by Danella Yaptinchay |
Choosing the right accounting system is essential for any business, whether it’s a start-up company or a big corporation. An accounting system directly impacts a business’ profitability as it monitors the financial health of the company. And for it to represent the correct financial situation of a corporation, the system should be foolproof and a perfect fit for the business’s needs.
How does one choose the right accounting system for one’s business? We’ve round up some tips on how to determine what’s right for your business, regardless if it would form an in-house department or would be outsourced to one of the many accounting services in the Philippines.
1. Know what your business needs
Before you look at software systems or accounting services, you should first analyze your company’s needs. If you’re a small company, consider the scalability of the system you would need with regards to business growth.
There are a lot of pre-packaged accounting systems that are offered out there, but consider what else your company needs outside those packaged systems.
Here are some questions that will help you identify what your business needs:
- What kind of products or services do you provide?
This will be the basis of your accounting needs. Basic accounting tasks like bookkeeping, transactions, and bills and vendor payments depend on the diversity and type of services/products you offer.
- Do you have a large workforce and operate internationally?
The bigger your workforce and the scope of your business service delivery are, the more detailed, scalable, and flexible your accounting system should be. International operations would require you to have different sets of currencies to track, and payroll operations get complicated when there are many employees to consider based on type, level, applicable benefits, working hours, etc.
- Does your business have different divisions or departments?
Divisions or departments will have (and need) separate financial records for accountability purposes. But, you’ll also need a centralized accounting department and system for auditing everything together.
- Do you need more than just a software system?
Perhaps this is the best thing to consider. Once you choose a software system for your business, find the support they can give after sales, such as will they be able to provide technical support and training?
2. Consider options
Now that you have identified your needs, you already have a shortlist of options based on your company’s requirements. From this list, consider these criteria when choosing a vendor:
A secret that most accounting software companies won’t tell you is that most programs perform basically the same functions. They just differ on how they do tasks and the delivery of information.
- Evaluate the company’s performance and track record.
- Scalability as a product. Can your system expand as your business grows?
- Speed of Installation. Know how quickly and efficiently the new software can be installed.
- Is it user-friendly? You would want an accounting system that’s simple, logical, and easy to use for your employees.
- Capacity and reporting capabilities. What types of information can be created into reports?
- Error handling. How will the program handle unbalanced transactions and user errors (accidental deletion or manipulation of data are examples)? Do they have detailed audit trails?
- Security. How will they secure the system? Do they provide tiered levels of access?
3. Think long-term.
It takes a lot of time and money to buy and install a new accounting software system—from choosing the right product to training your employees on how to operate it.
Factor in the future growth of your business and how reliable and long-term your provider is as well. Study how often the software is upgraded and find out how it is rolled out. Ask if long-term support is available as well.
The Right System Involves the Right Process, People, and Tools
More than just choosing a software system, your accounting system is made up of your established business financial processes and the people you employ to handle them.
Each factor—process, person, and tool should be chosen with great consideration. Do your research well.
Author’s bio: Danella Yaptinchay is the managing director of Full Suite, a service company providing back end support to small businesses. She is a cofounder of Co.lab, a coworking space, and of the media company Homegrown. In constant pursuit of balance and self-development, she tries to apply the practices of yoga to her daily life.