Selecting the right accounting software for your business

Investing in the right accounting software for your business is vital to its success. Not only does your software have to be right for you today, but it also has to work for you at least 5 to 10 years from now. Good accounting software can grow with your business as it expands. A new accounting and business management solution can be assessed within 4 sections: Technology, Productivity, Features and Value. With that in mind, here are three key points to remember when considering a new accounting and business management software.

1) The Right Fit

The reality is there is no software solution out there that will fit every aspect of your company’s needs. Most businesses fail to realize that specific internal processes will need to adapt to a new program. However, selecting software that can integrate most of your day-to-day business’s core operations as much as possible is achievable.

The needs of your warehouse and finance teams need to co-exist so you’ll want to have solid functionalities for both. A solution that offers complete and seamless communication between your operations and back-end accounting does exist. However, in some cases, the accounting may be more robust than the operations or vice-versa. Ensure that the solutions you’re considering offer powerful functionality across the entire solution and not just in one area.

New accounting software should also offer the opportunity to improve processes within the different user departments. Situations where the warehouse staff picks from paper orders and manually updates inventory counts, can be modernized and resolved to a smooth, digital process. A good solution allows for fewer human errors and more time saved. Another example would be where client credit card details are still being kept on a spreadsheet or within your software client list and not safely stored in a vaulted and tokenized payment processing system tied into your receivables.

Modern functionalities are essential, and so is process improvement. Understanding your current solution’s limitations while closely examining your internal day-to-day workflow will help narrow down all the new software options out there.

2) Think Ahead

If you are considering a new accounting software, then the chances are that you may be experiencing the pain of outgrowing your current solution. Over time, your business will continue to grow, evolve and change. Even if you stay at a certain size, technology evolves, forcing businesses to consider new solutions. A scalable solution will grow with your company and keep up with technology.

Business growth can look different for different businesses. In a warehouse environment, we often see more inventory added or the need to move to a multi-warehouse model, which requires software with multi-location functionality. Or perhaps where entering one order at a time no longer works because your business has grown to such high volume transitions where entering batches makes more sense.

Features like cloud technology, user-defined fields, paperless options, automation, business intelligence make a big difference when shopping for new software. A scalable software will give you options like these to use today and adapt them for when you’re bigger tomorrow.

3) Calculate the ROI

When shopping for new software, you likely will be asking what is the ROI on this purchase. Several common factors come into play, but even at a high level, the intricacies of your business play a part. At a glance, you can tell whether you are gaining or losing on your investment. An investment in software is no different—you need to be able to measure whether you are getting everything you can out of the solution.

Consider understanding TCO (The Cost of Ownership) better to understand the ROI (Return on Investment).

TCO

What is the cost of ownership for your new solution? It would be the cost of the actual software, of course. It is also likely the cost of the services provided to get your new software up and running. Data conversion, implementation, customization, training, annual maintenance, and support are all part of your cost of ownership. The cost of ownership if you stay with the software you’ve outgrown won’t just be the cost of antiquated hardware and software, but also the potential loss of revenue from being stunted and bottlenecked – which will cost you more than your current software.

Once you have a realistic approach to the cost of ownership, you can now better evaluate the ROI.

ROI

There are a few ways to calculate an ROI out there, and Google can quickly help you with simple to complex formulas. However, what most business owners fail to include in their ROI calculation is the following:

• How much employee time is spent on repetitive and manual tasks? What does that translate to in salary or wages?
• What are the costs of potential penalties and fines, potential costs of data damage
• How does a decrease in cash flow affect the business– what are the potential costs we associate with that? Vendor remit payment time, how that can affect a business relationship.
• Credit card transaction fees when it’s taken 60+ days to collect on an invoice – the cost associated with managing that late payment VS payment automation where pre-authorized payments happen on time.
• Cost savings because they now know what their inventory counts are and no longer are ordering excess resulting in loss of product

Conclusion

The final value of the investment is where you have to be forward-thinking, and either do some math based on the numbers you know or do some estimating. Aside from the hard costs associated, what are some of the not-so-obvious costs that will decrease with a new solution? Essentially, we calculate the benefit of the investment vs. the cost of the investment, but that benefit becomes very specific based on your needs. Click here to download a free Accounting Software Evaluation Checklist to assist you in your search for a new solution.

Quality software will prove its worth in a short time. Along with a certified consultant who will guide you through the proper setup and training, you’ll be thankful that your growing business is in good hands.

Watch our demo and contact us today to learn more about how Spire can be the right software for your business.