Pick Accounting Software that Addresses Your Individual Business Needs
Take stock of what kind of information you really what to see in the reports generated by computer accounting software.
Businesses have different needs for in-house financial reporting. But before you choose a software package to help you streamline your record-keeping processes, it’s important to know exactly what kinds of reports you actually need.
Strike a balance between the time and effort necessary to input data and the ultimate value of the reports. There are many variables, depending on your firm’s operations and goals, and there are a wealth of software options, ranging from free bookkeeping tools to expensive programs to support a full accounting department.
Identify Your Needs
Sometimes, too much information can be less than helpful, especially for start-up operations. Knowing how to read and interpret financial information is a learned skill, however. Master simple accounting, and gain a basic understanding before choosing your software package. You’ll then be able to tailor your reports to your specific needs.
Also, understand that any software requires some oversight by a knowledgeable staff member. There is truth in the phrase “Garbage in, garbage out.” Whether you need to track hours, inventory, deliveries, job progress or only dollars and cents, determine in advance how to record the basic information so that daily, weekly and monthly reports reflect the company’s true position.
Ease and Automation
Basic bookkeeping principles are consistent across all types of industries, but there are varied ways to compile data that have meaning for different departments and varied types of business. An annual statement of condition and yearly tax reports might be sufficient for a solo service provider, while a retail operation typically requires more detailed weekly or monthly reports of sales and inventory, orders and stock.
Annual reports provide an overall view of company financial health, but a monthly P&L adds the kind of depth and detail necessary to forecast needs, highlight concerns and plan for growth.
Security and Storage
As with any digital data that contains sensitive information or critical records, security is a factor. Have plans in place for secure data backup. Redundant procedures are vital, so that pertinent records are never compromised or lost.
When considering a new software program, take stock of your firm’s specific requirements in the present time. But also chart your projected growth into the future for a few years. Ideally, your company won’t outgrow its software capabilities anytime soon, but your analysis should include alternate projections and multiple contingency plans. Don’t let your company’s accounting procedures be derailed by unexpected expansion or an economic surprise.
Reap the Benefits
There are a few aspects of a business that can be considered more vital than adequate financial reporting. Basic accounting for an entrepreneurial startup business can be simple, sometimes met by a pencil and paper ledger system. But there is no substitute for the ongoing, consistent and professional reports that are generated by digital accounting software.
Carefully consider your options, based on your budget, your needs and your experience, and opt for bookkeeping software that does exactly what you want it to do.