But without adequate planning, technology can also unleash a monster that will wreak havoc within your company. This is especially true when it comes to your company's accounting system.
Here are some things to consider before purchasing accounting software for your business:
Your first step has to be an assessment of your business' accounting needs. Do you sell goods or services? If you sell a product, then your accounting system needs to be capable of tracking your inventory. If you sell a service, then a client tracking system would be another important feature.
Either way, your software should be able to meet your tax reporting, invoicing, and payroll needs in addition to the basic accounting features required to monitor ongoing sales and expenses. But be careful! Buying an oversized software program can quickly burden your accounting department with an unwieldy and impractical record-keeping system.
Growth should be a part of every entrepreneur's long-range plan. As your company grows, your accounting software should, too. By planning for growth when you purchase your software, you will save yourself unnecessary costs and headaches down the road.
Many (but not all) accounting software providers intentionally design their products with expansion in mind. The key is finding one that allows you to purchase expansion components or upgrade to a larger system at a discounted price.
It's also important to purchase software from a reputable company that will still be in business when you are ready to upgrade. If they are no longer around when it's time to expand your accounting system, then you will most likely have to start all over with a brand new system.
Something else to think about is whether or not your new software will be compatible with the hardware and software you are currently using.
The most obvious compatibility issue whether or not the new software will function with your computer's operating system (e.g. Windows). Beyond that, you will need to know whether the new software is capable of importing the data from your current accounting program or spreadsheet. If you can't import from your existing program, just know that you will need to re-enter a certain amount of old financial data into the new system, particularly if you are transitioning to the new system in the middle of your business' fiscal year.
Cost is always a consideration and to some degree, the effectiveness of your accounting software will be determined by what you are willing to pay.
Accounting software programs can be purchased for less than $100, but these programs are typically limited in terms of consistency and expandability. More reliable programs can cost hundreds or even thousands of dollars, depending on the size of your business.
Accounting software is a wise investment for your business. If your experience is like that of most entrepreneurs, you will find the financial outlay more than pays for itself by enhancing your company's efficiency and productivity.