If you are looking to streamline your books, the first thing you need to do is to get an accounting software where you can record your business transactions. For that, it is essential to determine the software that will best suit your business.
There are certain factors that need to be considered while selecting the appropriate accounting software. Let us have a look at those factors –
1. Virtual Mode or Real Mode
Software is available both in virtual and real mode, both having their own advantages. Virtual mode ensures that the data is synchronized across all the departments. It can be accessed from anywhere, along with maintenance and backup facilities.
On the other hand, the real mode does not require strong internet connectivity and works well in a retail store.
The mode you select depends upon the nature & type of business and the availability of resources. However, it is generally recommended to have a virtual mode because your records can stay advanced and up to date.
2. Data Shield
This is the most important factor to consider if you have chosen the virtual mode for your software. You will never want your data to be accessible to others, especially your competitors. Hence, you must ensure that the software you are choosing is ensuring data protection.
You can get this assurance by directly asking the company or checking their website.
3. User Friendliness
Many business owners do not have a great knowledge of accounting systems. Hence, software that ensures the ease of bookkeeping should be chosen. Complex accounting software also incurs the cost of training the employees and thus, should be avoided.
User-friendly software also ensures that the owners can check the accounts anytime even when there is a professional accountant appointed.
4. Fulfilment of Business Requirements
You are using software to meet your accounting requirements. Hence, you should list down all your requirements and check whether the software that you are considering fulfills those requirements.
Some general requirements are – creating invoices, recording and classifying transactions, managing the list of debtors and creditors, creating and managing gstr, and viewing final accounts.
Some businesses may require features like facilitating multi-currency transactions, integration with other business software, or managing payrolls of the employees.
Cost is one of the basic concerns of all businesses, especially for small business owners. Offline mode software is generally more costly as compared to virtual mode software which is available at monthly subscriptions. You should consider the software that fits your budget.
Also, some software comes with certain hidden costs. It may be for upgradation, licensing, or further support. Try to find out all the hidden costs attached to the software. This can be verified from the pricing page of a company’s website.
6. Facilitates Expansion
Businesses are meant to expand. But, many business owners make a common mistake while purchasing accounting software; they buy the software according to their current requirements. They overlook the future requirements.
This results in businesses incurring further costs to migrate the data to new software. This cost is, generally, quite high and should be avoided. Thus, you should select software that complies with your future requirements and facilitates the expansion of your business.
7. After-Sales Support
Using accounting software requires some support, especially in the beginning, no matter how user-friendly the software is. Many business owners overlook this need and face unwanted consequences.
The user’s manual can help sometimes, but not always. So, if you face any issue and do not have adequate support, your entire investment would be pointless.
Hence, you should check the after-sales support before using the software. You can do this by checking out reviews written by its existing users.
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8. Ease of Exit
What if you don’t like the software that you have purchased? It may be due to the existence of some bugs, uneasiness of use, or lack of customer support.
You should, thus, be ensured that the software you use facilitates ease of exit. For this, virtual mode software is preferred because they have monthly subscription plans. Also, you need to ensure that the accounting software you are using facilitates the export of data after exit. This data should be preferably exported in an Excel file so that it can be easily transferred to your new accounting software.
We have seen the 8 things that you need to be ensured before using accounting software. Keep a check on every factor mentioned above and take a prudent decision.