April 28, 2018 0

How to Choose an Accounting Software

How to Choose an Accounting Software

Overview

Accounting software has transformed the way in which businesses manage their accounting, removing multiple challenges with advanced features. However, choosing the right software or application is now a classic case of being spoilt for choice with a large number of software packages and options available in the market.  Before you actually go about trying to zero in on the most suitable accounting software, it would be a good idea to understand the features of various packages.  Comparing it with the specific need for accounting software and your requirements will help in finding the perfect match. Here are a few practical aspects and factors to consider when choosing accounting software that will help in zeroing in on the right one for a business.

#1 Meeting VAT requirements

Depending on the nature of your business, you may have to go in for VAT registration. If your business requires submission of VAT returns, then it would be a good idea to look for software that generates a VAT return which can then be easily submitted to HMRC. Within VAT there will be multiple considerations, such as the practical invoicing and accounting when dealing with cash. When you choose a software that offers generation of VAT returns, it would certainly help to have one that can be submitted directly to the HMRC by the software by linking it to the submission mechanism.  This will mandate the need for a software that is compatible with HMRC systems and requirements, in addition to precluding offline accounting software.  Other possible value additions and accounting software comparison could include reverse charge calculations that are intrinsic to business operations. Utilising software that performs most of the functions, while leaving out important functions would be a pointless exercise, resulting in confusion and waste of precious time. Therefore, if you are looking for tips on how to choose the right accounting software for your business you need to ensure that all the features required within this module are on offer.

Checkout Also: Payment Plan HMRC

#2 The reporting module

This is one of the more important factors to consider when choosing accounting software, because it is intermeshed with compliance requirements, such as year end tax submissions. The software needs to generate reports at pre-determined intervals, which could be monthly or at the end of project cycles. This will help accountants to gauge performance and manage finances better.  Various features that need to be a part of this module include a P&L report on a monthly basis with an automatic benchmarking feature which looks at preceding 12 months. The reports should also populate a list of assets, present and foreseen liabilities, in addition to the capital balance on a monthly basis. On demand reporting should include the list of debtors and creditors, which will help in managing finances better by integrating it with the cash flow management system, and this can also be achieved by offline accounting software.

#3 PAYE, Payroll management

A business with employees, needs to make deductions under PAYE and remit the same to the HMRC. An accounting software for small business that does not have a payroll management option may not be the best choice. After investing a certain amount in accounting software, it would be a futile exercise to manage the payroll and PAYE processing through a separate online exercise on the HMRC portal. Ideally the payroll module should work all necessary calculations, deductions and send the reports by directly linking to the PAYE online service. This will cut down on the time required for carrying out these tasks separately. The whole idea of having accounting software for small business is to cut down on time, improve efficiency, maintain records digitally and perform calculations accurately. To achieve all these objectives, it is therefore necessary that the accounting software incorporates a payroll module with necessary PAYE deduction calculations and generation of reports.

#4 User friendly interfaces, dashboards

The question ‘how to choose the right accounting software for your business?’ will ideally look at the user friendly nature of various features in the software. The interfaces need to be user friendly and free from clutter. It would certainly not help to have a software that is complex and complicated to handle, with too many operations for a single process. Once access is granted, as per the level of access control, the software should permit the resource to handle the operations smoothly and easily. The interface should therefore be simple, and a dashboard based display for reports and statistics will help management understand various metrics of performance.  It needs to be intuitive enough to help and individual find what he or she is looking for – populating lists of customers, statistics of profit and loss, invoices, pending invoices, present and future liabilities, key dates for meeting regulatory and compliance requirements such as tax returns, remittances, reports etc. This will help managers receive information at a glance, without having to dig deep or go through multiple pages to unearth the information.

#5 Level of technical support

The software developer or provider needs to ideally support the installation with updates, fixes, and service support as and when necessary. Choose a software that comes with an ironclad promise of technical support, on demand. Without the right kind of support, it would be difficult when the application runs into a bug or requires a re-installation due to one of many reasons. Loss of data, or a problem with the server on the cloud, or a hardware issue may demand technical assistance. And the software provider needs to be on hand to offer technical support, either directly or through a third party for dedicated support. Opting for a software, without support would be an unwise decision, and a recipe for disaster.

#6 Compatibility with mobile devices

This the digital age, with most users of online solutions opting to access reports or information from mobile devices. Accounting software comparison should include the features and options of accessing reports or querying information from mobile devices.  It would help management to be updated of information and query records on the go. This option needs to come with inbuilt security features to prevent the data from being compromised due to access from mobile devices which many use unsecure connections to access the internet. Ideally, an accounting software that is mobile friendly should only be configured to display information on mobiles and never permit changes to be made to the data. This will offer convenience, without compromising on the safety and integrity of the data.

#7 Integrating the invoicing module

Most of the accounting software available in the market will inevitably feature an invoicing module that permits the creation of invoices which can then be printed or transmitted electronically. However, it is important that the invoice module be integrated with the other modules of the software. In other works, the moment an invoice is raised it needs to be automatically updated in other modules permitting the calculations towards VAT, linking it to the cash flow, triggering an alert on the due date, reflecting in the aggregate of invoices, etc. It needs to reflect in all the other modules where it is required for calculations and for the generation of reports, without being duplicated.

#8 Security of data

Online applications are meeting demands of accountants with low cost versions that do not demand an outright purchase or complex installation of software. These online applications permit accountants to use the service for a fee, calculated either as a monthly rental or as an annual fee. Businesses that opt for these solutions will find it cheaper and more effective to access the information from anywhere and use the resources. However, businesses need to ascertain and verify about the safety of the data that is hosted on the cloud. This has become increasingly relevant in the light of increased attacks, resulting in a loss of data. While reputed services take care to ensure that data is protected, especially after the announcement of GDPR and The Data Protection Act, it certainly pays to ascertain and ensure that data is secure on the cloud.

So, Which Accounting Software do i Choose?

Among the more versatile, user friendly and most used accounting software, Nomisma ranks high in terms of offering the right features in a simplified manner. With modules devoted to Self Assessment, Book Keeping, Payroll and Corporation Tax, users will find it extremely convenient to handle accounting and book keeping requirements on an advanced platform that is highly secure. The solution is a fully integrated one, designed to cater to all the needs of an accountant in an organisation or business.

Though many free accounting software solutions for accounting exist in the market, a business needs to first identify the various modules, before matching it with the specific requirements and choose between a paid and free option. Overkill may also be a waste of operational expenditure. For instance, even the most used accounting software that offers features which are of no use to a particular business, will be the classic case of overkill. Similarly, compromising on certain requirements by opting for a free accounting software that does not offer all features, will be a futile exercise. Choose a software that meets all your needs at a reasonable cost, without compromising on the efficiency, the convenience, the accuracy, and compliance.

If you are looking Accountants near you, Find one on Chekin!

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