How to Choose the Right Accounting Software for Your Business - dummies

How to Choose the Right Accounting Software for Your Business

Accounting software packages are available for businesses of every size, from small home-based businesses to multinational corporations. Accounting software is a booming business, which means you have a lot of choices. Except for larger entities that employ their own proprietary accounting software and information technology experts, most businesses need the advice and help of outside consultants to choose, implement, upgrade, and perhaps replace accounting software.

Here are some words of wisdom about accounting software:

  • Choose your accounting software very carefully. It’s very hard to pull up stakes and switch to another software package. Changing just one module in your accounting software can be difficult.

  • When evaluating accounting software, consider three main factors:

    • Ease of use

    • Whether it has the particular features and functionality you need

    • The likelihood that the vendor will continue to be around to update and improve the software.

  • Security! You need very tight control over all aspects of using the accounting software and who’s authorized to make changes in any of the modules of the accounting software.

    Online accounting systems that permit remote input and access over the Internet or a local area network with multiple users present special security problems. Think twice before putting your accounting system online.

  • Know how to mine your data. Although accounting software offers the opportunity to exploit your accounting information (mine the data), you have to ask for the exact type of information you want and insist that it be pulled out of the accounting data.

  • Give your software your business’s personal touch. You need to design your business’s specialized reports and make sure that these reports are generated correctly from the accounting database.

  • Set up internal controls to limit input errors. Data entry errors can be a serious problem in computer-based accounting systems. You can minimize these input errors, but it’s next to impossible to eliminate them altogether. Strong internal controls for the verification of data entry are extremely important.

  • Make sure your accounting software leaves very good audit trails. The lack of good audit trails looks very suspicious to the IRS.