How to Choose Accounting Software for a Small Business?
Accounting Software for a Small Business
Businesses no longer maintain physical books of accounts to track their finances. They now rely on accounting software to track revenue, prepare GST invoices, and manage inventory. The reason a business accounting software is so important today is that it minimizes scope for human error and automate repetitive tasks that don’t need manual effort.
If you’re looking for a competent accounting software for your small business, look at some key parameters to pick one that best serves the needs of your company.
Need for an Accounting Software
Picking an accounting software that is the best fit for your business requires rigorous scrutiny and testing. Depending on your industry, revenue, and size, you’ll need a software with different features. The type of accounting software a small business ultimately chooses has long-term ramifications for its finances and revenue management. This is why extensive research is important before zeroing in on accounting software.
It is also important to keep in mind that employing accounting software is no replacement for the human element. It will automate bookkeeping and related functions, but the workers using it must be financially literate.
There are several options available in the market today.Some, such as Ezo, have been specifically created keeping small businesses in mind. This free accounting softwareis best for small businesses that cannot invest a huge amount of resources but need a reliable tool to manage finances. This GST invoice software can help in filing returns, tracking expenses, sending payment reminders, and managing inventory.
Decide on a Budget
Accounting software for small businesses are available in a variety of options to suit every possible budget. Some are available on the internet for free, but these generally offer a limited number of features. Their more advanced features can be unlocked by subscribing. Stillothers are general applications which are suited for a wide range of businesses. These can be installed and used right away, and have a very short learning and acclimatizing period involved.
Before deciding on the accounting software, it is important to conduct a cost-benefit analysis in terms of how much your business will have to invest in exchange for the value addition. The more specialized the software and the more customizable; the higher will be the cost.
When choosing accounting software, it is also crucial that the workers who will ultimately use the software are kept in the loop. Many a time, the accountant will prefer software which operates on a system similar to the existing one. The accountant's opinion will also be useful in deciding whether a particular accounting software can meet business requirements adequately both in the short and long term. Every software offers some degree of customization, updating and/or conversion. Choose one that offers the features and functionalities that are specifically useful for your business.
Features of an Accounting Software
Whichever accounting software you choose should have the following features:
i) It should be GST compliant – This allows for creating appropriate GST invoices, helps in setting GST rates and in calculating GST amounts. Ezo helps you draft, send, and track professionally created GST invoices over multiple channels
ii) It should allow quick purchases and sales management – Invoices should be managed, modified and scheduled with ease. Invoice status should be tracked from a single point
iii) It should streamline inventory – Purchase and sales orders should be evaluated to figure out just-in-time stock requirements
iv) Business accounts reconciliation – Books of accounts can be maintained and matched comprehensively and seamlessly
v) Report generation – Decision making should be speeded up and simplified through accurate analysis of data
vi) Create budgets – Budgeting allows for control over the various aspects of inflow and outflow in the business
vii) Customizable modules – General ledger module, accounts chart module, trial balance module, balance sheet module, accounts receivable module, accounts payable module, point of sale module are some of the important functionalities.
Make your decision only after you’ve carefully evaluated the features of the accounting app. For small businesses, a free tool like EZOcan be the right choice for invoicing, payment, and accounting purposes. Contact LegalDocsfor more guidance on choosing the right accounting tool for your small business.