How to choose the right bookkeeping software
You might think that choosing bookkeeping software is a no brainer, but that’s not always the case. No single product will fit every business’ requirements, so how do you choose the right one? The truth is, it’s not a one size fits all solution and it doesn’t have to be based on which package is the cheapest—but rather which one will suit your business’s specific needs.
Bookkeeping software is used to record transactions within the business. The software system is usually integrated with the rest of the accounting and other financial processes to help create a complete set of financial data for your business to check against and to provide an audit trail.
It’s important to have a good bookkeeping system in place to ensure that your business is operating effectively and efficiently.
To choose the right bookkeeping software, one must first know what they need to track. A good place to start is by determining if you are in a service or manufacturing based business. The difference between these two is that service businesses charge for time spent on projects and manufacturing businesses charge for units produced. To track income and expenses, it is best to get bookkeeping software that integrates seamlessly with your other systems so you can see everything in one place.
What’s the Difference Between a Bookkeeper and Bookkeeping Software?
Bookkeeping software is a database designed to keep track of your business finances, by inputting data the system captures transactions in categories that then allows you to export reports (such as profit and loss and balance sheet) to analyze how the business performs.
A Bookkeeper is a skilled resource a business utilizes to support the inputting and reconciling of that data, to ensure the accounts are accurate. These days, software often seems quite simplistic, but the reality is, even if it seems easy to push the banking data, are you confident you allocate costs and income correctly to assess your business performance accurately?
For example, do you allocate directors pay correctly between dividends and salaries, do you think about how to allocate your sales so you can see how much income you make per route to market (or is it just processed to one code)
If you want to analyze your business, then accurate data input is crucial to ensure your reports provide the right information!
DO I ONLY NEED A BOOKEEPING SYSTEM?
Bookkeeping systems can come in all shapes and sizes, some more advanced systems are known as an ‘ERP’ which means you have the ability to manage different operations within one system, for example, stock and order management, project tracking etc, alongside your bookkeeping and financials. As a business grows to expand the ability to report will help ensure you streamline operations and continuously improve your processes and controls.
It is quite easy for a business to rush in and purchase new systems, hoping it will solve internal issues, but the important thing to remember is that systems are only as good as the processes that go into them, therefore it is useful to analyze your overall business model before you decide to implement new systems.
Factors To Consider When Choosing A Bookkeeping Software
While bookkeeping software is an essential element of keeping your business running smoothly, it can be quite confusing to explore all the options available for purchase. With so many different options on the market, it can be difficult to decide on the right fit for your business and your needs.
Here are some important factors to consider when choosing bookkeeping software:
In conclusion, there are several types of bookkeeping software solutions available today. It is very important to understand how each type works and what benefits each has over others. This way, you’ll be able to find the perfect solution for your unique situation.
Wilkinson Accounting specializes in providing advanced bookkeeping and consultancy services to help business owners review their requirements and implement systems that are effective for their business model.