Choosing the Best Accounting Software for your SME
If you are in the need of accounting software for your small to medium enterprise (SME) you have many choices. Long gone are the days when Quickbooks was your only option – today’s cloud based accounting programs are innovative, adaptive and designed to help you keep track of your books in ways that are well suited to your start up business.
The old giants of accounting software are being challenged and overthrown by a new wave of web based programs that will help you to keep track of your profits and losses, your VAT, your cash flow, invoices, employee wages and more.
If you are overwhelmed with all of the options on the market and wondering what you should consider when making your decision, read ahead.
Remember – large corporations often employ a ‘finance manager’ or lead accountant who is one of the most important people in the company. Your accounting software will play this role until the time when you too need a dedicated accountant – don’t treat this decision lightly. Take your time and do your research – What functions do you need your accounting software to be able to handle? What are the daily tasks that you need it to do? These are all things to consider.
What country was it designed for?
While Australian or American accounting software will certainly work for many aspects of your business needs, it will not be able to meet all of your specifically British needs. If you choose to go with a foreign product, ensure that it has a setting for UK businesses.
Does it include VAT options that will suit your business?
If you are already VAT registered or plan to become VAT registered in the future, you will need to assess some of the functions on any accounting software you are researching. Can it accommodate Flat-Rate VAT? Will it automatically produce a VAT return, and can this be submitted to HMRC from within the software program. If your business has any complicated VAT rules to follow, you may need software that implements Reverse Charge calculations automatically – be sure to check this.
Does it offer multiple currencies?
Many software programs offer multiple currencies, but some do not. If you regularly do business in Euros, dollars or other currencies, this could be an important consideration when you make your decision.
Will it automatically link to your personal annual tax return?
Some software options will take all of the input information about your salary, profits and dividend payments and will link this directly to your personal tax return. Programs, such as FreeAgent, even have the capacity to submit your annual return directly through the software, saving you heaps of time and energy.
Can it link to your bank accounts?
Can this software easily link its information to your bank account? While certain programs need you to physically upload your bank statements, others can set up an automatic feed that communicates to your bank account and credit cards. The automatic option is preferable to many small business owners, as this means that they are always up-to-date.
Do you like the interface?
Before you sign on for a contract with any accounting software, you should ask for a free trial (if it is not automatically offered). This is important when assessing if the interface will work for you, and if you find it easy to use. If you find the system intuitive to browse, you will have a better time finding features that you use on a daily basis.
What kind of Reports does it offer?
This is a key measure of usability when it comes to selecting the right software for your business. First, you must determine what it is that you require – do you need comprehensive reports on a daily or monthly basis? Some other common reports to consider include (but are not limited to):
- A monthly balance sheet that includes details about all of your company’s assets, liabilities and your capital balance over the past year
- Your monthly Profit & Loss reports
- Debtors and creditors over 30, 60 and 90 day periods
- Information about your open ledgers
- A forecast of your upcoming year
Does it include payroll capabilities?
The ability to keep your payroll information neat and tidy within your accounting software will be a real time saver, and could prevent costly mistakes. Some programs include this option as a default, and others offer it as an add on.
Do you like the invoices it generates?
When trialling out your new accounting software, it is a good idea to generate a test invoice, so that you can see the layout, design, features and the overall ease of creation. This is a document you will be sending to your valued clients, so it is imperative that you like the way it looks.
Do they offer high quality customer service?
In the event that you do need help with your accounting software package, it is important that they offer reliable and affective customer service. If you are often working late at night or on weekends, it pays to check their hours and find out if help will be on hand on holidays.
Choosing from options on the market
Now that you have thought about what features are important to you and your business, here are some well rated accounting software programs for SMEs that you should have a look at as you begin your search.
- Xero – Xero is the UK’s leading cloud based accounting software, and boasts fantastic reviews from its users.
- Wave – Touting itself as a free alternative to QuickBooks, Wave is a simple accounting product that will be attractive to many SMEs based on its no cost model.
- FreeAgent – Specifically for small start ups and freelancers, FreeAgent has a UK focus and a host of features that self employed individuals will find valuable.
- Kashflow – Easy to use and ultra simplified, Kashflow is a good option for you if this is your first attempt at doing your own books.
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