If you’re starting a new business or recently launched, you’ll soon face an important decision: choosing the right accounting software?
What are the key factors to consider when deciding which accounting software is going to be perfect for your business? How can you find the right one?
Make no mistake: when you start using one of the many options, it’ll be quite challenging to switch to another solution in 6 months. It’s not impossible, but it’s painful enough that you want to get this right the first time. To find the perfect fit, you need to balance business functionality with user experience.
In my experience, two factors matter most when evaluating small business accounting tools:
- your specific business activity and workflows
- your accounting skills (and/or your accountant’s preference).
Let me walk you through both.
1) Your Business Activity and Needs
Your choice will ultimately come down to this very fundamental question: how do you operate your business? If you’re just about to start your business, your business plan is your starting point.
Be honest and take your time to consider all aspects of your business. Assess your needs and draft a list: what do you expect from your accounting software. Put all of them, even the tiniest one to paper. Don’t bother if it sounds dumb or trivial; on with it. At the end you will have a “must-have” list of features including:
- Invoicing
- Taking payments
- Expense tracking
- Payroll processing
- Inventory management
- Multi-currency support
- Automations
One size does not fit all. A business in the hospitality sector has different accounting needs than one in the construction industry. If you’re an online retailer selling products through Amazon or E-bay, your best-fit piece of software may differ from your coach friend’s solution.
A word of warning about fancy features: Don’t let one impressive function seduce you into choosing the wrong software. I learned this the hard way. I once fell for a cash flow forecasting app because it had this gorgeous automated reporting feature. I could picture myself generating beautiful reports with a single click. But when I actually started using it, I discovered I couldn’t adjust the assumptions the way I needed to. The output looked fancy but was worthless for my actual purposes.
My advice: List what’s essential for your business, then test your shortlisted options thoroughly. Yes, this takes time. But it’s absolutely worth it. Test, test and test. Most accounting software offers free trial periods, use them. Spend a few hours testing the functions that matter most to you. After hands-on testing, you’ll know which one feels right.
2) Your accounting skills or your accountant’s preference
Let’s be pragmatic: will you handle the bookkeeping yourself? If so, how comfortable are you with accounting principles?
Different platforms require different accounting skill levels. Some assume you understand debits and credits; others are designed to be user-friendly for complete beginners. Be honest with yourself about where you fall on that spectrum.
Already working with a bookkeeper or accountant? The smart move is usually to take their advice and use the software they recommend. They’ll be the ones supporting you, so choose a platform they know well. Or, if they’re pushing something that genuinely doesn’t suit your business, it might be time for a second opinion on your accountant, too! 🙂
What About Pricing and Extra Features?
You might be thinking: “Wait, what about pricing? Number of users? Reporting capabilities? Don’t those matter?”
They do … but they’re secondary.
Here’s why: if you’ve done your homework on analysing your business needs, you’ll have a detailed list of required functions. When you match that list against available software, you’ll probably end up with 2-3 viable options. And guess what? They’ll have similar prices and comparable features.
At that point, would you really choose software that feels clunky and frustrating just to save $10 a month? I wouldn’t. Having said this, you may end up making your final decision based on the pricing provided both options provide the same functionality and user experience to you.
Never skip the user test.
Never prioritize price over usability.
You need software that executes your crucial functions perfectly. If you’re already using an inventory management system, for example, and one of your shortlisted options doesn’t integrate smoothly with it, you have your answer. Choose the one that integrates well with your existing tools.
Key takeaways
Choosing accounting software isn’t a quick decision. It requires research and hands-on testing. But if you focus on thoroughly understanding your business needs and daily operations and then test how well each option meets those needs, you’ll find the right fit.
Your choice should tick two boxes: it handles your required functionality perfectly, and it feels logical and easy to use.
Get the foundation right now, and you’ll save yourself years of administrative frustration.
I believe in You: you’re a champion 🏆
PS: If you’d like to learn more about the basics of bookkeeping, please check out the free Bookkeeping 101 mini-course by 👉 CLICKING HERE
