Selecting new accounting software requires more time than most businesses realize. To complete the proper amount of research and assessment of various programs, most business owners should expect to spend weeks, not months, instead of days or hours. However, once the right solution is identified, the improvements that it can help the company realize are often well worth the time spent selecting the software.
One of the first things you'll do when selecting new accounting software is to look at the processes that your business currently uses and see if there are ways to use software to make those processes more efficient. Many companies use the implementation of new financial software as a good time to also change some processes to gain more efficiencies from the new software's extra features. If you consult with financial software reviews, you'll see that the market for accounting software is roughly divided in to four segments: entry-level, small to medium scale business, small to medium scale enterprise, and enterprise resource planning.
A brief overview of each segment follows.
Entry level software is designed to work best with small businesses (those with 20 or fewer employees and less than $5 million in sales). Roughly 5 million companies in the US meet the profile for those that are best suited for software within this segment. This is the largest group of companies and is often the reason that accounting software guides exist - to help smaller businesses choose new software.
Small to Medium Business (SMB) software is designed to work best for companies with $5 to $100 million in sales and no more than 100 employees. This is the second largest market segment and estimates say that about a half a million companies in the US could benefit from new software designed for businesses of this size.
Small to Medium Enterprise (SME) software is the next step up and is designed for even bigger companies - those with up to $500 million in sales and up to 500 employees. Approximately 17,000 US based companies fit this profile.
Enterprise Resource Planning (ERP) software is designed for the largest companies and can accommodate well over 500 employees and billions of dollars in sales. The number of companies that fit in to this segment is fewer than any other segments, although some estimates have claimed as high as 17,000.
These segments are only roughly defined guidelines for looking for new software. These are not rules that must be followed. Some businesses that fall in to the the SMB category may find that ERP software is actually best for their applications due to it's additional flexibility or other features that the company may need. In this case, they should opt for the ERP software.
When selecting software, make sure you know what you require from the new accounting package and keep those requirements in mind. This will allow you to avoid purchasing modules or features that you do not need in the new software. Overall, software designed for larger and more profitable companies come with more capabilities. In some cases these capabilities can be beneficial, but it is also important to note that this is not always true. At times, additional capabilities that are not used can actually slow down the software.
At the same time, purchasing software with too few capabilities can also create problems. If you purchase software without a module that you need, you may be forced to use an outside application to run that process, which can cause headaches as well as present problems with compatibility that can add costs to the overall project.
Accounting Software Small Businesses
For small businesses owners, accounting work is usually the last thing that they will want to get their hands on. This is because they feel that majority of the time and effort should be spent on sales and operations rather than on accounting. However, accounting is a very important part of any business and troubles will arise if any business falls short of the adequate accounting procedures needed when submitting for tax returns and other matters related to taxes.
Therefore, the next best thing is to outsource your accounting tasks to a professional firm to handle. When it comes to accounting services, there are basically three main tasks which are as followed:
1.Business forms generation. One important aspect of accounting services is to generate professional business forms such as invoices, receipts, checks, tax returns and monthly revenue and expenses statement. All these forms are needed to track the performance of a company. When submitting your tax returns to government, these forms are important documents that cannot be missing.
2.Tracking of company revenue and expenses. Another main task of an accounting firm is to track and analyze the revenue and expenses of your company. Professional accounting service will also include cash flow forecasts and planning to make sure that your business can operate smoothly without any cash flow problem. When this is not done properly, a business will run into serious problem due to disruptions in cash flow management. An accounting service firm will also make sure that all revenue and expenses are accurately tracked and recorded. This information is needed when filing for tax returns. They will give you advice on which expenses to cut so that your cash flow will be healthy.
3.Recording of assets and liabilities. For any business, it is extremely important to track account receivables, debts and inventory. One of the problems that many small businesses will face is that they are sometimes too busy on expanding their businesses, making it hard to keep their records updated with their current situations. This is when an experienced accounting service provider or software will come in handy. If you intend to buy accounting software for your staff to handle your accounting operation, make sure that you do the necessary research or consult your CPA first. As there are a lot of different accounting software in the market, it is important for you to find out which software will be more suitable for your business operation.
When looking for accounting services, you should take your time to shortlist a few firms. Some firms offer both accounting service and software which will greatly aid your business.
Both Alex Monroe & Cheow Yu Yuan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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