As you grow a small business, keeping your books organized and up-to-date becomes more and more important. It can mean the difference between making a profit and losing money or between securing financing and going it alone. So, how can you make your small business more profitable by choosing the right accounting software? Here are 4 tips to choose the best one for you.
Know Your Needs. The first question to answer before buying any accounting software is, what do you need to do with it?"You're likely to need the following basic accounting features:
- Track customers
- Create invoices
- Track Expenses
- Keep inventory
- Report taxes
- Give estimates
- Plan budgets
Beyond these basic items, you may also benefit from some advanced features like downloading bank transactions, sending invoice reminders, doing payroll, accepting credit card payments, and using mobile apps. Avoid confusion and time waste by deciding on your needs before you start shopping.
Don't Forget Growth. Many small business accounting packages are aimed at the very small entrepreneur. This type of business usually is a sole proprietorship with a limited customer pool and only a few expenses per month. However, even if you fall into this category now, choosing a very basic software setup can limit your ability to create professional reports, track inventory, or add product lines. Therefore, you should think about your growth plans over the next 1 to 3 years before deciding what products you'll need.
Don't Overbuy. While you want to plan ahead, don't purchase software based on fancy features that you're unlikely to use. Some plans offer a basic and advanced options, and you may be able to use the basic version for a while instead of buying the more expensive tiers. For example, mobile features sound great, but consider seriously whether you will use them enough to justify the cost. Similarly, it may not make sense to pay for payroll services if you only have one or two employees. You can always outsource this service if you add more later.
Get Help Setting Up. Once you choose an accounting software package, you'll need to get it set up properly. This can be more difficult than you'd expect, depending on the complexity of your software, your business records, and your background knowledge. It's usually best to hire professional help from an accountant to get things going at first. You may then be able to do the day-to-day entries, but having an accountant available to troubleshoot and answer questions will take a lot of the stress out of maintaining books.
By thinking about your business needs before you set out to find an accounting software package, you will be able to better tailor your purchase to your business. And then, you can get on with the job of making money for your business. For more information, talk to a professional like Don Lamb CPA Inc P.S.