why Do You Need Accounting Software?

Accounting software allows businesses to balance their books, run reports, keep a tidy database of customers and manage invoices and receivables. What are the benefits? The main and most important thing is that it allows you to balance everything with a proper double-entry accounting rule. In accounting, everything must balance before we can post any journal, and the software won’t let you post the journal unless it balances. Am I speaking another language? No worries, let me be simpler. The key benefits of accounting software are:

  • It keeps everything organised (sales, expenses, bank reconciliation, bank feeds – only for the online version).
  • You can send quotes, invoices, remittance advices, everything using one and only one program. No more PO and flying quotes in your office.
  • Your accountant and BAS Agent can access your books directly with their own equipment. They don’t need to come to you and you don’t need to go to them! Everything is simplified for both parties and for many businesses even more efficient.
  • You can access your reports at anytime and anywhere. As a transaction is registered in the system, the reports update themselves. Comparison from one FY to the other is quicker and you have all the info you need to see at a glance. Yes, ONE GLANCE!

Is it Best Cloud-Based Or Locally-Installed Software?

There are two types of accounting software: cloud-based accounting software and locally-installed accounting software. Cloud-based is the online version which gives you mobility and it is usually very user friendly and easy to use. Locally-installed software is downloaded and installed onto a computer via disk or link. It is more advanced and in theory, more secure from hacker attacks. You don’t have any kind of mobility with this version, and your accounting skills must be higher. It is generally advised for bigger/more complicated organisations. The accountant and bookkeeper can still access the software.

How Do You Choose Accounting Software?

As mention above, it depends on the size of your business and what features you need to use. A few things you need to consider before making the decision are: the number of users, how much control you need over the finances, if there’s any payroll that needs to be generated and how often, if you only manage one or more businesses. Each accounting software provider offers a cloud-based version and a downloaded one. The price between the companies differ, however, their packages are very similar in terms of features. The biggest price doesn’t always mean the best software. You might find yourself needing only a few features, so QuickBooks Online or Reckon One could be the right choice for you, however, if you have a more complicated business and need to do more things, XERO could be the answer.

Can You Start Using the Software With Zero Accounting Knowledge?

Carefully consider how much you already know about accounting and if you know nothing, please seek help. A simple journal entry can become a nightmare if you don’t know which account must be credited or debited. Bank feeds can be difficult to understand and bank reconciliation might not reconcile if something has been incorrectly allocated. Profit and Loss reports and Balance Sheet reports are essential for the operation of the business and must be checked regularly (many businesses do it daily!).

Final Tips

Choosing the right accounting software can seem like a daunting task at first, but don’t let that keep you from starting your search. My advice is always to contact your BAS Agent or Accountant and they will be able to advise you depending on the size of your business and its needs.

Sharon Prestia
North Brisbane Bookkeeping

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